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Stock-Based Compensation
 12 Months Ended
Dec. 31, 2011
Stock-Based Compensation [Abstract]  
Stock-Based Compensation

7. Stock-Based Compensation

We have two stock-based compensation plans covering officers, directors and certain employees and consultants: the 2004 Equity Incentive Plan (the “2004 Plan”) and the 2006 Long Term Equity Incentive Plan (the “2006 Plan”). The plans are designed to motivate and retain individuals who are responsible for the attainment of our primary long-term performance goals. The plans provide a means whereby our employees and directors develop a sense of proprietorship and personal involvement in our development and financial success and encourage them to devote their best efforts to our business. Although we do not have a formal policy on the matter, we issue new shares of our common stock to participants, upon the exercise of options or vesting of restricted stock, out of the total amount of common shares authorized for issuance under the 2004 Plan and the 2006 Plan.

The 2004 Plan provides for the grant of nonqualified stock options, incentive stock options and restricted shares of our common stock to participants of the plan selected by our Board of Directors or a committee of the Board that administers the 2004 Plan. We reserved 2,222,222 shares of our common stock for issuance under the 2004 Plan. The terms and conditions of awards under the 2004 Plan are determined by the administrator for each grant.

The 2006 Plan permits the grant of nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units, cash-based awards, and other stock-based awards to participants of the 2006 plan selected by our Board of Directors or a committee of the Board that administers the 2006 Plan. We reserved 3,200,000 shares of our common stock for issuance under the 2006 Plan. The terms and conditions of awards under the 2006 Plan are determined by the administrator for each grant. Awards issued under the 2006 Plan are subject to accelerated vesting in the event of a change in control as such event is defined in the 2006 Plan. On January 12, 2011, June 23, 2011, and December 1, 2011, the Compensation Committee granted 568,972, 50,000, and 200,000 restricted shares of our common stock to certain members of our management, respectively. There were no stock options granted during fiscal 2011, 2010 or fiscal 2009.

We recognize compensation expense equal to the grant-date fair value for all share-based payment awards that are expected to vest. This expense is recorded on a straight-line basis over the requisite service period of the entire award, unless the awards are subject to market or performance conditions, in which case we recognize compensation expense over the requisite service period of each separate vesting tranche to the extent the occurrence of such conditions are probable. All compensation expense related to our share-based payment awards is recorded in “Selling, general and administrative” expense in the Consolidated Statements of Operations.

 

As of December 31, 2011, there was $2.3 million of total unrecognized compensation expense related to restricted stock. The unrecognized compensation expense for restricted stock is expected to be recognized over weighted average term of 1.2 years. There was no future compensation expense remaining for options as of December 31, 2011. As of December 31, 2011, the weighted average remaining contractual term for our options and restricted stock is 5.9 years and 1.2 years. As of January 1, 2011, there was $0.1 million and $2.5 million of total unrecognized compensation expense related to stock options and restricted stock, respectively. The maximum contractual term for stock options and restricted stock is 10 years and 3 to 5 years, respectively.

For fiscal 2011, fiscal 2010 and fiscal 2009, our total stock-based compensation expense was $2.0 million, $4.0 million, and $3.0 million, respectively. We also recognized related income tax benefits of $0.8 million, $1.5 million and $1.2 million, respectively, which has been offset by a valuation allowance.

The total fair value of the options vested in fiscal 2011, fiscal 2010 and fiscal 2009 was $0.7 million, $1.0 million and $0.6 million, respectively. For restricted stock, the total fair value vested in fiscal 2011, fiscal 2010, and fiscal 2009 was $2.2 million, $1.5 million and $1.2 million, respectively.

There were no stock option exercises during fiscal 2011, fiscal 2010, or fiscal 2009. We present the benefits of tax deductions in excess of recognized compensation expense as both a financing cash inflow and an operating cash outflow in our Consolidated Statements of Cash Flows when present. There were no excess tax benefits in fiscal 2011, fiscal 2010, or fiscal 2009.

On December 14, 2010, the Compensation Committee approved an amendment to the 2008 Performance Share Award Agreement under the 2006 Plan. The Amendment provides that the Company may, at the discretion of the Compensation Committee, settle grants pursuant to Performance Share Award Agreements either in (i) one share of common stock of the Company for each Performance Share (as defined in the 2006 Plan) earned or (ii) a lump sum cash payment equal to the Fair Market Value (as defined in the 2006 Plan) of one share of common stock of the Company for each Performance Share earned. The Amendment was determined to be a modification of the award and an adjustment related to the difference in fair value was recorded in fiscal 2010. The award, which impacts eight employees, was classified as a liability award and was marked to market. On January 1, 2011, the fair value of these awards was based on the closing price of our common stock on December 31, 2010 of $3.66. These awards were settled in cash on January 7, 2011.

The tables below summarize activity and include certain additional information related to our outstanding employee stock options for the three years ended December 31, 2011. There have been no new employee stock option grants for the three years ended December 31, 2011.

 

      September 30,       September 30,  
    Shares     Weighted
Average
Exercise
Price		  

Options outstanding at January 3, 2009

     1,038,515       6.78  

Options granted

     —         —    

Options exercised

     —         —    

Options forfeited

     (30,268 )      13.67  

Options expired

     (79,932 )      9.39  
   

 

 

          

Options outstanding at January 2, 2010

     928,315       6.34  

Options granted

     —         —    

Options exercised

     —         —    

Options forfeited

     (2,300 )      14.01  

Options expired

     (1,200 )      14.01  
   

 

 

          

Options outstanding at January 1, 2011

     924,815       6.31  
   

 

 

          

Options granted

     —         —    

Options exercised

     —         —    

Options forfeited

     —         —    

Options expired

     (19,499 )      12.53  
   

 

 

          

Options outstanding at December 31, 2011

     905,316       6.18  
   

 

 

          

Options exercisable at December 31, 2011

     905,316     $ 6.18  
   

 

 

          

 

 

      September 30,       September 30,       September 30,       September 30,       September 30,       September 30,  
    Outstanding     Exercisable        

Price Range

   Number of
Options		     Weighted
Average
Exercise
Price		     Remaining
Contractual  Life
(in Years)		     Number of
Options		     Weighted
Average
Exercise
Price		     Remaining
Contractual  Life
(in Years)		  

$4.66

     750,000     $ 4.66       6.2       750,000     $ 4.66       6.2  

$10.29-$14.01

     155,316     $ 13.51       4.3       155,316     $ 13.51       4.3  
   

 

 

                    

 

 

                  
      905,316               5.9       905,316               5.9  

The following tables summarize activity for our performance shares, restricted stock awards and restricted stock unit awards during fiscal 2011, fiscal 2010, and fiscal 2009:

 

      September 30,       September 30,       September 30,       September 30,  
          Performance     Restricted  
    Restricted Stock     Shares     Stock Units  
          Weighted              
    Number of
Awards		     Average Fair
Value		     Number of
Awards		     Number of
Awards (1)		  

Outstanding at January 3, 2009

     1,201,288       5.62       292,306       164,700  

Granted

     681,151       2.64       —         —    

Vested

     (250,000 )      4.86       —         —    

Forfeited

     (93,310 )      5.58       (111,701 )      (20,150 ) 
   

 

 

            

 

 

    

 

 

  

Outstanding at January 2, 2010

     1,539,129       4.42       180,605       144,550  

Granted

     747,737       3.07       —         —    

Increase due to assumption changes

     —         —         112,955       —    

Vested

     (340,578 )      4.49       —         —    

Forfeited

     (32,000 )      3.47       (52,725 )      (16,600 ) 
   

 

 

            

 

 

    

 

 

  

Outstanding at January 1, 2011

     1,914,288       2.67       240,835       127,950  

Granted

     819,240       3.14       —         —    

Vested

     (364,303 )      6.16       (240,835 )      (63,200 ) 

Forfeited

     (7,801 )      3.26       —         (15,400 ) 
   

 

 

            

 

 

    

 

 

  

Outstanding at December 31, 2011

     2,361,424     $ 3.22       —         49,350  
   

 

 

    

 

 

    

 

 

    

 

 

  

 

(1) As the restricted stock units will be settled in cash, the fair value of these awards is marked-to-market each reporting period through the date of settlement. During fiscal 2011, certain restricted stock units vested and approximately $0.2 million was paid out to settle these awards.