Stock-Based Compensation (Notes)

6 Months Ended

Jun. 29, 2013

Stock-Based Compensation

We compensate officers, directors and key employees with stock-based compensation under three stock plans approved by our shareholders in 1997, 2004 and 2010 and administered under the supervision of our Board. Compensation expense, net of estimated forfeitures, is recognized ratably over the vesting period.

Stock-based compensation expense for the three and six months ended June 29, 2013 and June 30, 2012, was as follows (in thousands):



	Three Months Ended						Six Months Ended
	June 29, 2013			June 30, 2012			June 29, 2013		June 30, 2012
Stock options	$	732		$	607		1,277		2,618
Stock awards	828			798			715		5,752
Total stock-based compensation expense⁽¹⁾	1,560			1,405			1,992		8,370
Income tax benefit	(537		)	(482		)	(685	)	(2,871	)
Total stock-based compensation expense, net of tax	$	1,023		$	923		1,307		5,499

⁽¹⁾ Includes $(0.4) million and $5.6 million of CEO transition (benefit) costs for the six months ended June 29, 2013 and June 30, 2012, respectively. There were no CEO transition (benefit) costs for the three months ended June 29, 2013 or June 30, 2012.

CEO Transition Costs

In February 2012, we announced that William R. McLaughlin, then President and Chief Executive Officer would retire from the Company effective June 1, 2012. In recognition of Mr. McLaughlin’s contributions, the Compensation Committee approved the modification of Mr. McLaughlin’s currently unvested stock awards, including performance-based stock awards. The performance-based stock awards are subject to applicable performance adjustments through 2014 based on free cash flow and actual market share growth versus performance targets. During the six months ended June 30, 2012, we incurred $5.6 million ($3.7 million, net of income tax) of non-recurring, non-cash expenses associated with these stock award modifications. During the six months ended June 29, 2013, we recorded a non-cash compensation benefit of $0.4 million ($0.3 million, net of income tax) resulting from performance-based stock award adjustments. There were no CEO transition (benefits) costs for the three months ended June 29, 2013 or June 30, 2012.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

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