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Note 5 - Stock-Based Compensation
 9 Months Ended
Sep. 28, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

NOTE 5 – 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 2013, the Company recognized stock option compensation expenses of $0.1 million. All outstanding stock options vested prior to 2014, and therefore there have been no stock option compensation expenses during 2014.


The following table summarizes stock options outstanding as of September 28, 2014, as well as activity during the nine months then ended:


   

Shares

   

Weighted Average

Exercise Price

 

Outstanding at December 29, 2013

    184,000     $ 8.18  

Granted

    0       0  

Exercised

    20,500       4.31  

Forfeited or canceled

    2,500       1.49  

Outstanding at September 28, 2014

    161,000     $ 8.99  
                 

Exercisable at September 28, 2014

    161,000     $ 8.99  

At September 28, 2014, the aggregate intrinsic value of both in-the-money options outstanding and options exercisable was $1.2 million (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 2014 and 2013 are provided in the table below.


   

Nine Months Ended

 
   

Sept. 28, 2014

   

Sept. 29, 2013

 
   

(In millions)

 

Proceeds from stock options exercised

  $ 0.2     $ 1.2  

Intrinsic value of stock options exercised

    0.3       1.2  

Restricted Stock Awards


During the nine months ended September 28, 2014, and September 29, 2013, the Company granted restricted stock awards for 490,000 and 670,000 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 awards was $3.0 million and $5.0 million for the nine months ended September 28, 2014, and September 29, 2013, 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 awards outstanding as of September 28, 2014, and activity during the nine months then ended:


   

Shares

   

Weighted Average

Grant Date Fair Value

 

Outstanding at December 29, 2013

    1,707,500     $ 15.62  

Granted

    490,000       21.28  

Vested

    546,500       16.22  

Forfeited or canceled

    231,000       17.14  

Outstanding at September 28, 2014

    1,420,000     $ 17.10  

As of September 28, 2014, the unrecognized total compensation cost related to unvested restricted stock was approximately $11.5 million. That cost is expected to be recognized by the end of 2017.


For the nine months ended September 28, 2014, and September 29, 2013, the Company recognized tax benefits with regard to restricted stock of $0.6 million and $2.0 million, respectively.