NOTE  K – EQUITY-BASED COMPENSATION

 

Equity-based compensation expense for fiscal years 2012, 2013, and 2014 was $10,210,  $7,624, and $9,805 respectively.  The related tax benefit for these periods was $3,554,  $2,575, and $3,308, 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 January 3, 2015.  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 January 3, 2015, a total of 6,790 awards had been granted under the 2006 Plan, of which 6,668 were stock-settled stock appreciation rights, 8 were stock options, and 114 were deferred stock units.  Also, as of January 3, 2015, a total of 1,143 awards had been forfeited and added back to the number of shares 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.  The expiration of these supplemental awards is generally within 12 months following the last vest date of such award.  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 first vest date anniversary following the final vesting of the previous award.  The expiration of these awards is generally within 12 months following the last vest date of the previous award.  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  K – 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 2012, 2013, and 2014 was $15.35,  $17.59, and $18.91, 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:

 

 

* Aggregate intrinsic value is defined as the difference between the current market value at the reporting date (the closing price of the Company's common stock on the last trading day of the period) and the exercise price of awards that were in-the-money.  The closing price of the Company's common stock at December 28, 2013, and January 3, 2015, was $77.72 and $102.28, respectively.

NOTE  K – EQUITY-BASED COMPENSATION – CONTINUED

 

The total intrinsic value of stock options and stock-settled stock appreciation rights exercised was $20,590 in 2012, $32,837 in 2013, and $51,795 in 2014.  The Company currently has no deferred stock units that are nonvested.    

 

The total fair value of equity awards that vested during fiscal years 2012, 2013, and 2014 was $10,211, $8,096, and $7,568, 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.