v2.4.0.8
Capital stock
 12 Months Ended
Dec. 28, 2013
Stockholders Equity Note Abstract  
Stockholders Equity Note Disclosure Text Block

12. Capital Stock

The Company is authorized to issue an unlimited number of common shares without par value and an unlimited number of special shares without par value (of which none are outstanding).

 

Stock Incentive Plans

 

On May 28, 2013, the Company's shareholders approved the 2013 Stock Incentive Plan (the “2013 Plan”), which permits the grant of a variety of stock-based awards, including restricted stock, restricted stock units, performance-based awards, stock options, and stock appreciation rights to selected employees and directors of the Company. The Company reserved 1,250,000 common shares for issuance under the 2013 Plan plus 867,031 additional shares previously reserved and available for grants under the Company's 2002 Amended and Restated Stock Option Plan (the “2002 Plan”). The Company had previously reserved a total of 7,500,000 common shares under the 2002 Plan for issuance on the exercise of stock options granted to employees and directors. As of May 28, 2013, the Company combined the 2002 Plan into the 2013 Plan, such that all equity awards thereafter are made under the 2013 Plan. As at December 28, 2013, 2,172,811 securities remained available for issuance under the 2013 Plan.

 

Stock options granted in the years ended December 28, 2013 and December 29, 2012 vest ratably on each of the first through fifth anniversaries of the grant date and expire on the tenth anniversary of the grant date. Options granted prior to January 1, 2012 generally vest ratably on each of the first through fifth anniversaries from the date of grant and expire on the sixth anniversary of the grant date. Stock options granted by the Company contain an exercise price that is equal to the closing market price of the shares on the day prior to the grant date. Any consideration paid by employees or directors on exercise of stock options or purchase of stock is credited to capital stock.

 

Details of stock option activity for the year ended December 28, 2013 are as follows:

       Weighted-  
       average  
     Weighted-remaining  
     averagecontractualAggregate
    Optionsexercise priceterm (years)intrinsic value
Outstanding at beginning of year 3,687,500$ 5.46   
Granted 1,054,000  7.45   
Exercised (440,240)  4.19   
Forfeited or expired (276,800)  6.51   
Outstanding at end of year 4,024,460$ 5.85 6.7$ 16,747
Exercisable at end of year 1,119,680$ 4.80 3.7$ 5,839

The weighted-average grant-date fair values of all stock options granted in the years ended December 28, 2013, December 29, 2012 and December 31, 2011 were $4.44, $3.41 and $4.36, respectively. The weighted-average assumptions used in the Black-Scholes option pricing model to determine the fair value of the options granted in those years were as follows:

    December 28, 2013December 29, 2012December 31, 2011
Dividend yield(1)0%0%0%
Expected volatility(2)63.1%65.8%68.0%
Risk-free interest rate(3)1.3%1.2%1.8%
Expected life of options (years)(4) 6.5 6.5 6.0

(1)       Determined based on expected annual dividend yield at the time of grant.

(2)       Determined based on historical volatility of the Company's common shares over the expected life of the option.

(3)       Determined based on the yield on U.S. Treasury zero-coupon issues with maturity dates equal to the expected life of the option.

(4)       For the years ended December 28, 2013 and December 29, 2012, determined using simplified method, as the Company changed the term of its stock option grants from six years to 10 years and, as a result, historical exercise data may no longer provide a reasonable basis upon which to estimate expected life. For the year ended January 1, 2011, determined based on historical exercise and forfeiture patterns.

 

The fair value of the options is based on estimates of the number of options that management expects to vest, which is estimated to be 85% of the granted amounts.

 

Details of stock options outstanding as at December 28, 2013 are as follows:

      Vested Weighted-TotalWeighted-
 Exercise price rangeoutstanding average priceoutstandingaverage price
Expiry date Low  Highoptions (vested)options (total)
2014$ 4.06 $ 13.35 170,500$ 5.69 170,500$ 5.69
2015  0.91   1.92 277,080  1.64 402,860  1.64
2016  4.45   5.62 211,300  4.50 403,300  4.50
2017  4.88   7.72 266,800  7.11 725,200  7.12
2022  5.14   5.73 194,000  5.66 1,269,600  5.57
2023  7.09   8.23 -  - 1,053,000  7.45
       1,119,680$ 4.80 4,024,460$ 5.85

Earnings from continuing operations for the year ended December 28, 2013 included $3,255 (December 29, 2012 – $2,753; December 31, 2011 – $2,090) of stock compensation expense related to the Company's stock-based compensation arrangements, including $485 (December 29, 2012 – $501; December 31, 2011 – $354) in stock-based compensation for the options issued by Opta Minerals to its employees. In addition, the Company realized a cash tax benefit of $170 (December 29, 2012 – $12; December 31, 2011 – $86) relating to options granted in prior years and exercised in the current year, which was recorded as an increase in additional paid-in capital. Total compensation costs related to non-vested awards not yet recognized as an expense is $8,032 as at December 28, 2013, which will be amortized over a weighted-average remaining vesting period of 2.2 years.

 

Employee Share Purchase Plan

 

The Company maintains an employee share purchase plan whereby employees can purchase common shares through payroll deductions. In the year ended December 28, 2013, the Company's employees purchased 80,215 common shares (December 29, 2012 – 111,078; December 31, 2011 – 119,028) for total proceeds of $549 (December 29, 2012 – $546; December 31, 2011 – $626). As at December 28, 2013, 1,363,771 common shares are remaining to be granted under this plan.

 

Warrants

 

On February 5, 2010, the Company issued warrants exercisable for up to 250,000 common shares at an exercise price of $3.25 per share as partial payment for general investment banking financial advisory services. On June 11, 2010, the Company issued warrants exercisable for up to 600,000 common shares at an exercise price of $5.11 per share as partial payment for advisory services in connection with the sale of the Canadian Food Distribution assets. A fair value of $2,163 in the aggregate was assigned to these warrants, determined using the Black-Scholes option pricing model. The fair value of the warrants was expensed in full as of the dates of issuance, with the offset recorded as an increase to additional paid-in capital. The warrants expire on the fifth anniversary of the respective dates of issuance. As at December 28, 2013, none of the warrants had been exercised.