Stock-Based And Other Compensation

6 Months Ended

Jul. 02, 2011

Stock-Based And Other Compensation

Stock-Based And Other Compensation

11. Stock-Based and Other Compensation

The Company has granted nonvested restricted stock and nonqualified stock options to key employees and directors under several stock award plans.  The Company granted stock awards with an aggregate fair value of approximately $2.9 million and $2.4 million during the first six months ended July 2, 2011 and July 3, 2010, respectively. Stock based compensation is recognized on a straight-line basis over the requisite service period for each separately vesting portion of an award as if the award was, in substance, multiple awards.  The Company recognized expense of $0.5 million and $1.0 million in the three month and six month periods ended July 2, 2011, and $0.5 million and $0.9 million in three month and six month periods ended July 3, 2010, respectively, before income tax benefits, for all the Company's stock plans. 

On June 13, 2011, the Board of Directors approved an amendment to each of the Company's stock incentive plans whereby upon a reorganization transaction, including a merger, consolidation, or acquisition in which the outstanding shares of the Company are converted into cash, all outstanding unvested stock options become fully vested and immediately exercisable at the commencement of a tender offer.  All outstanding stock options not exercised as of the occurrence of a reorganization transaction shall be cancelled in exchange for payments of $33.00 in cash per option.  If a reorganization transaction does not close, the options that were unvested prior to the commencement of a tender offer would again become unvested and vest over their stated vesting schedules.   In addition, all unvested restricted stock awards granted under the Company's stock incentive plans that are outstanding immediately prior to the time of acceptance of the tender offer by Honeywell will become fully vested and transferable upon the close of that tender offer as prescribed by the Merger Agreement.