STOCK-BASED COMPENSATION

9 Months Ended

Sep. 26, 2014

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

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

We record stock-based compensation expense for restricted and unrestricted stock awards, performance share units, stock options, and shares purchased under an employee stock purchase plan.

Our 2005 Long-Term Equity Incentive Plan, as amended and restated effective May 2013 ("Incentive Plan"), provides for the issuance or delivery of up to 7.95 million shares of our common stock over the full term of the Incentive Plan.

Restricted and unrestricted stock and performance share units

Under the Incentive Plan, restricted stock is granted to executive officers and key employees and vests annually over three or four years. Unrestricted stock granted to our board of directors vests immediately. Restricted and unrestricted stock-based compensation expense is calculated based on the grant-date market value. We recognize compensation expense on a straight-line basis over the vesting period, net of estimated forfeitures.

Performance share units have been granted to executive officers and certain key employees. Vesting of the performance share units is contingent upon the achievement of revenue and/or profitability growth goals at the end of each three year performance period. Each performance share unit is equivalent to one share of common stock. Compensation expense is calculated based on the grant-date market value of our stock and is recognized ratably over the performance period for the performance share units which are expected to vest. Our estimate of the performance units expected to vest is reviewed and adjusted as appropriate each quarter.

Restricted and unrestricted stock and performance share units activity for the thirty-nine weeks endedSeptember 26, 2014 was as follows (shares in thousands):

	Shares		Weighted- average grant-date price
Non-vested at beginning of period	1,544		$	16.66
Granted	515		$	26.11
Vested	(414	)	$	17.78
Forfeited	(39	)	$	18.58
Non-vested at the end of the period	1,606		$	19.35

As of September 26, 2014, total unrecognized stock-based compensation expense related to non-vested restricted stock was approximately $12.7 million, of which $11.1 million is estimated to be recognized over a weighted average period of 1.81 years. As of September 26, 2014, total unrecognized stock-based compensation expense related to performance share units, assuming achievement of maximum financial goals, was approximately $8.0 million, of which $4.5 million is estimated to be recognized over a weighted average period of 1.76 years.

Stock options

Our Incentive Plan provides for both nonqualified stock options and incentive stock options (collectively, “stock options”) for directors, officers, and certain employees. We issue new shares of common stock upon exercise of stock options. All of our stock options are vested and expire if not exercised within seven to ten years from the date of grant. Stock option activity was de minimis for the thirteen and thirty-nine weeks ended September 26, 2014.

Employee stock purchase plan

Our Employee Stock Purchase Plan (“ESPP”) reserves for purchase 1.0 million shares of common stock. The plan allows eligible employees to contribute up to 10% of their earnings toward the monthly purchase of the Company's common stock. The employee's purchase price is the lesser of 85% of the fair market value of shares on either the first day or the last day of each month. We consider our ESPP to be a component of our stock-based compensation and accordingly we recognize compensation expense over the requisite service period for stock purchases made under the plan. The requisite service period begins on the enrollment date and ends on the purchase date, the duration of which is one month.

During the thirty-nine weeks endedSeptember 26, 2014 and September 27, 2013, participants purchased 45,000 and 54,000 shares from the plan, for cash proceeds of $1.0 million and $0.9 million, respectively.

Stock-based compensation expense

Total stock-based compensation expense was $3.9 million and $8.9 million for the thirteen and thirty-nine weeks endedSeptember 26, 2014 and $1.8 million and $6.4 million for the thirteen and thirty-nine weeks endedSeptember 27, 2013, respectively.