Share-Based Compensation

9 Months Ended

Oct. 01, 2011

Share-Based Compensation [Abstract]

Share-Based Compensation

NOTE F – SHARE-BASED COMPENSATION

Share-based compensation cost is measured at the grant date based on the fair value of the award and is recognized over the service period, typically the vesting period. The vesting period for the share-based compensation awarded by the Company is generally three years. The Company uses the Black-Scholes option pricing model to determine the fair value of stock option grants. The Company uses the closing market price of its common stock on the date of grant to determine the fair value of restricted stock and restricted stock units.

The Company used the following assumptions for the Black-Scholes option-pricing model to determine the fair value of options granted during the nine months ended October 1, 2011 and October 2, 2010:

	For the Nine Months Ended
	October 1, 2011		October 2, 2010
Risk-free interest rate		0.66% and 1.83%		1.85% and 2.14%
Expected dividend yield		0%		0%
Expected option life		4 years		4 years
Expected volatility		47.9% - 48.7%		43.5% and 46.5%
Weighted-average expected volatility		48.7%		46.5%

Historical information was the primary basis for the selection of the expected dividend yield, expected volatility and the expected lives of the options. The risk-free interest rate was based on yields of U.S. zero coupon issues and U.S. Treasury issues, with a term equal to the expected life of the option being valued.

The Company recorded total share-based compensation expense of $676 and $596 for the three months ended October 1, 2011 and October 2, 2010, respectively, and $2,070 and $1,819 for the nine months ended October 1, 2011 and October 2, 2010, respectively.

A summary of stock option activity and weighted average exercise prices for the nine months ended October 1, 2011 follows:

	Options			Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term		Aggregate Intrinsic Value as of October 1, 2011
Outstanding at January 1, 2011		1,098,859		$	21.37
Granted		271,412			35.89
Forfeited		(26,993	)		28.21
Exercised		(397,498	)		19.47
Outstanding at October 1, 2011		945,780		$	26.13		4.8	$	6,273
Options exercisable at October 1, 2011		493,973		$	22.94		3.9	$	4,255

The weighted-average grant-date fair value of the stock options granted during the nine months ended October 1, 2011 and October 2, 2010 was $14.15 and $9.30 per option, respectively. The total intrinsic value of stock options exercised during the three months ended October 1, 2011 and October 2, 2010 was $1.4 million and $0.0 million, respectively. The total intrinsic value of stock options exercised during the nine months ended October 1, 2011 and October 2, 2010 was $8.4 million and $0.2 million, respectively. The total fair value of stock options vested during the three months ended October 1, 2011 and October 2, 2010 was $0.0 million and $0.0 million, respectively. The total fair value of stock options vested during the nine months ended October 1, 2011 and October 2, 2010 was $1.6 million and $1.7 million, respectively.

The following table summarizes the restricted stock and restricted stock unit activity and weighted average grant-date fair values for the nine months ended October 1, 2011:

	Shares			Weighted-Average Grant Date Fair Value
Non-vested at beginning of period		40,313		$	23.53
Granted		18,117			38.97
Forfeited		(624	)		18.96
Vested		(28,207	)		26.10
Non-vested at October 1, 2011		29,599		$	30.62

As of October 1, 2011, there was $4.5 million of total unrecognized stock-based compensation expense related to non-vested stock-based compensation arrangements. The expense is expected to be recognized over a weighted average period of 2.4 years.