STOCK-BASED COMPENSATION PLANS

9 Months Ended

Sep. 30, 2012

STOCK-BASED COMPENSATION PLANS

STOCK-BASED COMPENSATION PLANS

NOTE 10—STOCK-BASED COMPENSATION PLANS

        The Company accounts for stock-based awards in accordance with ASC 718, "Compensation—Stock Compensation." The Company has granted stock awards under its 1996 and 2004 stock incentive plans which generally vest between one and four years from the date of grant.

        The fair value of non-vested share units awarded by the Company is measured using the closing fair market value as reported on the NASDAQ Stock Market of the Company's stock on the date the awards are granted. Stock compensation expense related to non-vested share units, including performance-based share units, for the three months ended September 30, 2012 and October 2, 2011 was $2.7 million and $2.8 million, respectively. Stock compensation expense related to non-vested share units, including performance-based share units, for the nine months ended September 30, 2012 and October 2, 2011 was $7.7 million and $7.3 million, respectively. The following table presents the non-vested share unit activity for which only a service condition exists under the Company's stock-based compensation plans:

• Non-Vested Share Units—Service Based

	Three Months Ended				Nine Months Ended
	September 30, 2012		October 2, 2011		September 30, 2012		October 2, 2011
Non-vested share units granted, in millions		0.1		0.1		1.2		0.7
Weighted average grant date fair value of non-vested share units	$	4.54	$	7.14	$	4.29	$	8.11

• Non-Vested Share Units—Market Based

        The non-vested share units granted that are performance share units (PSUs) vest dependent upon the performance of the Company's stock price measured over a three-year period against a specified index. These market-based stock awards are eligible for a maximum payout of 150% of the share units granted. The table below represents the share unit activity and assumptions used to determine the fair value of the PSUs as estimated on the date of the grants by utilizing the Monte Carlo Simulation method calculation. The Monte Carlo Simulation method was used as the share units contain market condition criteria. The following table presents the assumptions used to determine the valuation of the PSUs for the three and nine months ended September 30, 2012 and October 2, 2011:

	Three Months Ended				Nine Months Ended
	September 30, 2012		October 2, 2011		September 30, 2012			October 2, 2011
Non-vested share units granted, in millions		—		—		0.6			0.5
Risk-free interest rate		—		—		0.4	%		1.0	%
Volatility		—		—		67	%		84	%
Expected term, years		—		—		3.0			3.0
Grant date fair value of non-vested share units		—		—	$	4.35		$	8.52

• Stock Options

        The fair value of the stock options granted during the three and nine months ended September 30, 2012 and October 2, 2011 was estimated on the date of grant using the Black-Scholes valuation model, with the assumptions shown below.

	Three Months Ended						Nine Months Ended
	September 30, 2012			October 2, 2011			September 30, 2012			October 2, 2011
Risk-free interest rate		1.1	%		1.8	%		1.3	%		2.4	%
Volatility		86	%		85	%		86	%		85	%
Estimated option life, years		5.8			5.8			5.8			5.8
Dividend yield		—			—			—			—
Stock options granted, in millions		0.1			0.1			2.0			1.2
Weighted-average grant date fair value of stock options	$	3.24		$	5.07		$	3.06		$	5.86
Stock compensation expense related to stock options, in millions	$	1.2		$	1.0		$	3.0		$	2.1