Note 7 - Shareholders' Equity | 9 Months Ended |
Sep. 29, 2013 |
Stockholders' Equity Note [Abstract] | ' |
Stockholders' Equity Note Disclosure [Text Block] | ' |
7. | SHAREHOLDERS’ EQUITY | | | | | | | | | | | | |
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a. | Common Stock | | | | | | | | | | | | |
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In August 2013, we issued 15,272 shares of common stock to our non-employee directors, valued at $57. |
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In 2012, we issued to our non-employee directors 16,271 shares of common stock valued at $76, 17,473 shares of common stock valued at $77, and 24,311 shares of common stock valued at $77, in February, May, and August, respectively. |
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b. | Treasury Stock | | | | | | | | | | | | |
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At September 29, 2013 and December 31, 2012, we had 1,372,757 shares of treasury stock valued at $7,658. |
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c. | Stock Options | | | | | | | | | | | | |
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We have various stock-based employee compensation plans, for which we follow the provisions of the Financial Accounting Standards Board’s (“FASB”) guidance on share-based payments, which requires that compensation cost relating to share-based payment transactions be recognized in the financial statements. The cost is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the employee’s requisite service period (generally the vesting period of the equity award). |
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Our shareholders have approved various equity-based plans that permit the grant of stock options, restricted stock and other equity-based awards. In addition, our shareholders have approved certain grants of stock options outside of these plans. |
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In June 2004, shareholders adopted the 2004 Long-Term Incentive Plan (“LTIP”) pursuant to which we were authorized to issue up to 750,000 shares of common stock and grant stock options, restricted stock awards, stock appreciation rights and other stock-based awards. Through shareholder approved amendments to the LTIP in 2006, 2008 and 2011, the total number of authorized shares under the LTIP increased to 2,900,000. |
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Stock options granted under the LTIP are either Incentive Stock Options (“ISOs”) or Non-Qualified Stock Options (“NQSOs”). Key employees are eligible to receive ISOs and NQSOs; however, directors and consultants are eligible to receive only NQSOs. Most ISOs vest over a three- or five-year period and expire on the sixth or seventh anniversary of the grant date. All NQSOs issued to non-employee directors vest immediately and expire on either the sixth or seventh anniversary of the grant date. Some NQSOs issued to non-employees vest immediately and expire within three years; others have the same vesting characteristics as options issued to employees. As of September 29, 2013, there were 2,096,422 stock options outstanding under the LTIP. |
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On December 19, 2005, we granted our former President and Chief Executive Officer, John D. Kavazanjian, an option to purchase 48,000 shares of common stock at $12.96 per share outside of any of our equity-based compensation plans, subject to shareholder approval. Shareholder approval was obtained on June 8, 2006. The stock option is fully vested and expired on June 8, 2013. |
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On March 7, 2008, in connection with his becoming employed by us, we granted our Chief Financial Officer and Treasurer, Philip A. Fain, an option to purchase 50,000 shares of common stock at $12.74 per share outside of any of our equity-based compensation plans. The stock option is fully vested and expires on March 7, 2015. |
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On December 30, 2010, pursuant to the terms of his employment agreement, we granted our President and Chief Executive Officer, Michael D. Popielec, options to purchase shares of common stock under the LTIP as follows: (i) 50,000 shares at $6.42, vesting in annual increments of 12,500 shares over a four-year period commencing December 30, 2011; (ii) 250,000 shares at $6.42, vesting in annual increments of 62,500 shares over a four-year period commencing December 30, 2011; (iii) 200,000 shares at $10.00, with vesting to begin on the date the stock reaches a closing price of $10.00 per share for 15 trading days within a 30-day trading period, with such vesting in annual increments of 50,000 shares over the four anniversary dates of that date; and (iv) 200,000 shares at $15.00, with vesting to begin on the date the stock reaches a closing price of $15.00 per share for 15 trading days within a 30-day trading period, with such vesting in annual increments of 50,000 shares over the four anniversary dates of that date. All such options in items (i) and (ii) shall expire on December 30, 2017. All such options in items (iii) and (iv) shall expire as of the later of December 30, 2017 or five years after the initial vesting commences, but in no event later than December 30, 2020. The options set forth in items (ii), (iii) and (iv) were subject to shareholder approval of an amendment to the LTIP, which approval was obtained on June 7, 2011. |
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On January 3, 2011, pursuant to the terms of his employment agreement, we granted our President and Chief Executive Officer, Michael D. Popielec, an option to purchase 50,000 shares of common stock at $6.58 under the LTIP. The option vests in annual increments of 12,500 shares over a four-year period commencing December 30, 2011. The option expires on December 30, 2017. |
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In conjunction with FASB’s guidance for share-based payments, we recorded compensation cost related to stock options of $131 and $521 for the three and nine month periods ended September 29, 2013 and $254 and $770 for the three and nine month periods ended September 30, 2012, respectively. As of September 29, 2013, there was $833 of total unrecognized compensation cost related to outstanding stock options, which is expected to be recognized over a weighted average period of 1.50 years. |
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We use the Black-Scholes option-pricing model to estimate the fair value of non-market performance stock-based awards. The following weighted average assumptions were used to value non-market performance stock options granted during the nine month periods ended September 29, 2013 and September 30, 2012. |
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| | Nine Month Periods Ended | | | | | | |
| | September 29, | | | September 30, | | | | | | |
2013 | 2012 | | | | | |
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Risk-free interest rate | | | 0.78 | % | | | 0.56 | % | | | | | |
Volatility factor | | | 61.94 | % | | | 63.53 | % | | | | | |
Dividends | | | 0 | % | | | 0 | % | | | | | |
Weighted average expected life (years) | | | 4.06 | | | | 3.91 | | | | | | |
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We use a Monte Carlo simulation option-pricing model to estimate the fair value of market performance stock-based awards. There were no market performance stock options granted during the nine months ended September 29, 2013 and September 29, 2012. |
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We calculate expected volatility for stock options by taking an average of historical volatility over the past five years and a computation of implied volatility. The computation of expected term was determined based on historical experience of similar awards, giving consideration to the contractual terms of the stock-based awards and vesting schedules. The interest rate for periods within the contractual life of the award is based on the U.S. Treasury yield in effect at the time of grant. |
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Stock option activity for the first nine months of 2013 is summarized as: |
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| | | | | Weighted | | Weighted | | | |
| Average | Average | Aggregate |
Number | Exercise Price | Remaining | Intrinsic |
of Shares | Per Share | Contractual | Value |
| | Term (Years) | |
| | | | | | | | | | |
Shares under option at January 1, 2013 | | | 2,211,488 | | | $ | 7.47 | | | | | |
Options granted | | | 228,000 | | | | 3.6 | | | | | |
Options exercised | | | (3,000 | ) | | | 3.91 | | | | | |
Options forfeited | | | (114,348 | ) | | | 3.51 | | | | | |
Options expired | | | (175,718 | ) | | | 10.8 | | | | | |
Shares under option at September 29, 2013 | | | 2,146,422 | | | $ | 7 | | 4.57 | | $ | 134 | |
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Vested and expected to vest as of September 29, 2013 | | | 1,944,424 | | | $ | 7.22 | | 4.5 | | $ | 109 | |
Options exercisable at September 29, 2013 | | | 991,953 | | | $ | 6.52 | | 3.48 | | $ | 44 | |
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The total intrinsic value of stock options (which is the amount by which the stock price exceeded the exercise price of the options on the date of exercise) exercised during the nine month period ended September 29, 2013 was $1. |
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FASB’s guidance for share-based payments requires cash flows from excess tax benefits to be classified as a part of cash flows from financing activities. Excess tax benefits are realized tax benefits from tax deductions for exercised stock options in excess of the deferred tax asset attributable to stock compensation costs for such stock options. We did not record any excess tax benefits in the first nine months of 2013 and 2012. Cash received from stock option exercises under our stock-based compensation plans for the nine month periods ended September 29, 2013 and September 30, 2012 was $12 and $115, respectively. |
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d. | Restricted Stock Units | | | | | | | | | | | | |
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On January 29, 2013, we granted 120,000 contingent restricted stock units to our President and Chief Executive Officer, Michael D. Popielec, subject to shareholder approval, which was obtained on June 4, 2013, which vest as follows: (i) 30,000 shares of our common stock will vest on the later of January 1, 2014 or the date when our common stock first reaches a closing price of $4.00 per share for 15 trading days in a 30 trading day period; (ii) 30,000 shares of our common stock will vest on the later of January 1, 2014 or the date when our common stock first reaches a closing price of $5.00 per share for 15 trading days in a 30 trading day period; (iii) 30,000 shares of our common stock will vest on the later of January 1, 2015 or the date when our common stock first reaches a closing price of $4.00 per share for 15 trading days in a 30 trading day period; and (iv) 30,000 shares of our common stock will vest on the later of January 1, 2015 or the date when our common stock first reaches a closing price of $5.00 per share for 15 trading days in a 30 trading day period. |
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The restricted stock units described in (i) and (iii) had achieved their closing price condition prior to shareholder approval and were valued at the closing price on the date of grant. The restricted stock units described in (ii) and (iv) had not yet achieved their closing price conditions and were valued utilizing a Monte Carlo simulation to determine fair value and the derived service period. The weighted average inputs utilized were: |
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| | Nine Month | | | | | | | | | | |
Period Ended | | | | | | | | | |
September 29, | | | | | | | | | |
2013 | | | | | | | | | |
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Risk-free interest rate | | | 0.21 | % | | | | | | | | | |
Volatility factor | | | 59.08 | % | | | | | | | | | |
Dividends | | | 0 | % | | | | | | | | | |
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The restricted stock units had the following values: |
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| | Nine Month | | | | | | | | | | |
Period Ended | | | | | | | | | |
September 29, | | | | | | | | | |
2013 | | | | | | | | | |
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Number of shares award | | | 120,000 | | | | | | | | | | |
Weighted average fair value per share | | $ | 3.62 | | | | | | | | | | |
Aggregate total value | | $ | 434 | | | | | | | | | | |
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The activity of restricted stock units for the first nine months of 2013 is summarized below: |
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| | Number of | | | Weighted Average | | | | | | |
Shares | Grant Date Fair Value | | | | | |
Unvested at January 1, 2013 | | | 0 | | | $ | 0 | | | | | | |
Granted | | | 120,000 | | | $ | 3.62 | | | | | | |
Vested | | | 0 | | | | 0 | | | | | | |
Forfeited | | | 0 | | | | 0 | | | | | | |
Unvested at September 29, 2013 | | | 120,000 | | | $ | 3.62 | | | | | | |
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No restricted stock was awarded during the nine month period ended September 30, 2012. |
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Compensation cost recorded in our financial statements related to our restricted stock units and restricted stock awards was $122 and $162 during the three and nine month periods ended September 29, 2013, respectively, and $0 and $1 during the three and nine month periods ended September 30, 2012, respectively. There is $278 of unrecognized compensation cost related to restricted stock units as of September 29, 2013. |
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