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Stock-Based Compensation
12 Months Ended
Oct. 01, 2011
Stock-Based Compensation [Abstract] 
Stock-Based Compensation

(8) Stock-Based Compensation

Under the Company’s equity incentive plans, employees and directors may be granted stock options, restricted stock, restricted stock units and performance awards. As of October 1, 2011 there were 142,000 shares available for future grants under the plans.

Stock option awards. Under the Company’s equity incentive plans, employees and directors may be granted options to purchase shares of common stock at the fair market value on the date of the grant. Options granted under these plans generally vest over three years and expire ten years from the date of the grant. Compensation expense and excess tax benefits associated with stock options are as follows:

 

             
    Year Ended
(In thousands)       October 1,    
2011		       October 2,    
2010		       October 3,    
2009

Stock options:

            

Compensation expense

   $1,203   $958   $937

Excess tax deficiencies (benefits)

            (8)       89       32

The remaining unrecognized compensation cost related to unvested options at October 1, 2011 was $587,000, which is expected to be recognized over a weighted average period of 1.61 years.

 

The fair value of each option award granted is estimated on the date of grant using a Monte Carlo valuation model. The weighted-average estimated fair values of stock options granted during 2011, 2010 and 2009 were $5.31, $4.54 and $5.43 per share, respectively, based on the following weighted-average assumptions:

 

             
    Year Ended
        October 1,    
2011		       October 2,    
2010		       October 3,    
2009

Expected term (in years)

     5.19        5.74        4.92   

Risk-free interest rate

     1.78%     2.28%     2.64%

Expected volatility

   55.15%   61.12%   74.53%

Expected dividend yield

     1.05%     1.31%     1.31%

The assumptions utilized in the Monte Carlo valuation model are evaluated and revised, as necessary, to reflect market conditions and actual historical experience. The risk-free interest rate for periods within the contractual life of the option was based on the U.S. Treasury yield curve in effect at the time of the grant. The dividend yield was calculated based on the Company’s annual dividend as of the option grant date. The expected volatility was derived using a term structure based on historical volatility and the volatility implied by exchange-traded options on the Company’s stock. The expected term for options was based on the results of a Monte Carlo simulation model, using the model’s estimated fair value as an input to the Black-Scholes-Merton model, and then solving for the expected term.

The following table summarizes stock option activity:

 

                                         
         

Exercise Price

Per Share

     Contractual
Term -		     Aggregate
Intrinsic		  
   

 

 

    

 

 

    

 

 

    

 

 

  
(Share amounts in thousands)   Options
Outstanding		     Range     Weighted
Average		     Weighted
Average		    

Value

(in thousands)

  
   

 

 

    

 

 

    

 

 

    

 

 

  

Outstanding at September 27, 2008

     531     $ 0.18 – $20. 27     $ 11.17                  
   

 

 

                                  

Granted

     171       7.55 – 11.60       9.27                  

Exercised

     (20 )      3.28 – 3.28       3.28               120  

Forfeited

     (9 )      15.64 – 20.27       18.07                  
   

 

 

                                  

Outstanding at October 3, 2009

     673       0.18 – 20.27       10.83                  
   

 

 

                                  

Granted

     200       9.16 – 9.39       9.27                  

Exercised

     (26 )      4.19 – 11.15       5.41               146  
   

 

 

                                  

Outstanding at October 2, 2010

     847       0.18 – 20.27       10.63                  
   

 

 

                                  

Granted

     171       10.72 – 12.43       11.49                  

Exercised

     (13 )      1.06 –  7.55       1.60               143  

Forfeited

     (11 )      11.15 – 11.15       11.15                  
   

 

 

                                  

Outstanding at October 1, 2011

     994       0.18 – 20.27       10.89       6.99 ye ars      1,005  
   

 

 

                                  

Vested and anticipated to vest in future at October 1, 2011

     972               10.91       6.95 ye ars      992  
           

Exercisable at October 1, 2011

     634               11.21       5.89 ye ars      816  

Restricted Stock Awards. Under the Company’s equity incentive plans, employees and directors may be granted restricted stock awards which are valued based upon the fair market value on the date of the grant. Restricted stock granted under these plans generally vests one to three years from the date of the grant. There were no restricted stock grants in 2011, 2010 and 2009. Amortization expense for restricted stock is as follows:

 

                         
    Year Ended  
(In thousands)       October 1,    
2011		         October 2,    
2010		         October 3,    
2009		  

Amortization expense

   $ 166     $ 470     $ 756  

There were no unvested restricted stock awards as of October 1, 2011.

During 2011, 2010 and 2009, 67,693, 48,141 and 25,254 shares, respectively, of employee restricted stock awards vested with a fair value of $771,000, $439,000 and $238,000, respectively. Upon vesting, employees have the option of remitting payment for the minimum tax obligation to the Company or net-share settling such that the Company will withhold shares with a value equivalent to the employees’ minimum tax obligation. During 2011, 2010 and 2009, a total of 12,633, 8,486 and 2,497 shares, respectively, were withheld to satisfy employees’ minimum tax obligations.

 

The following table summarizes restricted stock activity:

 

             
(Share amounts in thousands)   Restricted
Stock Awards
Outstanding		     Weighted Average
Grant Date Fair
Value

Balance, September 27, 2008

     165     $15.16
   

 

 

      

Granted

     —             —

Released

     (50 )        14.40
   

 

 

      

Balance, October 3, 2009

     115         15.50
   

 

 

      

Granted

     —             —

Released

     (48 )        18.53
   

 

 

      

Balance, October 2, 2010

     67         13.37
   

 

 

      

Granted

     —             —

Released

     (67 )        13.37
   

 

 

      

Balance, October 1, 2011

     —             —
   

 

 

      

Restricted stock units. On January 21, 2009, the Executive Compensation Committee of the Board of Directors approved a change in the equity compensation program such that awards of restricted stock units (“RSUs”) to employees and directors would be made in lieu of awards of restricted stock. RSUs granted under these plans are valued based upon the fair market value on the date of the grant and provide for a dividend equivalent payment which is included in compensation expense. The vesting period for RSUs is generally one to three years from the date of the grant. RSUs do not have voting rights. RSU grants and amortization expense are as follows:

 

                               
    Year Ended
(In thousands)   October 1,
2011		   October 2,
2010		   October 3,
2009

Restricted stock unit grants:

                              

Units

       119         140         136  

Market value

       $1,441         $1,298         $1,185  

Amortization expense

       1,548         830         343  

The remaining unrecognized compensation cost related to unvested RSUs on October 1, 2011 was $1.1 million which is expected to be recognized over a weighted average period of 1.79 years.

The following table summarizes RSU activity:

 

             
(Unit amounts in thousands)   Restricted
Stock Units
Outstanding		     Weighted Average
Grant Date Fair
Value

Balance, September 27, 2008

     —     $      —
   

 

 

      

Granted

     136           8.71

Released

     —           —
   

 

 

      

Balance, October 3, 2009

     136           8.71
   

 

 

      

Granted

     140           9.29

Released

     (37 )          7.55
   

 

 

      

Balance, October 2, 2010

     239           9.23
   

 

 

      

Granted

     119         12.08

Released

     (30 )          9.39
   

 

 

      

Balance, October 1, 2011

     328         10.25