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Settlement With Former Director
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12 Months Ended |
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Dec. 29, 2013
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| Settlement With Former Director [Abstract] | |
| Settlement With Former Director Disclosure |
SETTLEMENT WITH FORMER DIRECTOR
In June 2011, the Company entered into a settlement agreement with a former director. The settlement agreement provided the Company pay the former director a settlement of $175,000 and a special dividend of approximately $53,000 on shares issued upon exercise of stock options. The settlement was paid on June 16, 2011.
Prior to the settlement being paid, the former director exercised his stock options and purchased 30,209 shares of common stock. As part of the settlement, the Company granted a one-time put option for $14.48 per share for the 30,209 shares purchased. At anytime from June 15, 2012, to August 13, 2012, the former director had the option by written notice require the Company to repurchase all or a portion of these shares at a price of $14.48 per share. The Company reviewed this arrangement and determined that the stock be considered temporary equity and classified as common stock subject to put options. The Company recorded the common stock subject to put options at fair value on the date of issuance totaling $426,000 including $70,000 recorded as settlement expense, which was reclassified from stockholders equity to temporary equity. The fair value per share of the stock at the date of the settlement agreement was determined by the most recent quarterly contemporaneous valuation performed by the board of directors. The Company accreted changes in fair value to the redemption value over the period from the date of issuance to the earliest redemption date on a straight line basis. At December 25, 2011 the recorded balance of $432,000 consisted of the aforementioned $426,000 and accretion from the date of the settlement agreement to December 25, 2011. On August 13, 2012 the put option expired and $432,000 was reclassed from temporary equity to stockholders' equity.
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