Stock-Based Compensation

9 Months Ended

Jul. 02, 2011

Stock-Based Compensation [Abstract]

Stock-Based Compensation

(7) Stock-Based Compensation

     Under the Company’s equity incentive plans, employees and directors may be granted stock options, restricted stock, restricted stock units and performance awards. As of July 2, 2011, there were 277,000 shares available for future grants under the plans.

     Stock option awards. Under the Company’s equity incentive plans, employees and directors may be granted options to purchase shares of the Company’s common stock at the fair market value on the date of the grant. Options granted under these plans generally vest over three years and expire ten years from the date of the grant. Compensation expense and excess tax benefits associated with stock options for the three- and nine-month periods ended July 2, 2011 and July 3, 2010 are as follows:

	Three Months Ended				Nine Months Ended
	July 2,		July 3,		July 2,		July 3,
(In thousands)	2011		2010		2011		2010
Stock options:
Compensation expense	$	266	$	214	$	773	$	695
Excess tax benefits		—		6		81		3

     As of July 2, 2011, the remaining unamortized compensation cost related to unvested stock option awards was $537,000, which is expected to be recognized over a weighted average period of 1.32 years.

     The fair value of each option grant is estimated on the date of grant using a Monte Carlo valuation model based upon assumptions that are evaluated and revised, as necessary, to reflect market conditions and actual historical experience. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. The dividend yield is calculated based on the Company’s annual dividend as of the option grant date. The expected volatility is derived using a term structure based on historical volatility and the volatility implied by exchange-traded options on the Company’s common stock. The expected term for options is based on the results of a Monte Carlo simulation model, using the model’s estimated fair value as an input to the Black-Scholes-Merton model, and then solving for the expected term.

     The estimated fair value of stock options granted during the nine-month periods ended July 2, 2011 and July 3, 2010 was $5.86 and $4.62, respectively, based on the following assumptions:

	Nine Months Ended
	July 2,			July 3,
	2011			2010
Risk-free interest rate		2.40	%		2.69	%
Dividend yield		0.97	%		1.29	%
Expected volatility		56.49	%		60.68	%
Expected term (in years)		5.11			5.71

     The following table summarizes stock option activity for the nine-month period ended July 2, 2011:

											Contractual	Aggregate
	Options			Exercise Price Per Share							Term -	Intrinsic
	Outstanding								Weighted		Weighted	Value
	(in thousands)			Range					Average		Average	(in thousands)
Outstanding at October 2, 2010		847		$	0.18	-	$	20.27	$	10.63
Granted		77			12.43	-		12.43		12.43
Expired		—			—	-		—		—
Forfeited		(10	)		11.15	-		11.15		11.15
Exercised		(13	)		1.06	-		7.55		1.60
Outstanding at July 2, 2011		901			0.18	-		20.27		10.91	6.95 years	$	2,335
Vested and anticipated to vest in the future at July 2, 2011		883								10.92	6.91 years		2,294
Exercisable at July 2, 2011		560								11.16	5.85 years		1,574

     Restricted stock awards. Under the Company’s equity incentive plans, employees and directors may be granted restricted stock awards (“RSAs”) which are valued based upon the fair market value on the date of the grant. Restricted stock granted under these plans generally vests one to three years from the date of the grant. There were no restricted stock grants during the three- and nine-month periods ended July 2, 2011 and July 3, 2010. Amortization expense for restricted stock for the three- and nine-month periods ended July 2, 2011 and July 3, 2010 is as follows:

	Three Months Ended				Nine Months Ended
	July 2,		July 3,		July 2,		July 3,
(In thousands)	2011		2010		2011		2010
Amortization expense	$	33	$	96	$	149	$	364

     As of July 2, 2011, the remaining unrecognized compensation cost related to unvested restricted stock awards was $17,000, which is expected to be recognized over a weighted average vesting period of 0.13 years.

     During the nine-month periods ended July 2, 2011 and July 3, 2010, 40,580 and 26,620 shares, respectively, of employee restricted stock awards vested. Upon vesting, employees have the option of remitting payment for the minimum tax obligation to the Company or net-share settling such that the Company will withhold shares with a value equivalent to the respective employee’s minimum tax obligation. A total of 6,757 and 5,225 shares were withheld during the nine-month periods ended July 2, 2011 and July 3, 2010, respectively, to satisfy employees’ minimum tax obligations.

     The following table summarizes restricted stock activity during the nine-month period ended July 2, 2011:

				Weighted
	Restricted			Average
	Stock Awards			Grant Date
(Share amounts in thousands)	Outstanding			Fair Value
Balance, October 2, 2010		67		$	13.37
Granted		—			—
Released		(40	)		11.15
Balance, July 2, 2011		27		$	16.69

     Restricted stock units. On January 21, 2009, the Executive Compensation Committee of the Board of Directors approved a change in the equity compensation program such that awards of restricted stock units (“RSUs”) to employees and directors would be made in lieu of awards of restricted stock. RSUs granted under these plans are valued based upon the fair market value on the date of the grant and provide for a dividend equivalent payment which is included in compensation expense. The vesting period for RSUs is generally one to three years from the date of the grant. RSUs do not have voting rights. RSU grants and amortization expense for the three- and nine-month periods ended July 2, 2011 and July 3, 2010 are as follows:

	Three Months Ended				Nine Months Ended
	July 2,		July 3,		July 2,		July 3,
(In thousands)	2011		2010		2011		2010
Restricted stock unit grants:
Units		19		—		71		78
Market value	$	276	$	—	$	928	$	732
Amortization expense		417		193		976		545

     As of July 2, 2011, the remaining unrecognized compensation cost related to unvested RSUs was $1.1 million, which is expected to be recognized over a weighted average vesting period of 1.43 years.

     The following table summarizes RSU activity during the nine-month period ended July 2, 2011:

				Weighted
	Restricted			Average
	Stock Units			Grant Date
(Unit amounts in thousands)	Outstanding			Fair Value
Balance, October 2, 2010		239		$	9.23
Granted		71			12.99
Released		(30	)		9.39
Balance, July 2, 2011		280		$	10.17