Stock-Based Compensation

9 Months Ended

Sep. 29, 2013

Share-based Compensation [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Stock-Based Compensation

Our 2008 Equity Incentive Plan was amended and restated effective May 22, 2013 upon approval by our shareholders at our annual shareholders meeting. As amended, the plan authorizes us to issue up to 3.5 million shares of common stock, along with non-qualified stock options, stock appreciation rights, restricted stock and performance units to our officers, key employees, non-employee directors and consultants.  At September 29, 2013, there were 2.0 million shares available for future grants under this plan. No more than 600,000 shares may be used under the plan as “full value” awards, which include restricted stock and performance units.  It is our policy to issue shares from authorized but not issued shares upon the exercise of stock options.  Options are granted at not less than fair market value on the date of grant and expire no later than ten years after the date of grant.  Options and restricted shares granted under the plan generally require no less than a three year ratable vesting period.

During the first three quarters of 2013 there were no option grants. During the first three quarters of 2012, we granted options for a total of 247,500 shares.  The weighted average fair values at the grant dates for options issued during the first three quarters of 2012 was $5.10 per option share. The fair value of options at the grant date was estimated utilizing the Black-Scholes valuation model with the following weighted average assumptions for the first three quarters of 2012: (i) dividend yield on our common stock of 3.74 percent; (ii) expected stock price volatility of 41.2 percent; (iii) a risk-free interest rate of 1.36 percent; and (iv) an expected option term of 6.9 years.  During the first three quarters of 2013, the number of stock options exercised totaled 117,503 and 75,550 options were canceled. During the first three quarters of 2012, stock options totaling 52,325 were exercised, and 146,750 options were canceled.

During the first three quarters of 2013 and 2012, we granted restricted shares, or “full value” awards, totaling 92,631 and 33,550 shares, respectively. The fair values of each issued restricted share on the applicable date of grant averaged $17.61 and $16.92 for the first three quarters of 2013 and 2012, respectively. Restricted share awards, which are generally subject to forfeiture if employment terminates prior to the shares vesting, are expensed ratably over the vesting period. Shares of restricted stock are considered issued and outstanding shares at the date of grant and have the same dividend and voting rights as other common stock. Dividends paid on the restricted shares are non-forfeitable if the restricted shares do not ultimately vest.

Stock-based compensation expense related to our unvested stock options and restricted share awards was allocated as follows:

(Dollars in thousands)	Thirteen Weeks Ended						Thirty-nine Weeks Ended
	September 29, 2013			September 23, 2012			September 29, 2013			September 23, 2012
Cost of sales	$	50		$	49		$	168		$	187
Selling, general and administrative expenses	464			456			1,332			1,319
Stock-based compensation expense before income taxes	514			505			1,500			1,506
Income tax benefit	(132		)	(133		)	(360		)	(385		)
Total stock-based compensation expense after income taxes	$	382		$	372		$	1,140		$	1,121

As of September 29, 2013, a total of $2.7 million of unrecognized compensation cost related to non-vested awards is expected to be recognized over a weighted average period of approximately 1.7 years.  There were no significant capitalized stock-based compensation costs at September 29, 2013 and December 30, 2012.