Note 5 - Stock-Based Compensation

9 Months Ended

Jun. 29, 2013

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

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

(5) 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 June 29, 2013, there were 683,000 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 nine-month periods ended June 29, 2013 and June 30, 2012 are as follows:

	Three Months Ended					Nine Months Ended
(In thousands)	June 29, 2013			June 30, 2012		June 29, 2013			June 30, 2012
Stock options:
Compensation expense	$	148		$	132	$	634		$	580
Excess tax deficiencies (benefits)		(114	)		11		(445	)		(120	)

As of June 29, 2013, the remaining unamortized compensation cost related to unvested stock option awards was $475,000, which is expected to be recognized over a weighted average period of 1.25 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 June 29, 2013 and June 30, 2012 was $7.17 and $6.06, respectively, based on the following assumptions:

	Nine Months Ended
	June 29, 2013			June 30, 2012
Risk-free interest rate		1.25	%		1.18	%
Dividend yield		0.74	%		0.92	%
Expected volatility		48.15	%		54.67	%
Expected term (in years)		6.47			5.75

The following table summarizes stock option activity for the nine-month period ended June 29, 2013:

												Aggregate
	Options			Exercise Price Per Share						Contractual		Intrinsic
	Outstanding							Weighted		Weighted		Value
	(in thousands)			Range				Average		Average (years)		(in thousands)
Outstanding at September 29, 2012		1,160			$0.36	-	$20.27	$	11.09
Granted		65			16.45	-	16.45		16.45
Exercised		(365	)		0.36	-	12.43		9.25			$	2,691
Outstanding at June 29, 2013		860			5.43	-	20.27		12.27		6.61		4,657
Vested and anticipated to vest in the future at June 29, 2013		853							12.27		6.60		4,627
Exercisable at June 29, 2013		520							12.45		5.28		2,783

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 compensation expense for the three- and nine-month periods ended June 29, 2013 and June 30, 2012 are as follows:

	Three Months Ended				Nine Months Ended
(In thousands)	June 29, 2013		June 30, 2012		June 29, 2013		June 30, 2012
Restricted stock unit grants:
Units		-		-		43		54
Market value	$	-	$	-	$	703	$	703
Compensation expense		213		206		820		884

As of June 29, 2013, the remaining unrecognized compensation cost related to unvested RSUs was $850,000, which is expected to be recognized over a weighted average vesting period of 1.38 years.

The following table summarizes RSU activity during the nine-month period ended June 29, 2013:

(Unit amounts in thousands)	Restricted Stock Units Outstanding			Weighted Average Grant Date Fair Value
Balance, September 29, 2012		293		$	10.74
Granted		43			16.45
Forfeited		(5	)		10.72
Released		(67	)		10.40
Balance, June 29, 2013		264			11.75