Stock-based compensation

3 Months Ended

Mar. 30, 2013

Share-based Compensation [Abstract]

Stock-based compensation

Stock-based compensation

The Company recognizes compensation expense for all share-based payments granted based on the grant-date fair value estimated in accordance with the provisions of the Financial Accounting Standards Board Accounting Standards Codification topic (“ASC”) 718-10. Compensation expense is recognized on a straight-line basis over the options’ or other awards’ estimated lives for fixed awards with ratable vesting provisions.

Under the Company’s 2012 Incentive Plan (“2012 Plan”), the Company's principal stock compensation plan as of May 9, 2012, the Company reserved up to a maximum of 3,200 shares of common stock for issuance upon the grant or exercise of stock options, restricted stock, restricted stock units (“RSUs”) and other types of awards, to directors and key employees through 2022. Option awards are granted with an exercise price equal to the market price of the Company’s common stock on the date of the grant and generally vest between three and five years with a 10-year contractual term. Restricted stock and RSUs are granted with a price equal to the market price of the Company’s common stock on the date of the grant and generally vest between three and five years.

The Company did not grant any options for the three months endedMarch 30, 2013. The Company granted 83 options to employees at a weighted-average grant-date fair value of $28.71 per share for the three months endedMarch 31, 2012. The Company recognized stock-based compensation costs related to stock options of $606 ($384 net of taxes) and $614 ($389 net of taxes) for the three months endedMarch 30, 2013 and March 31, 2012, respectively, which has been allocated to selling, general and administrative expenses. Pre-tax unrecognized compensation expense for stock options granted to employees and outside directors, net of estimated forfeitures, was $1,752 as of March 30, 2013, and will be recognized as expense over a weighted-average period of approximately 1.9 years.

The fair value of the option award is estimated on the date of grant using the Black-Scholes-Merton valuation model. Expected volatility is based on the historical volatility of the Company’s common stock. The Company uses historical data to estimate option exercise and forfeiture rates within the valuation model.

The Company granted 206 and 261 RSUs at a weighted-average grant-date fair value of $111.74 and $65.98 per unit for the three months endedMarch 30, 2013 and March 31, 2012, respectively. The Company recognized stock-based compensation costs related to the issuance of RSUs of $4,898 ($3,103 net of taxes) and $4,937 ($3,127 net of taxes) for the three months endedMarch 30, 2013 and March 31, 2012, respectively, which has been allocated to selling, general and administrative expenses. Pre-tax unrecognized compensation expense for unvested RSUs granted to employees, net of estimated forfeitures, was $33,167 as of March 30, 2013, and will be recognized as expense over a weighted-average period of approximately 3.0 years.

The Company did not grant any restricted stock awards for the three months endedMarch 30, 2013 or March 31, 2012. Compensation expense for restricted stock awards for the three months endedMarch 30, 2013 and March 31, 2012, respectively, was not significant.