Quarterly report pursuant to Section 13 or 15(d)

Equity-Based Compensation

v2.4.1.9
Equity-Based Compensation
 3 Months Ended
Apr. 04, 2015
Equity-Based Compensation [Abstract]  
Equity-Based Compensation

NOTE  G — 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 January 3, 2015. 

 

Equity-based compensation expense for the three months ended March 29, 2014, and April 4, 2015, was $1,836, and $2,210 respectively.  The related tax benefit for these periods was $617, and $740, 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 April 4, 2015.  This table does not include an estimate for future grants that may be issued.

 

 

 

 

 

 

 

 

2015

 

$          5,664

2016

 
6,771 

2017

 
4,484 

2018

 
1,561 

2019+

 
510 

 

 

$        18,990

 

 

 

The cost above is expected to be recognized over a weighted-average period of 1.9 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 three months ended March 29, 2014, and April 4, 2015, was $17.73 and $30.49, 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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

 

 

 

 

 

 

March 29,

 

April 4,

 

 

 

2014

 

2015

 

 

 

 

 

 

 

Expected volatility (1)

 
39.9% 

 
40.4% 

 

Risk-free interest rate (2)

 
1.2% 

 
1.1% 

 

Expected life (3)

 

3.54 yrs.

 

3.30 yrs.

 

Expected dividend yield (4)

 
0.0% 

 
0.0% 

 

Weighted-average exercise price (5)

 
$
57.62 

 
$
102.10 

 

 

 

 

 

 

 

(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  G — 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 January 3, 2015

 
1,555 

 

$          49.20

 
2.9 

 

$        82,564

 

Granted

 
110 

 
102.10 

 

 

 

 

 

Exercised

 
(55)

 
41.60 

 

 

 

 

 

Forfeited

 
(19)

 
43.83 

 

 

 

 

 

Expired

 

 -

 

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding at April 4, 2015

 
1,591 

 

$          53.18

 
2.7 

 

$        97,095

 

 

 

 

 

 

 

 

 

 

 

Exercisable at April 4, 2015

 
66 

 

$          39.25

 
2.3 

 

$          4,954

 

 

 

 

 

 

 

 

 

 

 

 

 

*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 January 3, 2015, and April 4, 2015, was $102.28 and $114.19, respectively.

 

The total intrinsic value of stock-settled stock appreciation rights exercised during the three months ended March 29, 2014, and April 4, 2015, was $6,800 and $3,345, respectively.       

 

The total fair value of equity awards that vested during the three months ended March 29, 2014, and April 4, 2015, was $496 and $811, respectively.  This total fair value includes equity-based awards issued in the form of stock-settled stock appreciation rights.