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STOCK-BASED COMPENSATION | 9 Months Ended
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Sep. 30, 2012
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 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 nine months of 2012 and 2011, the Company recognized stock option compensation costs of $0.5 million and $0.7 million, respectively. In the third quarters of 2012 and 2011, the Company recognized stock option compensation costs of $0.1 million and $0.2 million, respectively. The remaining unrecognized compensation cost related to unvested awards at September 30, 2012, approximated $0.1 million, and the weighted average period of time over which this cost will be recognized is approximately one year. The following table summarizes stock options outstanding as of September 30, 2012, as well as activity during the nine months then ended:
|  | Shares |  |  | Weighted Average Exercise Price |
Outstanding at January 1, 2012 |  |  | 592,500 |  |  | $ | 9.12 |
Granted |  |  | 0 |  |  |  | 0 |
Exercised |  |  | 45,000 |  |  |  | 6.52 |
Forfeited or canceled |  |  | 34,000 |  |  |  | 15.79 |
Outstanding at September 30, 2012 |  |  | 513,500 |  |  | $ | 8.94 |
Exercisable at September 30, 2012 |  |  | 498,500 |  |  | $ | 8.75 |
At September 30, 2012, the aggregate intrinsic value of in-the-money options outstanding and options exercisable was $2.3 million and $2.3 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 nine months of fiscal years 2012 and 2011 are provided in the table below. The Company did not recognize any significant tax benefit with regard to stock options in either period presented.
|  | Nine Months Ended |
|  | Sept. 30, 2012 |  |  | Oct. 2, 2011 |
|  | (In millions) |
Proceeds from stock options exercised |  | $ | 0.3 |  |  | $ | 2.6 |
Intrinsic value of stock options exercised |  |  | 0.3 |  |  |  | 5.9 |
Restricted Stock Awards During the nine months ended September 30, 2012, and October 2, 2011, the Company granted restricted stock awards for 573,500 and 668,000 shares, respectively, of common stock. These awards (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 $3.2 million and $8.6 million for the nine months ended September 30, 2012, and October 2, 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 September 30, 2012, and during the nine months then ended:
|  | Shares |  |  | Weighted Average Grant Date Fair Value |
Outstanding at January 1, 2012 |  |  | 1,749,000 |  |  | $ | 15.08 |
Granted |  |  | 573,000 |  |  |  | 13.25 |
Vested |  |  | 264,000 |  |  |  | 13.37 |
Forfeited or canceled |  |  | 84,500 |  |  |  | 14.87 |
Outstanding at September 30, 2012 |  |  | 1,973,500 |  |  | $ | 14.79 |
As of September 30, 2012, the unrecognized total compensation cost related to unvested restricted stock was approximately $11.8 million. That cost is expected to be recognized by the end of 2015. For the nine months ended September 30, 2012, and October 2, 2011, the Company recognized tax benefits with regard to restricted stock of $0.5 million and $2.4 million, respectively.

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher AICPA -Name Statement of Position (SOP) -Number 93-6 -Paragraph 53 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 123R -Paragraph 64, 65, A240 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 + Details
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