15. Employee Stock Based Compensation

2006 Plan

On June 5, 2006, we adopted the 2006 Equity Incentive Plan (the “2006 Plan”) whereby equity-based awards may be granted by the Board to eligible non-employee directors, selected officers and other employees, advisors and consultants of ours.

On April 6, 2010, our stockholders approved the PGT, Inc. Amended and Restated 2006 Equity Incentive Plan (the “Amended and Restated 2006 Equity Incentive Plan”).

Amended and Restated 2006 Equity Incentive Plan

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total number of shares of common stock available for grant thereunder, 7,000,000, and

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set forth 1,500,000 as the maximum number of shares that may be made subject to awards in any calendar year to any “covered employee” (within the meaning of Section 162(m) of the Internal Revenue Code).

There were 541,863, 472,035, and 1,092,310 shares available for grant under the 2006 Plan at December 28, 2013, December 29, 2012, and December 31, 2011, respectively.

New Issuances

During 2013, we issued 22,581 shares of restricted stock awards to certain board members and non-executive employees of the Company. The restrictions on these awards lapse at various time periods through 2016 and have a weighted average fair value on date of grant of $6.76 based on the NASDAQ market price of the common stock on the close of business on the day the awards were granted.

During 2012, we issued 673,390 options to certain directors, executives and non-executive employees of the Company. These options vest at various time periods through 2017 and have a weighted average exercise price of $2.42 based on the NASDAQ market price of the underlying common stock on the close of business on the day the options were granted.

During 2011, we issued 35,000 options to certain non-executive employees of the Company. These options vest at various time periods through 2016 and have a weighted average exercise price of $2.21 based on the NASDAQ market price of the underlying common stock on the close of business on the day the options were granted.

The compensation cost that was charged against income for stock compensation plans was $1.0 million, $1.4 million, and $1.8 million, respectively, for the years ended December 28, 2013, December 29, 2012, and December 31, 2011, and is included in selling, general and administrative expenses in the accompanying consolidated statements of operations. We recognized $0.4 million in income tax benefits for share-based compensation in the year ended December 28, 2013. There was no income tax benefit recognized for share-based compensation for the years ended December 29, 2012, December 31, 2011, as a result of the valuation allowance on deferred taxes. We currently expect to satisfy share-based awards with registered shares available to be issued.

The fair value of each stock option grant was estimated on the date of grant using a Black-Scholes option-pricing model with the following weighted average assumptions used for grants under the 2006 Plan in the following years:

2013: no options granted.

2012: dividend yield of 0%, expected volatility of 70.38%, risk-free interest rate 0.8 %, and expected life of 5 years.

2011: dividend yield of 0%, expected volatility of 70.74%, risk-free interest rate of 2.2%, and expected life of 5 years.

The expected life of options granted represents the period of time that options granted are expected to be outstanding and was determined based on historical experience. The expected volatility is based on the Company’s common stock. The risk-free rate for periods within the contractual term of the options is based on U.S. Treasury yield for instruments with a maturity equal to the life of the option in effect at the time of grant.

Stock Options

A summary of the status of our stock options as of December 28, 2013, is presented below:


	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Life
Outstanding at December 29, 2012		7,219,145		$	1.95
Granted		—			—
Exercised		(1,922,167	)	$	1.86
Forfeited/Expired		(92,409	)	$	2.02

Outstanding at December 28, 2013		5,204,569		$	1.97		6.0 Years

Exercisable at December 28, 2013		2,970,640		$	1.90		5.5 Years

The following table summarizes information about employee stock options outstanding at December 28, 2013, (dollars in thousands, except per share amounts):


Exercise Price	Remaining Contractual Life		Outstanding		Outstanding Intrinsic Value		Exercisable		Exercisable Intrinsic Value
$1.51		0.1 Years	$	391,167	$	3,325		391,167	$	3,325
$0.92		2.1 Years		117,063		1,064		117,063		1,064
$1.60-$2.31		6.2 Years		4,346,339		34,809		2,403,076		19,252
$2.59-$3.25		8.4 Years		350,000		2,578		59,334		436

				5,204,569	$	41,776		2,970,640	$	24,077

The weighted average fair value of options granted during the fiscal years ended December 29, 2012, and December 31, 2011, were $2.42 and $2.21, respectively. The aggregate intrinsic value of options outstanding and of options exercisable as of December 29, 2012, was $18.9 million and $10.0 million, respectively. The aggregate intrinsic value of options outstanding and of options exercisable as of December 31, 2011, was $0.1 million and $0.1 million, respectively. The total grant date fair value of options vested during the fiscal years ended December 28, 2013, December 29, 2012, and December 31, 2011, was $1.4 million, $1.4 million and $1.8 million, respectively.

For the fiscal years ended December 28, 2013, we received $3.6 million in proceeds from the exercise of 1,922,167 options for which we recognized $0.4 million in excess tax benefits through additional paid in capital. The aggregate intrinsic value of stock options exercised during the fiscal year ended December 28, 2013, was $14.1 million. For the fiscal years ended December 29, 2012, we received $0.1 million in proceeds from the exercise of 66,838 options for which there was no tax benefit realized. The aggregate intrinsic value of stock options exercised during the fiscal year ended December 29, 2012, was $0.1 million. For the fiscal year December 31, 2011, there were no exercises of stock options and therefore no proceeds received or tax benefits recognized.

As of December 28, 2013, there was $0.5 million of total unrecognized compensation cost related to non-vested stock option compensation arrangements granted which is expected to be recognized in earnings straight-line over a weighted average period of 1.2 years.

Non-Vested (Restricted) Share Awards

There were 22,581 restricted shares awards granted in the year ended December 28, 2013, which will vest during 2014. There were no share awards granted in the year ended December 29, 2012.

A summary of the status of non-vested share awards as of December 28, 2013, and changes during the year then ended are presented below:


	Number of Shares		Weighted Average Fair Value
Outstanding at December 29, 2012		—		—
Granted		22,581	$	6.76
Vested		—		—
Forfeited/Expired		—		—

Outstanding at December 28, 2013		22,581	$	6.76

As of December 28, 2013, the remaining compensation cost related to non-vested share awards was immaterial.