NOTE – EQUITY-BASED COMPENSATION

 

Equity-based compensation expense for fiscal years 2011, 2012, and 2013 was $10,549,  $10,210, and $7,624, respectively.  The related tax benefit for these periods was $3,852,  $3,554, and $2,575, respectively. 

 

The following table shows the remaining unrecognized compensation expense on a pre-tax basis for all types of unvested equity awards outstanding as of December 28, 2012.  This table does not include an estimate for future grants that may be issued.

 

 

 

 

 

The Company’s 2006 Equity Incentive Award Plan (the “2006 Plan”) is currently the only plan under which equity awards are issued.  This plan allows for the grant of various equity awards, including stock-settled stock appreciation rights, stock options, deferred stock units, and other types of equity-based awards, to the Company’s officers, key employees, and non-employee directors. 

 

Since its inception 10,000 shares have been authorized under the 2006 Plan.  As of December 28, 2013, a total of 6,004 awards had been granted under the 2006 Plan, of which 5,882 were stock-settled stock appreciation rights, 8 were stock options, and 114 were deferred stock units.  Also, as of December 28, 2013, a total of 1,043 awards had been canceled and added back to the number of units available for issuance under the 2006 Plan.

 

The Company’s Compensation Committee utilizes two types of vesting methods when granting awards to officers and key employees under the 2006 Plan based upon the nature of the grant.  Awards granted to officers and key employees upon hire or promotion to such a position will generally vest 20% each year on the anniversary of the grant date and expire five and one-half years from the date of grant.  Awards granted as a supplement to existing equity awards held by officers and key employees will generally vest 50% each year beginning on the first grant date anniversary following the final vesting of previous grants.  These supplemental awards typically expire five and one-half years from the date of grant.  Awards of stock options and stock-settled stock appreciation rights to be granted to non-employee directors will generally vest 25% each quarter, commencing on the last day of the fiscal quarter in which the awards are granted, and will expire five years to five and one-half years from the date of grant.  Awards of deferred stock units are full-value shares at the date of grant, vesting over the periods of service, and do not have expiration dates.

 

 

 

 

 

 

 

 

 

 

NOTE – EQUITY-BASED COMPENSATION – CONTINUED

 

The Company uses the Black-Scholes option pricing model to estimate the fair value of its equity awards.  The weighted-average fair value of stock-settled stock appreciation rights that were granted in 2011, 2012, and 2013 was $12.40,  $15.35, and $17.59, respectively.  Following is a table that includes the weighted-average assumptions that the Company used to calculate fair value of equity awards that were granted during the periods indicated.  Deferred stock units are full-value shares at the date of grant and have been excluded from the table below.

 

 

A summary of the Company’s stock option and stock-settled stock appreciation right activity is as follows:

 

 

 

The total intrinsic value of stock options and stock-settled stock appreciation rights exercised was $925 in 2011, $20,590 in 2012, and $32,837 in 2013.  The Company currently has no deferred stock units that are considered nonvested.    

 

The total fair value of equity awards that vested during fiscal years 2011, 2012, and 2013 was $10,993, $10,211, and $8,096, respectively.  This total fair value includes equity-based awards issued in the form of stock options, stock-settled stock appreciation rights, and deferred stock units.