XML 89 R19.htm IDEA: XBRL DOCUMENT v2.4.0.6
Stock-Based Compensation Plans
 12 Months Ended
Jun. 28, 2012
Stock-Based Compensation Plans [Abstract]  
STOCK-BASED COMPENSATION PLANS

NOTE 10 — STOCK-BASED COMPENSATION PLANS

At our annual meeting of stockholders on October 30, 2008, our stockholders approved a new equity incentive plan (the “2008 Equity Incentive Plan”) pursuant to which awards of options and stock-based awards may be made to members of the Board of Directors, employees and other individuals providing services to the Company. A total of 1,000,000 shares of Common Stock are authorized for grants of awards, which may be in the form of options, restricted stock, restricted stock units, stock appreciation rights (“SARs”), Common Stock or dividends and dividend equivalents. As of June 28, 2012, there were 724,834 shares of Common Stock that remained authorized for future grants of awards, subject to the limitations set below. A maximum of 500,000 of the 1,000,000 shares of Common Stock may be used for grants of Common Stock, restricted stock and restricted stock units. Additionally, awards of options or SARs are limited to 100,000 shares annually to any single individual, and awards of Common Stock, restricted stock or restricted stock units are limited to 50,000 shares annually to any single individual. All restricted stock units granted under the 2008 Equity Incentive Plan have vesting periods of three years for awards to employees and one year for awards to non-employee members of the Board of Directors. The exercise price of stock options was determined as set forth in the 2008 Equity Incentive Plan by the Compensation Committee of our Board of Directors, and must be at least the fair market value of the Common Stock on the date of grant. Except as set forth in the 2008 Equity Incentive Plan, options expire upon termination of employment or directorship, as applicable. The options granted under the 2008 Equity Incentive Plan are exercisable 25% annually commencing on the first anniversary date of grant and become fully exercisable on the fourth anniversary date of grant. Options generally will expire no later than ten years after the date on which they are granted. We issue new shares of Common Stock upon exercise of stock options.

The 2008 Equity Incentive Plan replaced a stock option plan approved at our annual meeting of stockholders on October 28, 1998 (the “1998 Equity Incentive Plan”) pursuant to which awards of options and stock-based awards could be made. There were 700,000 shares of Common Stock authorized for issuance to certain key employees and “outside directors” (i.e., directors who are not employees of the Company). The exercise price of the options was determined as set forth in the 1998 Equity Incentive Plan by the Board of Directors and was at least the fair market value of the Common Stock on the date of grant. Except as set forth in the 1998 Equity Incentive Plan, options expire upon termination of employment or directorship, as applicable. The options granted under the 1998 Equity Incentive Plan are exercisable 25% annually commencing on the first anniversary date of grant and become fully exercisable on the fourth anniversary date of grant. Options generally will expire no later than ten years after the date on which they are granted. We issue new shares of Common Stock upon exercise of stock options issued pursuant to the 1998 Equity Incentive Plan. Through fiscal 2007, all of the options granted, except those granted to outside directors, were intended to qualify as incentive stock options within the meaning of Section 422 of the Internal Revenue Code. Effective fiscal 2008, all option grants are non-qualified awards. The 1998 Equity Incentive Plan terminated on September 1, 2008. However, all outstanding options issued pursuant to the 1998 Equity Incentive Plan will continue to be governed by the terms of the 1998 Equity Incentive Plan.

We determine fair value of stock option awards using the Black-Scholes option-pricing model. The following weighted-average assumptions were used to determine the fair value of options granted for the last three fiscal years:

 

                         
    June 28, 2012     June 30, 2011     June 24, 2010  

Risk-free interest rate

     1.1 %      2.2 %      3.0 % 

Expected dividend yield

     0.0 %      0.0 %      0.0 % 

Expected volatility

     38.1 %      43.6 %      50.4 % 

Expected life (years)

     6.3       6.3       6.3  

The expected term of the awards was determined using the “simplified method” as stated in SEC Staff Accounting Bulletin No. 107 that utilizes the following formula: ((vesting term + original contract term)/2). Expected stock volatility was determined based on historical volatility for the 6.25 year-period preceding the measurement date. The risk-free rate was based on the yield curve in effect at the time the options were granted, using U.S. treasury constant maturities over the expected life of the option. Expected forfeitures were determined based upon our expectations and past experiences. Expected dividend yield was based on our dividend policy at the time the options were granted.

The following is a summary of stock option activity for the year ended June 28, 2012:

 

                                 
                Weighted-        
          Weighted-     Average        
          Average     Remaining     Aggregate  
    Shares     Exercise
Price		     Contractual
Term		     Intrinsic
Value		  

Outstanding at June 30, 2011

     287,875     $ 11.99                  

Granted

     500       8.71                  

Exercised

     (62,125 )      7.27                  

Forfeited

     (20,750 )      12.57                  
   

 

 

                    

Outstanding at June 28, 2012

     205,500     $ 13.38       3.5     $ 826  
   

 

 

                    

 

 

  

Exercisable at June 28, 2012

     203,625     $ 13.40       3.5     $ 816  
   

 

 

                    

 

 

  

The number of stock options vested, and expected to vest in the future, as of June 28, 2012, is not significantly different from the number of stock options outstanding at June 28, 2012, as stated above. All options granted during fiscal 2012, fiscal 2011, and fiscal 2010 were at exercise prices equal to the market price of Common Stock at the grant date.

 

The following table summarizes the weighted-average grant-date fair value of option awards granted, the total intrinsic value of all options exercised and the total cash received from the exercise of options for the last three fiscal years:

 

                         
    Year ended
June 28, 2012		     Year ended
June 30, 2011		     Year ended
June 24, 2010		  

Weighted-average grant date fair value of options granted

   $ 3.39     $ 6.71     $ 7.90  

Total intrinsic value of options exercised

   $ 394     $ 77     $ 100  

Total cash received from exercise of options

   $ 452     $ 84     $ 157  

The following is a summary of non-vested stock options for the year ended June 28, 2012:

 

                 

Options

   Shares     Weighted-
Average
Grant-Date
Fair Value		  

Non-vested at June 30, 2011

     21,875     $ 4.81  

Granted

     500       3.39  

Vested

     (19,125 )      4.51  

Forfeited

     (1,375 )      7.61  
   

 

 

    

 

 

  

Non-vested at June 28, 2012

     1,875     $ 5.27  
   

 

 

    

 

 

  

Exercise prices for options outstanding as of June 28, 2012 ranged from $5.88 to $32.30. The options outstanding as of June 28, 2012 may be segregated into two ranges, as shown below:

 

                 
    Option Price Per Share Range  
    $5.88 - $11.30     $14.73 - $32.30  

Number of options

     98,375       107,125  

Weighted-average exercise price

   $ 8.75     $ 17.63  

Weighted-average remaining life (years)

     4.9       2.2  

Number of options exercisable

     97,500       106,125  

Weighted-average exercise price for exercisable options

   $ 8.77     $ 17.66  

Restricted stock units granted to employees and outside directors vest over a three year and one year period, respectively. The fair value of restricted stock awards is determined based on the market price of our Common Stock on the date of grant.

The following is a summary of restricted stock unit activity for the year ended June 28, 2012:

 

                 

Restricted Stock Units

   Shares     Weighted-
Average
Grant-
Date Fair
Value		  

Outstanding at June 30, 2011

     187,500     $ 11.34  

Granted

     77,500       7.92  

Exercised

     (38,000 )      7.77  

Forfeited

     (6,500 )      12.94  
   

 

 

    

 

 

  

Outstanding at June 28, 2012

     220,500     $ 10.71  
   

 

 

    

 

 

  

At June 28, 2012 there are 34,000 restricted stock units outstanding that are vested and the non-vested restricted stock units will vest over a weighted-average period of 1.36 years.

 

In the first quarter of fiscal 2011 we granted 10,000 SARs to a marketing consultant which vest over a three year period and have a ten year term. These SARs are being accounted for as a liability award whereby the fair value is measured at the end of each reporting period. We are using the Black-Scholes option-pricing model to determine the fair value of the SARs. The fair value of the SARs was determined using the following assumptions:

 

                 
    June 28, 2012     June 30, 2011  

Expected volatility

     46.0 %      49.3 % 

Average risk-free rate

     1.6 %      2.8 % 

Expected dividend yield

     0.0 %      0.0 % 

Forfeiture percentage

     0.0 %      0.0 % 

Expected life (years)

     8.0       9.0  

Under the fair value recognition provisions of ASC Topic 718, stock-based compensation is measured at the grant-date based on the fair value of the award and is recognized on a straight-line basis over the vesting period. The following table summarizes compensation cost charged to earnings for all equity compensation plans and the total income tax benefit recognized for non-qualified stock options in the consolidated statement of comprehensive income for the last three fiscal years:

 

                         
    Year ended
June 28, 2012		     Year ended
June 30, 2011		     Year ended
June 24, 2010		  

Compensation cost charged to earnings

   $ 820     $ 730     $ 491  

Income tax benefit recognized for non-qualified stock options

     48       7       21  

As of June 28, 2012, there was $887 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under our stock-based compensation plans. We expect to recognize that cost over a weighted-average period of 1.39 years.