Share-Based Compensation

3 Months Ended

Mar. 30, 2013

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 three months ended March 30, 2013 and March 31, 2012:

	For the Three Months Ended
	March 30, 2013			March 31, 2012
Risk-free interest rate		0.55	%		0.66	%
Expected dividend yield		0	%		0	%
Expected option life		4 years			4 years
Expected volatility		48.4	%		50.7	%
Weighted-average expected volatility		48.4	%		50.7	%

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 $1,100 and $836 for the three months ended March 30, 2013 and March 31, 2012, respectively.

A summary of stock option activity and weighted-average exercise prices for the three months ended March 30, 2013 follows:

	Options			Weighted- Average Exercise Price		Weighted-Average Remaining Contractual Term		Aggregate Intrinsic Value as of March 30, 2013
Outstanding at January 1, 2013		831,504		$	36.31
Granted		238,767			43.78
Forfeited		(35,136	)		44.93
Exercised		(115,158	)		26.58
Outstanding at March 30, 2013		919,977		$	39.23		5.1	$	7,194
Options exercisable at March 30, 2013		455,199		$	31.50		4.0	$	6,438

The weighted-average grant-date fair value of the stock options granted during the three months ended March 30, 2013 and March 31, 2012 was $14.64 and $22.57 per option, respectively. The total intrinsic value of stock options exercised during the three months ended March 30, 2013 and March 31, 2012 was $2.0 million and $6.1 million, respectively.

The following table summarizes the restricted stock and restricted stock unit activity and weighted average grant-date fair values for the three months ended March 30, 2013:

	Shares			Weighted-Average Grant Date Fair Value
Non-vested at January 1, 2013		31,236		$	45.80
Granted		427			44.28
Forfeited		(1,586	)		51.89
Vested		(3,747	)		38.51
Non-vested at March 30, 2013		26,330		$	46.44

As of March 30, 2013, there was $8.8 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 2.6 years.