Note 7 – Stock-Based Compensation

The Company has various stockholder-approved programs which allow for the grant of stock-based compensation to officers, employees, and non-employee directors of the Company.

The amount of compensation cost related to stock-based payment transactions is measured based on the grant-date fair value of the equity instruments issued. The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model. The Company determines compensation cost for restricted stock units ("RSUs"), phantom stock units, and restricted stock based on the grant-date fair value of the underlying common stock adjusted for expected dividends paid over the required vesting period for non-participating awards. Compensation cost is recognized over the period that an officer, employee, or non-employee director provides service in exchange for the award.

The following table summarizes stock-based compensation expense recognized:

	Fiscal quarters ended
	March 29, 2014		March 30, 2013

Stock options	$	-	$	12
Restricted stock units		810		928
Phantom stock units		131		108
Total	$	941	$	1,048

The Company recognizes compensation cost for RSUs that are expected to vest and records cumulative adjustments in the period that the expectation changes.

The following table summarizes unrecognized compensation cost and the weighted average remaining amortization periods at March 29, 2014 (amortization periods in years):

	Unrecognized Compensation Cost		Weighted Average Remaining Amortization Periods

Stock options	$	-		0.0
Restricted stock units		11,570		1.7
Phantom stock units		-		0.0
Total	$	11,570

2007 Stock Incentive Plan

The Company's 2007 Stock Incentive Program (the "2007 Program") permits the grant of up to 3,000,000 shares of restricted stock, unrestricted stock, RSUs, and stock options, to officers, employees, and non-employee directors of the Company. Such instruments are available for grant until May 22, 2017.

Stock Options

In addition to stock options outstanding pursuant to the 2007 Program, during the periods presented, the Company had stock options outstanding under previous stockholder-approved stock option programs. These programs are more fully described in Note 12 to the Company's consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2013. No additional options may be granted pursuant to these programs.

At December 31, 2013 and March 29, 2014, there were 109,000 options outstanding with a weighted average exercise price of $15.24. At March 29, 2014, the weighted average remaining contractual life of all outstanding options was 2.98 years.

At March 29, 2014, there were no unvested options outstanding.

The pretax aggregate intrinsic value (the difference between the closing stock price on the last trading day of the first fiscal quarter of 2014 of $14.49 per share and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on March 29, 2014 is $56. This amount changes based on changes in the market value of the Company's common stock. During the three fiscal months ended March 29, 2014, no options were exercised.

Restricted Stock Units

RSU activity under the 2007 Program as of March 29, 2014 and changes during the three fiscal months then ended are presented below (number of RSUs in thousands):

	Number of RSUs			Weighted Average Grant-date Fair Value per Unit
Outstanding:
January 1, 2014		1,059		$	13.40
Granted		336			13.48
Vested*		(146	)		15.87
Cancelled or forfeited		(102	)		17.45
Outstanding at March 29, 2014		1,147		$	12.75

Expected to vest at March 29, 2014		760

_______

* The number of RSUs vested includes shares that the Company withheld on behalf of employees to satisfy the statutory tax withholding requirements.

The number of performance-based RSUs that are scheduled to vest on January 1, 2015 is evaluated based on the full achievement of the defined target performance criteria. The number of performance-based RSUs that are scheduled to vest on January 1, 2016 and January 1, 2017 increases ratably based on the achievement of defined performance criteria between the established target and maximum levels. RSUs with performance-based vesting criteria are expected to vest as follows (number of RSUs in thousands):

Vesting Date	Expected to Vest		Not Expected to Vest		Total
January 1, 2015		-		276		276
January 1, 2016		111		111		222
January 1, 2017		192		-		192

Phantom Stock Plan

The Company maintains a phantom stock plan for certain senior executives. The plan authorizes the grant of up to 300,000 phantom stock units to the extent provided for in the Company's employment agreements with such senior executives. Each phantom stock unit entitles the recipient to receive a share of common stock at the individual's termination of employment or any other future date specified in the applicable employment agreement. Phantom stock units participate in dividend distribution on the same basis as the Company's common stock and Class B common stock. Dividend equivalents are issued in the form of additional units of phantom stock. The phantom stock units are fully vested at all times.

Phantom stock unit activity under the phantom stock plan as of March 29, 2014 and changes during the three fiscal months then ended are presented below (number of phantom stock units in thousands):

	Number of units		Grant-date Fair Value per Unit
Outstanding:
January 1, 2014		107
Granted		10	$	13.12
Dividend equivalents issued		1
Redeemed for common stock		-
Outstanding at March 29, 2014		118