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Share-Based Compensation
9 Months Ended
Oct. 02, 2011
Share-Based Compensation [Abstract] 
Share-Based Compensation

12. Share-Based Compensation

Share-based compensation expense, which includes stock options and restricted stock units, for the three and nine months ended October 2, 2011 and October 3, 2010, respectively, were as follows (unaudited):

 

                                 
    Three Months Ended     Nine Months Ended  
    October  2,
2011		     October  3,
2010		     October  2,
2011		     October  3,
2010		  
    (In thousands)  

Total cost of share-based payment plans

   $ 107     $ 106     $ 467     $ 394  

Stock options

The Company uses the Black Scholes option pricing model to estimate the fair value and compensation cost associated with employee incentive stock options which requires the consideration of historical employee exercise behavior data and the use of a number of assumptions including volatility of the Company’s stock price, the weighted average risk-free interest rate and the weighted average expected life of the options. Four thousand options were granted during the three and nine months ended October 2, 2011. There were no options granted during the three and nine months ended October 3, 2010.

The following table summarizes Lakes’ stock option activity during the nine months ended October 2, 2011 and October 3, 2010 (unaudited):

 

                                 
    Number of Common Shares        
    Options
outstanding		     Exercisable     Available
for grant		     Weighted-avg.
exercise
price		  

2011

                                

Balance at January 2, 2011

     2,031,084       904,076       699,215     $ 2.99  

Restricted stock unit activity, net

     —         —         1,667       3.25  

Forfeited/cancelled/expired

     (362,946 )      —         168,996       3.18  

Granted

     4,000       —         (4,000 )      2.29  
   

 

 

            

 

 

          

Balance at October 2, 2011 (*)

     1,672,138       991,670       865,878       2.95  
   

 

 

            

 

 

          

2010

                                

Balance at January 3, 2010

     1,704,187       442,350       1,121,413     $ 3.93  

Restricted stock unit activity, net

     —         —         3,333       3.25  

Forfeited/cancelled/expired

     (123,621 )      —         18,821       6.02  
   

 

 

            

 

 

          

Balance at October 3, 2010 (**)

     1,580,566       891,743       1,143,567       3.44  
   

 

 

            

 

 

          

 

(*) Options outstanding do not include 38,337 of outstanding restricted stock units.
(**) Options outstanding do not include 86,662 of outstanding restricted stock units.

As of October 2, 2011, the options outstanding had a weighted average remaining contractual life of 7.5 years, weighted average exercise price of $2.95 and aggregate intrinsic value of $0.3 million. The options exercisable have a weighted average exercise price of $3.44, a weighted average remaining contractual life of 6.6 years and aggregate intrinsic value of zero as of October 2, 2011.

There were no options exercised during the three and nine months ended October 2, 2011 and October 3, 2010. Lakes’ unrecognized share-based compensation related to stock options was approximately $0.8 million, as of October 2, 2011, which is expected to be recognized over a weighted-average period of 2.1 years.

Lakes issues new shares of common stock upon the exercise of options.

 

Restricted stock units

The following table summarizes Lakes’ restricted stock unit activity during the three months ended October 2, 2011 and October 3, 2010 (unaudited):

 

                 

Non-vested shares:

   Restricted
stock  units		     Weighted-average
grant-
date fair value		  

2011

                

Balance at January 2, 2011

     79,996     $ 3.25  

Vested

     (39,992 )      3.25  

Forfeited

     (1,667 )      3.25  
   

 

 

          

Balance at October 2, 2011

     38,337       3.25  
   

 

 

          

2010

                

Balance at January 3, 2010

     135,000     $ 3.25  

Vested

     (45,005 )      3.25  

Forfeited

     (3,333 )      3.25  
   

 

 

          

Balance at October 3, 2010

     86,662       3.25  
   

 

 

          

During the nine months ended October 2, 2011, 36,302 common shares were issued upon the vesting of restricted stock units, net of common shares redeemed at the election of the grantee for payroll tax payment. As of October 2, 2011, Lakes’ unrecognized share-based compensation was approximately $0.1 million related to non-vested restricted stock units, which is expected to be recognized over a weighted-average period of 0.3 years.