Note 8 - Stock-Based Compensation

12 Months Ended

Sep. 29, 2012

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

(8) 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 September 29, 2012, there were 786,000 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 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 deficiencies (benefits) associated with stock options are as follows:

	Year Ended
(In thousands)	September 29, 2012		October 1, 2011			October 2, 2010
Stock options:
Compensation expense	$	909	$	1,203		$	958
Excess tax deficiencies (benefits)		-		(8	)		89

The remaining unrecognized compensation cost related to unvested options at September 29, 2012 was $618,000, which is expected to be recognized over a weighted average period of 1.5 years.

The fair value of each option award granted is estimated on the date of grant using a Monte Carlo valuation model. The weighted-average estimated fair values of stock options granted during 2012, 2011 and 2010 were $5.20, $5.31 and $4.54 per share, respectively, based on the following weighted-average assumptions:

	Year Ended
	September 29, 2012			October 1, 2011			October 2, 2010
Expected term (in years)		6.00			5.19			5.74
Risk-free interest rate		1.17	%		1.78	%		2.28	%
Expected volatility		52.97	%		55.15	%		61.12	%
Expected dividend yield		1.06	%		1.05	%		1.31	%

The assumptions utilized in the Monte Carlo valuation model 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 was based on the U.S. Treasury yield curve in effect at the time of the grant. The dividend yield was calculated based on the Company’s annual dividend as of the option grant date. The expected volatility was derived using a term structure based on historical volatility and the volatility implied by exchange-traded options on the Company’s stock. The expected term for options was 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 following table summarizes stock option activity:

				Exercise Price Per Share						Contractual Term - Weighted		Aggregate Intrinsic
(Share amounts in thousands)	Options Outstanding			Range				Weighted Average		Average (years)		Value (in thousands)
Outstanding at October 3, 2009		673		$	0.18	-	$20.27	$	10.83
Granted		200			9.16	-	9.39		9.27
Exercised		(26	)		4.19	-	11.15		5.41			$	146
Outstanding at October 2, 2010		847			0.18	-	20.27		10.63
Granted		171			10.72	-	12.43		11.49
Exercised		(13	)		1.06	-	7.55		1.60				143
Forfeited		(11	)		11.15	-	11.15		11.15
Outstanding at October 1, 2011		994			0.18	-	20.27		10.89
Granted		178			10.23	-	13.06		11.44
Exercised		(12	)		0.18	-	0.18		0.18				147
Outstanding at September 29, 2012		1,160			0.36	-	20.27		11.09		6.63		1,919
Vested and anticipated to vest in future at September 29, 2012		1,147							11.09		6.61		1,904
Exercisable at September 29, 2012		802							11.10		5.59		1,540

Restricted stock awards. Under the Company’s equity incentive plans, employees and directors may be granted restricted stock awards 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 in 2012, 2011 and 2010.  Amortization expense for restricted stock is as follows:

	Year Ended
(In thousands)	October 1, 2011		October 2, 2010
Amortization expense	$	166	$	470

There were no unvested restricted stock awards as of September 29, 2012.

During 2011 and 2010, 67,693 and 48,141 shares, respectively, of employee restricted stock awards vested with a fair value of $771,000 and $439,000, respectively. 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 employees’ minimum tax obligation. During 2011 and 2010, a total of 12,633 and 8,486 shares, respectively, were withheld to satisfy employees’ minimum tax obligations.

The following table summarizes restricted stock activity:

(Share amounts in thousands)	Restricted Stock Awards Outstanding			Weighted Average Grant Date Fair Value
Balance, October 3, 2009		115		$	15.50
Granted		-			-
Released		(48	)		18.53
Balance, October 2, 2010		67			13.37
Granted		-			-
Released		(67	)		13.37
Balance, October 1, 2011		-			-

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 are as follows:

	Year Ended
(In thousands)	September 29, 2012		October 1, 2011		October 2, 2010
Restricted stock unit grants:
Units		99		119		140
Market value	$	1,165	$	1,441	$	1,298
Amortization expense		1,299		1,548		830

The remaining unrecognized compensation cost related to unvested RSUs on September 29, 2012 was $970,000 which is expected to be recognized over a weighted average period of 1.75 years.

The following table summarizes RSU activity:

(Unit amounts in thousands)	Restricted Stock Units Outstanding			Weighted Average Grant Date Fair Value
Balance, October 3, 2009		136		$	8.71
Granted		140			9.29
Released		(37	)		7.55
Balance, October 2, 2010		239			9.23
Granted		119			12.08
Released		(30	)		9.39
Balance, October 1, 2011		328			10.25
Granted		99			11.77
Released		(134	)		10.30
Balance, September 29, 2012		293			10.74