Equity-based Compensation

3 Months Ended

Mar. 29, 2013

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

Equity-based Compensation

Equity-based Compensation

During both the 2013 and 2012 first quarters, the Company granted stock options to certain of its employees. The Company utilizes the Black-Scholes option-pricing model to estimate the fair value of stock options granted on the date of grant. The stock options granted, the weighted-average fair value of an option, and the weighted-average assumptions used to calculate the fair value of a stock option for the respective quarters are as follows:

	For the Quarter ended
	March 29, 2013			March 30, 2012
Stock options granted	107,000			106,000
Weighted-average fair value	$	8.38		$	7.54
Expected volatility	56.1		%	66.4		%
Risk-free interest rate	0.6		%	0.6		%
Expected term (years)	4.0			4.0
Expected dividend yield	1.0		%	0.0		%

The Company used historical volatility calculated using daily closing prices for its common stock over periods that match the expected term of the granted option to estimate the expected volatility for its stock option grants. The risk-free interest rate assumption was based upon U.S. Treasury yields appropriate for the expected term of the Company’s stock options based upon the date of grant. The expected term of the stock options granted was based upon the options’ expected vesting schedule and historical exercise patterns. The expected dividend yield was based upon the Company’s recent history of paying dividends, which began in the 2013 first quarter, and the expectation of paying dividends in the foreseeable future.

During the 2013 first quarter, the Company issued restricted stock representing 98,000 shares to certain of its employees on February 12, 2013 with a value of $20.68 per share. During the 2012 first quarter, the Company also issued restricted stock representing 127,500 shares to certain of its employees on February 14, 2012 with a value of $15.04 per share. The stock vests over a period of four years, with 25% of the stock vesting one year from the date of grant, and another 25% vesting each year thereafter until the stock is fully vested to the employee. The Company is recognizing compensation expense for these shares over the expected term of the restricted stock, or four years. The restricted shares issued are considered outstanding, can be voted, and are eligible to receive dividends in the event are paid. However, the restricted shares do not include a non-forfeitable right for the holder to receive dividends and none will be paid in the event the awards do not vest. Accordingly, only vested shares of outstanding restricted stock are included in the basic earnings per share calculation. The shares were granted from the 1991 Restricted Stock Plan.