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Stock-Based Compensation
 3 Months Ended
Apr. 01, 2012
Stock-Based Compensation [Abstract]  
STOCK-BASED COMPENSATION

NOTE 6 – STOCK-BASED COMPENSATION

Stock Option Awards

In accordance with accounting standards, the Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of the award. That cost will be recognized over the period in which the employee is required to provide the services – the requisite service period (usually the vesting period) – in exchange for the award. The grant date fair value for options and similar instruments will be estimated using option pricing models. Under accounting standards, the Company is required to select a valuation technique or option pricing model that meets the criteria as stated in the standard. The Company uses the Black-Scholes model. Accounting standards require that the Company estimate forfeitures for stock options and reduce compensation expense accordingly. The Company has reduced its stock compensation expense by the assumed forfeiture rate and will evaluate experience against this forfeiture rate going forward.

During the first three months of 2012 and 2011, the Company recognized stock option compensation costs of $0.2 million and $0.3 million, respectively. The remaining unrecognized compensation cost related to unvested awards at April 1, 2012, approximated $0.4 million, and the weighted average period of time over which this cost will be recognized is approximately one and one-half years.

 

There were no stock options granted during the first three months of fiscal 2012 or 2011. The following table summarizes stock options outstanding as of April 1, 2012, as well as activity during the three months then ended:

 

                 
    Shares     Weighted Average
Exercise Price		  

Outstanding at January 1, 2012

     592,500     $ 9.12  

Granted

     —         —    

Exercised

     23,500       5.59  

Forfeited or canceled

     34,000       11.72  
   

 

 

    

 

 

  

Outstanding at April 1, 2012

     535,000     $ 8.85  
   

 

 

    

 

 

  

Exercisable at April 1, 2012

     419,200     $ 7.80  
   

 

 

    

 

 

  

At April 1, 2012, the aggregate intrinsic value of in-the-money options outstanding and options exercisable was $2.7 million and $2.6 million, respectively (the intrinsic value of a stock option is the amount by which the market value of the underlying stock exceeds the exercise price of the option).

Cash proceeds and intrinsic value related to total stock options exercised during the first three months of 2012 and 2011 are provided in the following table:

 

                 
    Three Months Ended  
    April 1, 2012     April 3, 2011  
    (In thousands)  

Proceeds from stock options exercised

   $ 131     $ 1,468  

Intrinsic value of stock options exercised

   $ 179     $ 2,744  

The Company did not recognize any significant tax benefit with regard to stock options in either period presented.

Restricted Stock Awards

During the three months ended April 1, 2012 and April 3, 2011, the Company granted restricted stock awards for 557,500 and 468,000 shares of common stock. Awards of restricted stock (or a portion thereof) vest with respect to each recipient over a two to five-year period from the date of grant, provided the individual remains in the employment or service of the Company as of the vesting date. Additionally, awards (or a portion thereof) could vest earlier upon the attainment of certain performance criteria, in the event of a change in control of the Company, or upon involuntary termination without cause.

Compensation expense related to restricted stock grants was $1.3 million and $7.3 million for the three months ended April 1, 2012, and April 3, 2011, respectively. Accounting standards require that the Company estimate forfeitures for restricted stock and reduce compensation expense accordingly. The Company has reduced its expense by the assumed forfeiture rate and will evaluate experience against this forfeiture rate going forward.

The following table summarizes restricted stock activity as of April 1, 2012, and during the three months then ended:

 

                 
    Shares     Weighted Average
Grant Date
Fair Value		  

Outstanding at January 1, 2012

     1,749,000     $ 15.08  

Granted

     557,500       13.25  

Vested

     241,500       13.20  

Forfeited or canceled

     56,000       15.11  
   

 

 

    

 

 

  

Outstanding at April 1, 2012

     2,009,000     $ 14.80  
   

 

 

    

 

 

  

As of April 1, 2012, the unrecognized total compensation cost related to unvested restricted stock was $15.7 million. That cost is expected to be recognized by the end of 2015.

During the quarters ended April 1, 2012 and April 3, 2011, the Company recognized tax benefits of $0.2 million and $1.8 million, respectively, with regard to restricted stock.