Quarterly report pursuant to Section 13 or 15(d)

Equity-Based Compensation

v2.4.0.8
Equity-Based Compensation
 9 Months Ended
Sep. 27, 2014
Equity-Based Compensation [Abstract]  
Equity-Based Compensation

NOTE  I — EQUITY BASED COMPENSATION

The Company utilizes a share-based compensation plan, which is more fully described in Note K to the Consolidated Financial Statements in Form 10-K for the year ended December 28, 2013. 

 

Equity-based compensation expense for the fiscal quarters ended September 28, 2013, and September 27, 2014, was $1,686, and $1,858 respectively.  The related tax benefit for these periods was $578, and $613, respectively. Expense for the nine months ended September 28, 2013, and September 27, 2014, was $6,113 and $5,929, respectively.  The related tax benefit for these periods was $2,087 and $1,973, 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 September 27, 2014.  This table does not include an estimate for future grants that may be issued.

 

 

 

 

 

 

 

 

2014

 

$          2,388

2015

 
7,388 

2016

 
5,622 

2017

 
3,516 

2018+

 
724 

 

 

$        19,638

 

 

 

The cost above is expected to be recognized over a weighted-average

 

 

period of 2.0 years.

 

 

 

 

 

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 during the nine months ended September 28, 2013, and September 27, 2014, was $16.01 and $17.92, 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.

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended

 

 

September 28,

 

September 27,

 

 

2013

 

2014

 

 

 

 

 

Expected volatility (1)

 
42.5% 

 
40.0% 

Risk-free interest rate (2)

 
0.7% 

 
1.2% 

Expected life (3)

 

3.95 yrs

 

3.55 yrs

Expected dividend yield (4)

 
0.0% 

 
0.0% 

Weighted-average exercise price (5)

 
$
48.26 

 
$
58.04 

 

 

 

 

 

(1) The Company utilizes historical volatility of the trading price of its common stock.

(2) Risk-free interest rate is based on the U.S. Treasury yield curve with respect to the expected life of

the award.

 

 

 

 

(3) Depending upon the terms of the award, one of two methods will be used to calculate expected life: (i)

a weighted-average that includes historical settlement data of the Company’s equity awards and a

hypothetical holding period, or (ii) the simplified method.

(4) The Company historically has not paid dividends.

(5) Exercise price is the closing price of the Company's common stock on the date of grant.

 

 

 

 

 

 

 

 

 

 

 

NOTE  I — EQUITY BASED COMPENSATION - CONTINUED

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares

 

Weighted-average exercise price

 

Weighted-average remaining contractual term

 

Aggregate intrinsic value*

 

Outstanding at December 28, 2013

 
1,827 

 

$          37.37

 
2.6 

 

$        74,160

 

Granted

 
711 

 
58.04 

 

 

 

 

 

Exercised

 
(434)

 
32.33 

 

 

 

 

 

Forfeited

 
(48)

 
37.25 

 

 

 

 

 

Expired

 

 -

 

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding at September 27, 2014

 
2,056 

 

$          45.58

 
2.7 

 

$        54,978

 

 

 

 

 

 

 

 

 

 

 

Exercisable at September 27, 2014

 
526 

 

$          38.37

 
1.4 

 

$        17,743

 

 

 

 

 

 

 

 

 

 

 

* 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 September 27, 2014, was $77.72 and $71.98, respectively.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The total intrinsic value of stock options and stock-settled stock appreciation rights exercised during the nine months ended September 28, 2013, and September 27, 2014, was $31,027 and $17,125, respectively.       

 

The total fair value of equity awards that vested during the nine months ended September 28, 2013, and September 27, 2014, was $6,789 and $6,559, respectively.  This total fair value includes equity-based awards issued in the form of stock options and stock-settled stock appreciation rights.