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Stock-based compensation
9 Months Ended
Oct. 03, 2015
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 FASB 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 and nine months ended October 3, 2015 and September 27, 2014. The Company recognized stock-based compensation costs related to stock options of $18 ($11 net of taxes) and $191 ($121 net of taxes) for the three months ended October 3, 2015 and September 27, 2014, respectively, which has been allocated to cost of sales and selling, general and administrative expenses. The Company recognized stock-based compensation costs related to stock options of $191 ($120 net of taxes) and $666 ($422 net of taxes) for the nine months ended October 3, 2015 and September 27, 2014, respectively, which has been allocated to cost of sales and selling, general and administrative expenses. Pre-tax unrecognized compensation expense for stock options granted to employees and outside directors, net of estimated forfeitures, was $54 as of October 3, 2015, and will be recognized as expense over a weighted-average period of approximately 0.89 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 5 RSUs at a weighted-average grant-date fair value of $203.85 per unit for the three months ended October 3, 2015. The Company granted 248 RSUs at a weighted-average grant-date fair value of $185.66 per unit for the nine months ended October 3, 2015. The Company did not grant any RSUs for the three months ended September 27, 2014. The Company granted 189 RSUs at a weighted average grant-date fair value of $144.75 per unit for the nine months ended September 27, 2014. The Company recognized stock-based compensation costs related to the issuance of RSUs of $8,084 ($5,211 net of taxes) and $7,119 ($4,510 net of taxes) for the three months ended October 3, 2015 and September 27, 2014, respectively, which has been allocated to cost of sales and selling, general and administrative expenses. The Company recognized stock-based compensation costs related to the issuance of RSUs of $24,297 ($15,634 net of taxes) and $20,831 ($13,196 net of taxes) for the nine months ended October 3, 2015 and September 27, 2014, respectively, which has been allocated to cost of sales and selling, general and administrative expenses. Pre-tax unrecognized compensation expense for unvested RSUs granted to employees, net of estimated forfeitures, was $37,970 as of October 3, 2015, and will be recognized as expense over a weighted-average period of approximately 2.40 years.