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Note 6 - Stock-Based Compensation
 9 Months Ended
Jun. 30, 2012
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]
(6) 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. Effective February 21, 2012, the Company’s 2005 Equity Incentive Plan was amended to increase the number of shares available for future grants by 900,000 shares. As of June 30, 2012, there were 933,000 shares available for future grants under the plans.

Stock options. Under the Company’s equity incentive plans, employees and directors may be granted options to purchase shares of the Company’s 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 deficiencies (benefits) associated with stock options for the three- and nine-month periods ended June 30, 2012 and July 2, 2011 are as follows:

   
Three Months Ended
   
Nine Months Ended
 
(In thousands)
 
June 30,
2012
   
July 2,
2011
   
June 30,
2012
   
July 2,
2011
 
Stock options:
                       
Compensation expense
  $ 132     $ 266     $ 580     $ 773  
Excess tax deficiencies (benefits)
    11       -       (120 )     (81 )

As of June 30, 2012, the remaining unamortized compensation cost related to unvested stock option awards was $469,000, which is expected to be recognized over a weighted average period of 1.47 years.

The fair value of each option grant is estimated on the date of grant using a Monte Carlo valuation model based upon assumptions that 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 is based on the U.S. Treasury yield curve in effect at the time of the grant. The dividend yield is calculated based on the Company’s annual dividend as of the option grant date. The expected volatility is derived using a term structure based on historical volatility and the volatility implied by exchange-traded options on the Company’s common stock. The expected term for options is 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 estimated fair value of stock options granted during the nine-month periods ended June 30, 2012 and July 2, 2011 was $6.06 and $5.86, respectively, based on the following assumptions:

   
Nine Months Ended
 
   
June 30,
2012
   
July 2,
2011
 
Risk-free interest rate
    1.18 %     2.40 %
Dividend yield
    0.92 %     0.97 %
Expected volatility
    54.67 %     56.49 %
Expected term (in years)
    5.75       5.11  

The following table summarizes stock option activity for the nine-month period ended June 30, 2012:

   
Options
   
Exercise Price Per Share
 
Contractual
Term -
 
Aggregate
Intrinsic
 
   
Outstanding
(in thousands)
   
Range
   
Weighted
Average
 
Weighted
Average
 
Value
(in thousands)
 
Outstanding at October 1, 2011
    994     $ 0.18       -     $ 20.27     $ 10.89          
Granted
    76       13.06       -       13.06       13.06          
Exercised
    (12 )     0.18       -       0.18       0.18       $ 147  
Outstanding at June 30, 2012
    1,058       0.36       -       20.27       11.17  
6.57 years
    1,372  
                                                   
Vested and anticipated to vest in the future at June 30, 2012
    1,037                               11.17  
6.53 years
    1,357  
                                                   
Exercisable at June 30, 2012
    713                               11.19  
5.54 years
    1,140  

           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 for the three- and nine-month periods ended June 30, 2012 and July 2, 2011 are as follows:

   
Three Months Ended
   
Nine Months Ended
 
(In thousands)
 
June 30,
2012
   
July 2,
2011
   
June 30,
2012
   
July 2,
2011
 
Restricted stock unit grants:
                   
Units
    -       19       54       71  
Market value
  $ -     $ 276     $ 703     $ 928  
Amortization expense
    206       417       884       976  

As of June 30, 2012, the remaining unrecognized compensation cost related to unvested RSUs was $884,000, which is expected to be recognized over a weighted average vesting period of 1.64 years.

The following table summarizes RSU activity during the nine-month period ended June 30, 2012:

(Unit amounts in thousands)
 
Restricted
Stock Units
Outstanding
   
Weighted
Average
Grant Date
Fair Value
 
Balance, October 1, 2011
    328     $ 10.25  
Granted
    54       13.06  
Released
    (92 )     9.59  
Balance, June 30, 2012
    290       10.98  

Restricted stock. Under the Company’s equity incentive plans, employees and directors may be granted restricted stock awards (“RSAs”) which are valued based upon the fair market value on the date of the grant. The vesting period for RSAs is generally one to three years from the date of the grant. There were no RSAs granted during the three- and nine-month periods ended June 30, 2012 and July 2, 2011. Amortization expense for RSAs for the three- and nine-month periods ended June 30, 2012 and July 2, 2011 is as follows:

   
Three Months Ended
   
Nine Months Ended
 
(In thousands)
 
June 30,
2012
   
July 2,
2011
   
June 30,
2012
   
July 2,
2011
 
Amortization expense
  $ -     $ 33     $ -     $ 149  

There were no unvested RSAs as of June 30, 2012.