STOCK-BASED COMPENSATION

6 Months Ended

Jul. 02, 2011

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

NOTE 8 – STOCK-BASED COMPENSATION

The effect of recording stock-based compensation for the 13 and 26 weeks ended July 2, 2011 and July 3, 2010 was as follows:

	13 Weeks Ended						26 Weeks Ended
	July 2, 2011			July 3, 2010			July 2, 2011			July 3, 2010
Stock-based compensation expense by type of award:
Employee stock options	$	10,610		$	16,909		$	22,156		$	33,462
Non-employee director stock options		1,645			7,056			11,168			15,850
Total stock-based compensation expense	$	12,255		$	23,965		$	33,324		$	49,312
Tax effect of stock-based compensation recognized		(4,671	)		(9,155	)		(12,868	)		(18,837	)
Net effect on net loss	$	7,584		$	14,810		$	20,456		$	30,475

Excess tax benefit effect on:
Cash flows from operations	$	–		$	–		$	–		$	–
Cash flows from financing activities	$	–		$	–		$	–		$	–
Effect on loss per share:
Basic	$	0.00		$	0.00		$	0.00		$	0.00
Diluted	$	0.00		$	0.00		$	0.00		$	0.00

As of July 2, 2011, the unrecorded deferred stock-based compensation balance was $44,570 after estimated forfeitures and will be recognized over an estimated weighted average amortization period of about 1.4 years. The Company granted no options during the 13 or 26 weeks ended July 2, 2011. During the 13 weeks ended July 3, 2010, the Company granted 90,000 stock options with an estimated total grant-date fair value of $14,783 after estimated forfeitures. During the 26 weeks ended July 3, 2010, the Company granted 140,000 stock options with an estimated total grant-date fair value of $26,610 after estimated forfeitures.

Valuation Assumptions

The Company estimates the fair value of stock options using a Black-Scholes option-pricing model. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model and the straight-line attribution approach with the following weighted-average assumptions:

13 Weeks Ended

26 Weeks Ended

July 2, 2011

July 3, 2010

July 2, 2011

July 3, 2010

Risk-free interest rate

–

3.0

–

3.0

Dividend yield

–

0.0

–

0.0

Expected stock price volatility

–

Average expected life of options

–

6.0 years

–

6.3 years

Authoritative guidance issued by the FASB requires the use of option pricing models that were not developed for use in valuing employee stock options. The Black-Scholes option-pricing model was developed for use in estimating the fair value of short-lived exchange traded options that have no vesting restrictions and are fully transferable. In addition, option-pricing models require the input of highly subjective assumptions, including the option’s expected life and the price volatility of the underlying stock. Given the limited trading history of the Company’s stock, the expected stock price volatility assumption was determined using the historic volatility of a peer group of comparable logistic companies with similar attributes, including market capitalization, annual revenues, and debt leverage.

The Company uses the simplified method suggested by the SEC in authoritative guidance for determining the expected life of the options. Under this method, the Company calculates the expected term of an option grant by averaging its vesting and contractual term. The Company estimates its applicable risk-free rate based upon the yield of U.S. Treasury securities having maturities similar to the estimated term of an option grant.

Equity Incentive Program

The Company’s equity incentive program is a broad-based, long-term retention program that is intended to attract and retain qualified and experienced management, and align stockholder and employee interests. The equity incentive program presently consists of the Company’s 2007 Long-Term Incentive Equity Plan (the “Plan”). Under this Plan, non-employee directors, officers, key employees, consultants and all other employees may be granted options to purchase shares of the Company’s stock, restricted stock units and other types of equity awards. Under the equity incentive program, stock options generally have a vesting period of three years, are exercisable for a period of ten years from the date of issuance and are not granted at prices less than the fair market value of the Company’s common stock at the grant date. Options and restricted stock units may be granted with varying service-based vesting requirements. The Company settles Plan stock option exercises and restricted stock grants with newly issued common shares.

Under the Company’s 2007 Plan, 930,000 common shares are authorized for issuance through awards of options or other equity instruments. As of July 2, 2011, 383,000 common shares were available for future issuance under the 2007 Plan.

The following table summarizes the stock option plan activity for the indicated periods:

	Number of Shares			Weighted Average Exercise Price
Balance outstanding at January 1, 2011		582,000		$	0.91
26 weeks ended July 2, 2011:
Options granted		–			–
Options exercised		–			–
Options cancelled/expired/forfeited		(35,000	)		0.64
Balance outstanding at July 2, 2011		547,000		$	0.93

The options outstanding and exercisable at July 2, 2011 were in the following exercise price ranges:

	Options Outstanding						Options Exercisable
Range of Exercise Prices	Number Outstanding		Weighted Average Remaining Contractual Life-Years		Weighted Average Exercise Price		Number Vested and Exercisable		Weighted Average Exercise Price

$0.32 to $0.50		141,750		8.8	$	0.38		47,250	$	0.38
$0.56 to $0.87		355,250		7.9		0.70		179,583		0.72
$4.06		50,000		6.7		4.06		50,000		4.06
		547,000		8.0	$	0.93		276,833	$	1.26

At July 2, 2011, none of the Company’s stock options were in-the-money. At July 2, 2011, the aggregate intrinsic value of options outstanding and exercisable was $0. No options were exercised during the 13 or 26 weeks ended July 2, 2011.

The weighted average grant date fair value of options granted during the 13 and 26 weeks ended July 3, 2010 was $0.20 and $0.25, respectively.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Statement of Position (SOP)
-Number 93-6
-Paragraph 53
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 14

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 123R
-Paragraph 64, 65, A240
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 40
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 50
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901

+ Details

Clark Holdings Inc. 10-Q/A