Equity-based Compensation

3 Months Ended

Mar. 27, 2020

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Equity-based Compensation

10. Equity-based Compensation

During the 2020 first quarter, the Company granted restricted stock totaling 380,128 shares. There were 215,326 restricted stock grants issued during the 2019 first quarter. All grants in 2020 and 2019 were funded out of treasury stock.

Director Board fees are paid exclusively in deferred stock units. Of the shares granted during the 2020 first quarter, 170,848 shares represented restricted stock units that were granted to Board members. The shares vest in four equal quarterly increments and the Company is expensing these grants ratably during the quarter in which they vest. There were no additional shares granted to the directors in the 2020 year-to-date period. Grants of similar units to the Board members totaled 215,326 in the 2019 first quarter.    

  Of the shares granted in the 2020 first quarter, 209,280 shares were granted to senior management, of which 115,410 shares included a performance condition. The shares will only vest, in part, to senior management if at least 80% of a three-year cumulative target for diluted earnings per share is met for the three-year period ended December 31, 2022.  If at least 80% of the three-year EPS target is not met, the grants will expire. No performance awards were granted during the 2019 first quarter.

The remaining shares granted in the 2020 and 2019 first quarters include shares that vest ratably over a period of three or four years, beginning one year from the date of grant.

The restricted shares granted are considered outstanding, can be voted, and are eligible to receive dividends in the event any are paid. However, these 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 and share units were granted from the 2010 Equity Award Plan.

A total of 173,010 stock options were issued during the 2020 first quarter on March 6, 2020.  The options have a fair value of $1.96 per share using the Black-Scholes valuation model.  The assumptions used to calculate the fair value include the price on the date of grant of $5.88 per option, an expected life of 5.2 years, expected volatility of 36.7%, an expected dividend yield of zero, and a risk free rate of 0.6%. The options vest ratably over three years, and are being expensed over that period. The options were granted from the 2010 Equity Award Plan. No stock options were granted during the 2019 first quarter.