Note 5 - Stock-based Compensation
|
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jan. 01, 2012
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Note 5 - Stock-based Compensation Disclosure | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Note 5 - Stock-based Compensation |
Note
5 Stock-based Compensation
The
Company has two incentive stock plans, the 1995 Stock Option Plan
(1995 Plan) and the 2006 Omnibus Incentive Plan
(2006 Plan). The Company granted
non-qualified stock options to employees and non-employee
directors from the 1995 Plan through the fiscal year ended April
2, 2006. In conjunction with the approval of the 2006
Plan by the Companys stockholders at its Annual Meeting in
August 2006, options may no longer be issued from the 1995
Plan.
The
2006 Plan is intended to attract and retain directors, officers
and employees of the Company and to motivate these persons to
achieve performance objectives related to the Companys
overall goal of increasing stockholder value. The
principal reason for adopting the 2006 Plan was to ensure that
the Company has a mechanism for long-term, equity-based incentive
compensation to directors, officers and
employees. Awards granted under the 2006 Plan may be
in the form of qualified or non-qualified stock options,
restricted stock, stock appreciation rights, long-term incentive
compensation units consisting of a combination of cash and shares
of the Companys common stock, or any combination thereof
within the limitations set forth in the 2006 Plan. The
2006 Plan is administered by the compensation committee of the
Companys Board of Directors (the Board), which
selects eligible employees and non-employee directors to
participate in the 2006 Plan and determines the type, amount,
duration and other terms of individual awards. At
January 1, 2012, 209,500 shares of the Companys common
stock were available for future issuance under the 2006
Plan.
Stock-based
compensation is calculated according to FASB ASC Topic 718,
Compensation
Stock Compensation, which requires stock-based
compensation to be accounted for using a fair-value-based
measurement. The Company recorded $128,000 and
$415,000 of stock-based compensation expense during the three and
nine-month periods ended January 1, 2012, respectively, and
recorded $121,000 and $605,000 of stock-based compensation
expense during the three and nine-month periods ended December
26, 2010, respectively. The Company records the
compensation expense related to stock-based awards granted to
individuals in the same expense classifications as the cash
compensation paid to those same individuals. No
stock-based compensation costs have been capitalized as part of
the cost of an asset as of January 1, 2012.
Stock
Options: The following table represents stock option
activity for
the
nine-month periods ended January 1, 2012 and December 26,
2010:
The
total intrinsic value of the stock options exercised was $8,000
and $340,000 during the three and nine-month periods ended
January 1, 2012, respectively, and was $104,000 and $408,000
during the three and nine-month periods ended December 26, 2010,
respectively. As of January 1, 2012, the intrinsic
value of both the outstanding and exercisable stock options was
$160,000.
To
determine the estimated fair value of stock options granted, the
Company uses the Black-Scholes-Merton valuation formula, which is
a closed-form model that uses an equation to estimate fair
value. The following table sets forth the assumptions
used to determine the fair value, and the resulting grant-date
fair value per option, of the non-qualified stock options which
were awarded to certain employees during the nine months ended
January 1, 2012 and December 26, 2010, which options vest over a
two-year period, assuming continued service.
Because
the Companys historical stock option exercise experience
did not provide a reasonable basis upon which to estimate the
expected life of the stock options granted during each of the
nine-month periods ended January 1, 2012 and December 26, 2010,
the Company has elected to use the simplified method to estimate
the expected life of the stock options granted, as allowed by SEC
Staff Accounting Bulletin No. 107 and the continued acceptance of
the simplified method indicated in SEC Staff Accounting Bulletin
No. 110.
For
the three and nine-month periods ended January 1, 2012, the
Company recognized compensation expense associated with stock
options as follows (in thousands):
For
the three and nine-month periods ended December 26, 2010, the
Company recognized compensation expense associated with stock
options as follows (in thousands):
As
of January 1, 2012, total unrecognized stock option compensation
expense amounted to $209,000, which will be recognized as the
underlying stock options vest over a period of up to two
years. The amount of future stock option compensation
expense could be affected by any future stock option grants and
by the separation from the Company of any individual who has
received stock options that are unvested as of such
individuals separation date.
Non-vested
Stock: The fair value of non-vested stock granted is
determined based on the number of shares granted multiplied by
the closing price of the Companys common stock on the date
of the grant.
The
Board granted 30,000 shares of non-vested stock to its
non-employee directors during each of the quarters ended October
2, 2011, September 26, 2010, September 27, 2009 and September 28,
2008 with a weighted-average fair value of $4.44, $4.36, $3.02
and $3.87, respectively, as of the date of each of the
grants. These shares vest over a two-year period,
assuming continued service.
The
Board awarded 345,000 shares of non-vested stock to certain
employees as of June 23, 2010 (the Grant Date) in a
series of grants which will vest only if the closing price of the
Companys common stock is at or above certain target levels
for any ten trading days out of any period of 30 consecutive
trading days (the Market Condition), assuming
continued service through the date the Market Condition is
achieved.
As
of July 29, 2010 (the Modification Date), the Company
amended these non-vested stock grants to require as a condition
to vesting a five-year period of continuous service after the
Modification Date in addition to the achievement of the Market
Condition. The amendment of these non-vested stock
grants will be accounted for as a modification. As
such, the initial aggregate Grant Date fair value and the
incremental cost resulting from the modification, if any, will be
recognized as compensation expense over the vesting term of the
modified awards. The Company, with the assistance of
an independent third party, has determined that the aggregate
Grant Date fair value of the original awards amounted to $1.2
million, and has further determined that there is no incremental
cost resulting from the modification. Therefore, the
aggregate Grant Date fair value will be recognized as
compensation expense over a period beginning on the Grant Date
and ending on the fifth anniversary of the Modification
Date.
For
the three and nine-month periods ended January 1, 2012, the
Company recognized compensation expense associated with
non-vested stock grants, which is included in marketing and
administrative expenses in the accompanying consolidated
statements of income, as follows (in thousands):
For
the three and nine-month periods ended December 26, 2010, the
Company recognized compensation expense associated with
non-vested stock grants, which is included in marketing and
administrative expenses in the accompanying consolidated
statements of income, as follows (in thousands):
As
of January 1, 2012, total unrecognized compensation expense
related to the Companys non-vested stock grants amounted to
$884,000, which will be recognized over the respective vesting
terms associated with each block of grants as indicated
above. The amount of future compensation expense
related to the Companys non-vested stock grants could be
affected by any future non-vested stock grants and by the
separation from the Company of any individual who has received
non-vested stock grants that remain non-vested as of such
individuals separation date.
|