STOCK BASED COMPENSATION (Tables)

9 Months Ended

Sep. 29, 2012

STOCK BASED COMPENSATION [Abstract]

Summary of stock based compensation expense by source and by financial statement line item

The table below summarizes stock based compensation by source and by financial statement line item for the three and nine month periods:

	Three months ended				Nine months ended
	September 29, 2012		October 1, 2011		September 29, 2012		October 1, 2011
Amortization of restricted stock	$	1,026	$	1,698	$	3,935	$	6,584
Amortization of ESP Plan		40		100		310		500
Amortization of stock option awards		127		432		535		1,212
Total stock based compensation	$	1,193	$	2,230	$	4,780	$	8,296
By Financial Statement line item
Cost of sales	$	208	$	400	$	737	$	1,603
Research and development expenses		387		512		1,373		2,785
Selling and administrative expenses		598		1,318		2,605		3,988
Restructuring charge		-		-		65		(80	)

Restricted stock and stock option awards activity

    The value of restricted stock grants are fixed upon the date of grant and amortized over the related vesting period of five months to three years.  Restricted stock is subject to forfeiture if employment terminates prior to vesting.  The Company estimates that approximately 2.5% of its restricted stock and stock option awards are forfeited annually (exclusive of LTI's, as described below).  The restricted stock shares carry voting and certain forfeitable dividend rights commencing upon grant, whereas restricted stock units do not. Neither restricted stock shares nor restricted stock units may be traded or transferred prior to vesting.  Grant, vest and forfeit activity and related weighted average (WA) price per share for restricted stock and for stock options during the period from January 1, 2011 to September 29, 2012 is presented in tabular form below:

	Restricted Stock Shares					Restricted Stock Units					Stock Options
	Shares			WA price/ share		Units			WA price/ unit		Issuable upon exercise			WA exercise price
Outstanding at January 1, 2011		180		$	8.39		1,460		$	4.49		4,143		$	4.96
Granted (1)		-			-		2,573			5.91		1,065			3.29
Shares vested/options exercised		(179	)		8.38		(1,654	)		5.08		(442	)		2.12
Forfeited/expired (2)		(1	)		9.72		(409	)		6.03		(491	)		9.37
Balance at December 31, 2011		-			-		1,970		$	5.52		4,275		$	4.32
Granted		-			-		641			2.35		6			2.29
Shares vested/options exercised		-			-		(1,085	)		4.72		(946	)		2.03
Forfeited/expired		-			-		(93	)		6.16		(281	)		7.33
Balance at September 29, 2012		-			-		1,433		$	4.67		3,054		$	4.76

(1) Year 2011 stock options granted include 417 performance stock option shares

(2) Year 2011 stock options forfeited include 167 performance stock option shares

Unrecognized stock based compensation cost

On February 16, 2012, subject to stockholder approval of additional 2005 Long-Term Incentive and Share Award Plan shares at the Company's 2013 Annual Stockholder Meeting, the Company awarded 260 restricted stock units to two of its officers.  50% of the restricted stock units will have time-based vesting conditions (time-based) and 50% will have performance-based vesting conditions (performance-based).  The time-based restricted stock units will vest 1/3rd on May 20, 2013, 1/3rd on February 18, 2014 and 1/3rd on February 18, 2015.  The performance-based restricted stock units will vest based on absolute total stockholder return for one-year, two-year and three-year periods starting from the baseline date of December 31, 2011, compared to total stockholder return targets for each of the respective periods.  In May, 2012, subject to stockholder approval at the Company's 2013 Annual Stockholder Meeting, an additional 608 time-based and 105 performance-based restricted stock units were awarded to employees of the Company.  These restricted stock units will vest consistent with the aforementioned officer awards.  Due to the uncertainty of the 2013 shareholder approval vote, neither compensation expense nor inclusion in disclosure tables for these awards is reported herein.

	As of September 29, 2012
Unrecognized stock based compensation cost
Option plans	$	696
Restricted stock	$	4,154
Weighted average remaining recognition period
Option plans	1.7 years
Restricted stock	1.5 years

Stock options outstanding by exercise price range

Stock options outstanding at September, 2012 are summarized as follows:

Range of exercise prices		Outstanding Options at September 29, 2012		Weighted average remaining contractual life		Weighted average exercise price		Exercisable at September 29, 2012		Weighted average exercise price
$	1.23 - $1.93		799		5.4	$	1.93		797	$	1.93
$	2.10 - $3.24		1,017		4.9	$	3.12		561	$	3.03
$	3.30 - $8.79		636		2.3	$	6.59		607	$	6.64
$	8.84 - $18.98		602		3.6	$	9.34		601	$	9.34

Weighted average assumptions for the valuation of equity awards

The fair value of these equity awards was estimated at the date of grant using a Black-Scholes option pricing model. The weighted average assumptions and fair values for stock based compensation grants used for the nine month periods ended September 29, 2012 and October 1, 2011 were (excludes the aforementioned LTI option grants):

	Nine months ended
	September 29, 2012			October 1, 2011
Stock option awards:
Risk-free interest rate		1.0	%		2.2	%
Expected volatility		70	%		65	%
Average expected term (in years)		5.0			5.0
Expected dividend yield		0.0	%		0.0	%
Weighted average fair value of options granted	$	1.32		$	1.85
ESP Plan:
Risk-free interest rate		0.2	%		0.1	%
Expected volatility		63	%		61	%
Average expected term (in years)		1.0			1.0
Expected dividend yield		0.0	%		0.0	%
Weighted average fair value of purchase option	$	0.48		$	0.75