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Note 9 - Stock-Based Compensation

12 Months Ended

Sep. 27, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

(9) 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 September 27, 2014, there were 387,000 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
	September 27,			September 28,			September 29,
(In thousands)	2014			2013			2012
Stock options:
Compensation expense	$	1,139		$	951		$	909
Excess tax benefits		(575	)		(660	)		-

The remaining unrecognized compensation cost related to unvested options at September 27, 2014 was $454,000, which is expected to be recognized over a weighted average period of 1.40 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 2014, 2013 and 2012 were $7.00, $7.06 and $5.20 per share, respectively, based on the following weighted-average assumptions:

	Year Ended
	September 27,			September 28,			September 29,
	2014			2013			2012
Expected term (in years)		5.08			6.00			6.00
Risk-free interest rate		0.38	%		1.40	%		1.17	%
Expected volatility		39.57	%		47.32	%		52.97	%
Expected dividend yield		0.60	%		0.72	%		1.06	%

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							Contractual
				Per Share							Term -		Aggregate
											Weighted		Intrinsic
(Share amounts in thousands)	Options Outstanding			Range					Weighted Average		Average (years)		Value (in thousands)
Outstanding at October 1, 2011		994		$	0.18	-	$	20.27	$	10.89
Granted		178			10.23	-		13.06		11.44
Exercised		(12	)		0.18	-		0.18		0.18			$	147
Outstanding at September 29, 2012		1,160			0.36	-		20.27		11.09
Granted		131			16.45	-		17.22		16.84
Exercised		(373	)		0.36	-		12.43		9.27				2,744
Outstanding at September 28, 2013		918			5.43	-		20.27		12.65
Granted		136			19.08	-		20.50		19.80
Exercised		(183	)		5.43	-		20.27		10.42				1,789
Outstanding at September 27, 2014		871			6.89	-		20.50		14.23		6.41		5,866


Vested and anticipated to vest in future at September 27, 2014		869								14.23		6.40		5,858

Exercisable at September 27, 2014		594								12.85		5.23		4,826

The 2014 and 2013 stock option exercises included “net exercises,” pursuant to which the optionee received shares of common stock equal to the intrinsic value of the options (fair market value of common stock on the date of exercise less exercise price) reduced by any applicable withholding taxes.

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 year from the date of grant for RSUs granted to directors and three years from the date of the grant for RSUs granted to employees. RSUs do not have voting rights. RSU grants and compensation expense are as follows:

	Year Ended
	September 27,		September 28,		September 29,
(In thousands)	2014		2013		2012
Restricted stock unit grants:
Units		64		73		99
Market value	$	1,252	$	1,225	$	1,165
Compensation expense		1,522		1,210		1,299

The remaining unrecognized compensation cost related to unvested RSUs on September 27, 2014 was $753,000 which is expected to be recognized over a weighted average period of 1.56 years.

The following table summarizes RSU activity:

				Weighted
	Restricted			Average
	Stock Units			Grant Date
(Unit amounts in thousands)	Outstanding			Fair Value
Balance, October 1, 2011		328		$	10.25
Granted		99			11.77
Released		(134	)		10.30
Balance, September 29, 2012		293			10.74
Granted		73			16.77
Forfeited		(6	)		10.72
Released		(139	)		10.00
Balance, September 28, 2013		221			13.20
Granted		64			19.61
Released		(88	)		12.33
Balance, September 27, 2014		197			15.68

- 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.

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