Stock-Based Compensation

6 Months Ended

Mar. 31, 2012

Stock-Based Compensation [Abstract]

Stock-Based Compensation

(6) 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. Effective February 21, 2012, the Company’s 2005 Equity Incentive Plan was amended to increase the number of shares available for future grants by 900,000 shares. As of March 31, 2012, there were 933,000 shares available for future grants under the plans.

Stock options. 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 six-month periods ended March 31, 2012 and April 2, 2011 are as follows:

	Three Months Ended								Six Months Ended
	March 31,				April 2,				March 31,				April 2,
(In thousands)	2012				2011				2012				2011
Stock options:
Compensation expense		$	319			$	280			$	448			$	507
Excess tax benefits			(126	)			(81	)			(131	)			(81	)

As of March 31, 2012, the remaining unamortized compensation cost related to unvested stock option awards was $601,000, which is expected to be recognized over a weighted average period of 1.59 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 three- and six-month periods ended March 31, 2012 and April 2, 2011 was $6.06 and $5.86, respectively, based on the following assumptions:

	Six Months Ended
	March 31,			April 2,
	2012			2011
Risk-free interest rate		1.18	%		2.40	%
Dividend yield		0.92	%		0.97	%
Expected volatility		54.67	%		56.49	%
Expected term (in years)		5.75			5.11

The following table summarizes stock option activity for the six-month period ended March 31, 2012:

	Options Outstanding (in thousands)			Exercise Price Per Share				Contractual Term -		Aggregate Intrinsic
				Range		Weighted Average		Weighted Average		Value (in thousands)
Outstanding at October 1, 2011		994		$	0.18 – $20.27	$	10.89
Granted		76			13.06 – 13.06		13.06
Expired		—			—         —		—
Exercised		(12	)		0.18 – 0.18		0.18			$	147
Outstanding at March 31, 2012		1,058			0.36 – 20.27		11.17		6.82 years		2,075
Vested and anticipated to vest in the future at March 31, 2012		1,037					11.17		6.78 years		2,048
Exercisable at March 31, 2012		713					11.19		5.79 years		1,636

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 six-month periods ended March 31, 2012 and April 2, 2011 are as follows:

	Three Months Ended				Six Months Ended
	March 31,		April 2,		March 31,		April 2,
(In thousands)	2012		2011		2012		2011
Restricted stock unit grants:
Units		54		52		54		52
Market value	$	703	$	652	$	703	$	652
Amortization expense		438		313		678		559

As of March 31, 2012, 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 1.79 years.

The following table summarizes RSU activity during the six-month period ended March 31, 2012:

(Unit amounts in thousands)	Restricted Stock Units Outstanding			Weighted Average Grant Date Fair Value
Balance, October 1, 2011		328		$10.25
Granted		54		13.06
Released		(76	)	8.58
Balance, March 31, 2012		306		11.16

Restricted stock. 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. The vesting period for RSAs is generally one to three years from the date of the grant. There were no RSAs granted during the three- and six-month periods ended March 31, 2012 and April 2, 2011. Amortization expense for RSAs for the three- and six-month periods ended March 31, 2012 and April 2, 2011 is as follows:

	Three Months Ended				Six Months Ended
	March 31,		April 2,		March 31,		April 2,
(In thousands)	2012		2011		2012		2011
Amortization expense	$	—	$	50	$	—	$	116

There were no unvested RSAs as of March 31, 2012.