SHARE-BASED COMPENSATION

We have two plans under which share-based awards currently can be granted: the 2011 Equity Incentive Plan (2011 Plan), which provides for the granting of a maximum of 1,936,000 shares, and the 2002 Equity Incentive Plan (2002 Plan), which provides for the granting of a maximum of 700,000 shares. A committee of the Board of Directors (Committee) administers the plans and has the authority to determine to whom awards will be made, the amount of the awards, and the other terms and conditions of the awards. Key employees, including any executive officer, employee-director, and non-employee director, are eligible to receive awards under the plans.

Both plans permit the granting of incentive or nonqualified stock options, restricted stock awards, performance share awards, and stock appreciation rights. Under the 2011 Plan, awards in any form other than options or stock appreciation rights are counted as two shares for every one share actually issued. The contractual term and exercise price for stock options granted under the plans are determined by the Committee. However, the contractual term may not exceed ten years, and the exercise price may not be lower than the fair market value of a share on the date of grant. Options vest over periods determined when granted, generally four years, and are exercisable until the contractual term expires.

Under both plans, shares subject to restricted stock award may be issued when the award is granted or at a later date. The stock awards are subject to terms determined by the Committee, have voting rights, and may include specified performance objectives. The sale or transfer of these shares is restricted during the vesting period. Recipients of restricted stock awards earn any dividends declared during the vesting period that are paid only if the shares vest.

Total share-based compensation expense was $2,310, $2,706, and $1,905 in 2013, 2012, and 2011.

Stock Options

The weighted-average fair value of stock options granted in 2012 and 2011, was estimated at $4.53 and $8.14 per share using the Black-Scholes option-pricing model based on the following assumptions:

Risk-Free Interest Rate: We base the risk-free interest rate on the implied yield currently available on U.S. Treasury zero-coupon issues with a remaining term equivalent to the expected term of the options being valued.

Dividend Yield: We calculate the expected dividend yield based on our projection of future stock prices and dividends expected to be paid. The range of expected dividends used in 2012 and 2011 was $0.25 to $0.50 per share.

Expected Term: The expected term represents the period of time that our stock options are expected to be outstanding and is based on our historic exercise behavior.

Expected Volatility: We calculate the expected volatility factor based on the Company's historical stock prices for a period of time equal to the expected term of the award.

The weighted-average of significant assumptions used to estimate the fair value of options granted is as follows:



	2012		2011
Risk-free interest rate	0.7	%	1.4	%
Dividend yield	—		4.5	%
Expected term	4 years		4 years
Expected volatility	79.3	%	79.9	%

A summary of our stock option activity and related information for 2013 is as follows:



	Number of Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life	Aggregate Intrinsic Value
Outstanding at December 30, 2012	708,666		$	32.29
Granted	—		—
Exercised	(500	)	7.85
Expired	(50,530	)	56.44
Forfeited	(32,906	)	36.68
Outstanding at December 29, 2013	624,730		$	30.13	6 years	—
Fully vested or expected to vest at December 29, 2013	614,480		$	30.26	6 years	—
Exercisable at December 29, 2013	458,395		$	34.49	5 years	—

Expense is amortized on a straight-line basis over the vesting period, generally four years, and is based on the number of options ultimately expected to vest and therefore has been reduced for estimated forfeitures. As of December 29, 2013, there was a total of $640 of share-based compensation related to stock options that will be amortized to expense over a weighted-average remaining service period of 1.2 years. The total intrinsic value of options exercised during 2013 was $11.

Service-Based Stock Awards

We have awarded nonvested stock to employees and directors that vests based on service requirements. The fair value of the service-based stock awards is based on the closing market price of our common stock on the date of award. Expense is amortized on a straight-line basis over the vesting period, generally four years or less, and is based on the number of awards ultimately expected to vest and therefore has been reduced for estimated forfeitures. The weighted-average grant date fair value of service-based nonvested stock issued in 2013, 2012, and 2011 was $12.59, $7.85, and $16.95 per share. The total fair value of stock that vested during 2013, 2012, and 2011 was $52, $84, and $229. As of December 29, 2013, there was a total of $1,866 of share-based compensation related to service-based nonvested stock that will be amortized to expense over a weighted-average remaining service period of 2.6 years years.

A summary of our service-based stock award activity and related information for 2013 is as follows:



	Number of Shares		Weighted- Average Grant Date Fair Value
Nonvested at December 30, 2012	115,679		$	11.01
Granted	155,083		12.59
Vested	(14,372	)	20.45
Forfeited	(8,410	)	11.16
Nonvested at December 29, 2013	247,980		$	11.45

Performance-Based Stock Awards

The fair value of performance-based stock awards is based on the closing market price of our common stock on the date of award. Performance-based stock awards vest only upon the achievement of specific measurable performance criteria and are subject to additional holding periods.

We recognize compensation expense for stock awards subject to performance criteria when it is probable that the performance goal will be achieved. Compensation expense is recognized for the total amount of performance-based shares expected to vest and is subject to adjustment based on the actual level of achievement of the performance goal. Expense for performance-based awards with graded vesting is recognized under the accelerated recognition method, whereby each vesting is treated as a separate award with expense for each vesting recognized ratably over the requisite service period. If the minimum level of the performance goals is not attained, the applicable portion of the stock award will be forfeited and canceled, and all expense recognized to that date is reversed.

In 2013, the Company awarded shares of performance-based restricted stock that will be earned based on the financial performance of the Company. Shares will be earned each quarter based on achievement of quarterly financial goals, but will not vest until October of 2016. If a minimum target is not achieved in any quarter, all unvested shares will be forfeited. Achievement of a superior target four quarters in a row allows all earned shares to vest immediately. No shares issued in 2013 have yet vested.

In 2012, the Company awarded shares of performance-based restricted stock that were earned based on the financial performance of the Company over a two-year period. Shares were earned upon achievement of a one-year performance goal and a two-year cumulative performance goal; a portion of which are then subject to additional holding periods. Additional shares were issued in 2013 for exceeding the one-year performance goal and additional shares will be issued in 2014 for exceeding the two-year cumulative performance goal.

The weighted-average grant date fair value of service-based nonvested stock issued in 2013, 2012, and 2011 was $13.59, $7.85, and $16.95 per share. As of December 29, 2013, there was a total of $2,599 of share-based compensation related to performance-based nonvested stock that will be amortized to expense over a weighted-average remaining service period of 2.6 years. The total fair value of performance-based stock that vested during 2013 was $193.

A summary of our performance-based stock award activity and related information for 2013 is as follows:



	Number of Shares		Weighted- Average Grant Date Fair Value
Nonvested at December 30, 2012	198,920		$	9.26
Granted	238,917		13.59
Vested	(69,607	)	11.89
Forfeited	(17,689	)	7.85
Nonvested at December 29, 2013	350,541		$	11.76