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Note 4 - Stock-Based Compensation

9 Months Ended

Jun. 28, 2014

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

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

(4) 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 June 28, 2014, there were 480,000 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 benefits associated with stock options for the three- and nine-month periods ended June 28, 2014 and June 29, 2013 are as follows:

	Three Months Ended						Nine Months Ended
	June 28,			June 29,			June 28,			June 29,
(In thousands)	2014			2013			2014			2013
Stock options:
Compensation expense	$	221		$	148		$	744		$	634
Excess tax benefits		(31	)		(114	)		(222	)		(445	)

As of June 28, 2014, the remaining unamortized compensation cost related to unvested stock option awards was $360,000, which is expected to be recognized over a weighted average period of 1.25 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 three- and nine-month periods ended June 28, 2014 and June 29, 2013 was $6.93 and $7.17, respectively, based on the following assumptions:

	Nine Months Ended
	June 28,			June 29,
	2014			2013
Risk-free interest rate		1.56	%		1.25	%
Dividend yield		0.62	%		0.74	%
Expected volatility		41.46	%		48.15	%
Expected term (in years)		4.94			6.47

The following table summarizes stock option activity for the nine-month period ended June 28, 2014:

	Options			Exercise Price Per Share						Contractual Term - Weighted	Aggregate Intrinsic
	Outstanding							Weighted		Average	Value
	(in thousands)		Range					Average		(in years)	(in thousands)
Outstanding at September 28, 2013	918		$	5.43	-	$	20.27	$	12.65
Granted	67			19.08	-		19.08		19.08
Exercised	(113	)		5.43	-		13.06		10.10		$	1,074
Outstanding at June 28, 2014	872			5.43	-		20.27		13.47	5.92		5,589

Vested and anticipated to vest in the future at June 28, 2014	870								13.47	5.91		5,580

Exercisable at June 28, 2014	581								12.70	4.55		4,180

Stock option exercises include “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. Restricted stock units (“RSUs”) granted under the Company’s equity incentive 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 compensation expense for the three- and nine-month periods ended June 28, 2014 and June 29, 2013 is as follows:

	Three Months Ended				Nine Months Ended
	June 28,		June 29,		June 28,		June 29,
(In thousands)	2014		2013		2014		2013
Restricted stock unit grants:
Units		-		-		40		43
Market value	$	-	$	-	$	763	$	703
Compensation expense		328		213		1,033		820

As of June 28, 2014, the remaining unrecognized compensation cost related to unvested RSUs was $752,000, which is expected to be recognized over a weighted average vesting period of 1.36 years.

The following table summarizes RSU activity during the nine-month period ended June 28, 2014:

				Weighted
	Restricted			Average
	Stock Units			Grant Date
(Unit amounts in thousands)	Outstanding			Fair Value
Balance, September 28, 2013		221		$	13.20
Granted		40			19.08
Released		(49	)		13.63
Balance, June 28, 2014		212		$	14.21

- 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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