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STOCK-BASED COMPENSATION
 3 Months Ended
Mar. 29, 2013
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION
Stock-based compensation includes expense charges for all stock-based awards to employees and directors. Such awards include restricted and unrestricted stock awards, performance share units, stock options, and shares purchased under an employee stock purchase plan (“ESPP”).
Stock-based compensation expense was as follows (in millions):
 
Thirteen weeks ended
 
March 29, 2013
 
March 30, 2012
Restricted and unrestricted stock and performance share units expense
$
2.8

 
$
2.8

ESPP expense
0.1

 
0.1

Total stock-based compensation expense
$
2.9

 
$
2.9


Restricted and unrestricted stock and performance share units
Stock-based awards are issued under our 2005 Long-Term Equity Incentive Plan as amended. Restricted stock is granted to executive officers and key employees and vests annually over periods ranging from three to four years. Unrestricted stock granted to our directors vests immediately. Restricted and unrestricted stock-based compensation expense is calculated based on the grant-date market value. We recognize compensation expense on a straight-line basis over the vesting period, net of estimated forfeitures.
Performance share units have been granted to executive officers and certain key employees since 2010. Vesting of the performance share units is contingent upon the achievement of revenue and profitability growth goals at the end of each three year performance period. Each performance share unit is equivalent to a share of common stock. Compensation expense is calculated based on the grant-date market value of our stock and is recognized ratably over the performance period for the performance share units which are expected to vest. Our estimate of the performance units expected to vest is reviewed and adjusted as appropriate each quarter.
Restricted, unrestricted stock and performance share units activity for the thirteen weeks ended March 29, 2013 was as follows (shares in thousands):
 
Shares
 
Price (1)
Non-vested at beginning of period
1,435

 
$
15.23

Granted
548

 
$
18.31

Vested
(396
)
 
$
15.36

Forfeited
(72
)
 
$
17.65

Non-vested at the end of the period
1,515

 
$
16.20

_____________________
(1)
Weighted average market price on grant-date.
As of March 29, 2013, total unrecognized stock-based compensation expense related to non-vested restricted stock was approximately $9.7 million, of which $8.5 million is estimated to be recognized over a weighted average period of 1.8 years through 2017. As of March 29, 2013, total unrecognized stock-based compensation expense related to performance share units, assuming achievement of maximum financial goals was approximately $10.3 million, of which $4.8 million is currently estimated to be recognized over a weighted average period of 2.1 years through 2016.
Stock options
Our 2005 Long-Term Equity Incentive Plan as amended provides for both nonqualified stock options and incentive stock options (collectively, “stock options”) for directors, officers, and certain employees. We issue new shares of common stock upon exercise of stock options. The majority of our unvested stock options “cliff vest” in three years from the date of grant and expire if not exercised within seven years from the date of grant. The maximum contractual term for our outstanding awards is ten years.
The fair value of each stock option granted is estimated on the grant date using the Black-Scholes valuation model, and the resulting expense is recognized over the requisite service period for each separately vesting portion of the award. The assumptions used to calculate the fair value of options granted reflect market conditions and our experience. Compensation expense is recognized only for those options expected to vest, with forfeitures estimated based on our historical experience and future expectations.
There were no stock options granted during the thirteen weeks ended March 29, 2013 or during 2012.
Stock option activity was as follows (shares in thousands):
 
Shares
 
Weighted Average Exercise Price
Outstanding, December 28, 2012
639

 
$
16.91

Exercised
(152
)
 
$
13.31

Expired/Forfeited
(124
)
 
$
21.04

Outstanding, March 29, 2013
363

 
$
17.02


 
 
 
Exercisable, March 29, 2013
363

 
$
17.02

Total unrecognized stock-based compensation expense related to non-vested stock options was de minimis as of March 29, 2013.
Employee stock purchase plan
Our Employee Stock Purchase Plan (“ESPP”) allows eligible employees to contribute up to 10% of their earnings toward the monthly purchase of the Company's common stock. The employee's purchase price is the lesser of 85% of the fair market value of shares on either the first day or the last day of each month. Under our ESPP we have reserved for purchase 1.0 million shares of common stock. We consider our ESPP to be a component of our stock-based compensation and accordingly we recognize compensation expense over the requisite service period for stock purchases made under the plan. The requisite service period begins on the enrollment date and ends on the purchase date, the duration of which is one month.
During the thirteen weeks ended March 29, 2013 and March 30, 2012, participants purchased 24,000 and 28,000 share respectively, from the plan for cash proceeds of $0.3 million for each period.