Share-Based Compensation

9 Months Ended

Oct. 05, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Note 3 – Share-Based Compensation

The Company is required to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model.  The value of the portion of the awards ultimately expected to vest is recognized as expense over the requisite service period.  We recognized share-based compensation expense as a component of selling, general and administrative expense in our Consolidated Statements of Income (Loss) in the amount of $0.7 million during the third quarter 2013 as compared to a $2.9 million net credit related to share-based compensation during the third quarter 2012.  During year-to-date 2013, share-based compensation expense was $1.9 million as compared to a $1.3 million net credit related to share-based compensation during year-to-date 2012.  The net credit during 2012 related to share-based compensation is due to reductions in estimated payouts for unvested performance units outstanding under the Company’s Long-Term Incentive Plan (“LTIP”).

We have four equity compensation plans under which incentive performance units, stock appreciation rights, and other forms of share-based compensation have been or may be granted, primarily to key employees and non-employee members of the Board of Directors.  These plans include the Amended 2009 Incentive Award Plan (“2009 Plan”), the Amended 2000 Stock Incentive Plan (“2000 Plan”), the Director Deferred Compensation Plan, and the 1997 Non-Employee Director Stock Compensation Plan.  These plans are more fully described in Part II, Item 8 in our Annual Report on Form 10-K for the fiscal year ended December 29, 2012 under the caption “Footnote 10 – Share-based Compensation Plans” and in our Definitive Proxy Statement on Schedule 14A filed on March 11, 2013.

Since 2009, awards have taken the form of performance units (including share units pursuant to our LTIP) and restricted stock units (“RSUs”). 

Performance units pursuant to our LTIP were granted during each of fiscal years 2010 through 2013 under the 2009 Plan.  These units vest at the end of a three-year period.  On December 29, 2012, 101,739 units outstanding from the LTIP grants made during fiscal 2010 vested and were cancelled without conversion to shares of common stock because the Company did not achieve the minimum performance metrics of the LTIP for the related performance period required for a payout of common shares.

During the year-to-date 2013, a total of 300,099 units were granted pursuant to our LTIP.  For these awards, depending on a comparison of the Company’s actual Fiscal 2013 results for Consolidated EBITDA and sales to the Company’s Fiscal 2013 budget for Consolidated EBITDA and sales, a participant could receive a number of shares ranging from zero to 200% of the number of performance units granted.  Compensation expense equal to the grant date fair value (for shares expected to vest) is recorded through equity over the three-year vesting period as the units can only be settled in stock.

During fiscal 2008 through 2010, RSUs were awarded to certain executives of the Company.  Awards vest in increments over the term of the grant or cliff vest on the fifth anniversary of the grant date, as designated in the award documents.  In addition to the time vesting criteria, awards granted in 2008 and 2009 to two of the Company’s executives include performance vesting conditions.  The Company records expense for such awards over the service vesting period if the Company anticipates the performance vesting conditions will be satisfied.

The following table summarizes activity in our share-based compensation plans during year-to-date 2013:

(in thousands, except vesting periods)	Service Based Grants (Board Units and RSUs)	Weighted Average Remaining Restriction/ Vesting Period (Years)	Performance Based Grants (LTIP & Performance RSUs)	Weighted Average Remaining Restriction/ Vesting Period (Years)
Outstanding at December 29, 2012	512.2	0.1	641.7	0.9
Granted	13.4		300.6
Forfeited/cancelled	-		(30.1)
Restrictions lapsed/ units settled	(9.1)		(48.5)
Shares deferred upon vesting/settlement & dividend equivalents on deferred shares(1)	12.3		7.0
Outstanding at October 5, 2013	528.8	0.1	870.7	1.1
Vested at December 29, 2012	475.4		303.1
Vested at October 5, 2013	479.1		261.7

⁽¹⁾ “Shares deferred upon vesting/settlement” above are net of the performance adjustment factor applied to the “units settled” for the participants that deferred shares as provided in the plan.

The weighted-average grant-date fair value of time vesting equity units and performance vesting units granted during year-to-date 2013 was $21.18 and $20.85, respectively.