Note 3. Stock-Based Compensation

The Company accounts for all share-based payments in accordance with ASC Topic 718, "Compensation—Stock Compensation" ("ASC 718"). The stock‑based compensation expense related to the stock option plans and the Associate Stock Purchase Plan included in operating expenses was $1,103 and $1,230 for the thirteen week periods ended May 30, 2015 and May 31, 2014, respectively, and $3,951 and $4,426 for the thirty-nine week periods ended May 30, 2015 and May 31, 2014, respectively. Tax benefits related to these expenses for the thirteen week periods ended May 30, 2015 and May 31, 2014 were $391 and $440, respectively, and for the thirty-nine week periods ended May 30, 2015 and May 31, 2014 were $1,406 and $1,603, respectively.

The fair value of each option grant is estimated on the date of grant using the Black‑Scholes option pricing model with the following assumptions:



		Thirty-Nine Weeks Ended
		May 30,			May 31,
		2015			2014
Expected life (in years)		3.9			3.9
Risk-free interest rate		1.09	%		0.93	%
Expected volatility		24.49	%		26.59	%
Expected dividend yield		1.70	%		1.70	%
Weighted-average grant-date fair value	$	14.06		$	14.98

A summary of the Company’s stock option activity for the thirty-nine week period ended May 30, 2015 is as follows:



	Options	Weighted-Average Exercise Price per Share		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding on August 30, 2014	1,186	$	68.24
Granted	421		83.01
Exercised	(140)		63.29
Canceled/Forfeited	(60)		78.46
Outstanding on May 30, 2015	1,407	$	72.72	4.68	$	4,960
Exercisable on May 30, 2015	561	$	62.74	3.32	$	4,811

The unrecognized share‑based compensation cost related to stock option expense at May 30, 2015 was $8,582 and will be recognized over a weighted average period of 1.8 years. The total intrinsic value of options exercised, which represents the difference between the exercise price and market value of common stock measured at each individual exercise date, during the thirty-nine week periods ended May 30, 2015 and May 31, 2014 was $2,466 and $11,623, respectively.

A summary of the non‑vested restricted share award (“RSA”) activity under the Company’s 2005 Omnibus Incentive Plan and 2015 Omnibus Incentive Plan for the thirty-nine weeks ended May 30, 2015 is as follows:



	Shares	Weighted-Average Grant-Date Fair Value
Non-vested restricted share awards at August 30, 2014	428	$	68.67
Granted	126		82.33
Vested	(133)		60.48
Canceled/Forfeited	(14)		76.13
Non-vested restricted share awards at May 30, 2015	407	$	75.42

The fair value of each RSA is the closing stock price on the New York Stock Exchange of the Company’s Class A common stock on the date of grant. Upon vesting, a portion of the RSA award may be withheld to satisfy the minimum statutory withholding taxes. The remaining RSAs will be settled in shares of the Company’s Class A common stock after the vesting period. Stock‑based compensation expense recognized for the RSAs was $1,852 and $1,979 for the thirteen week periods ended May 30, 2015 and May 31, 2014, respectively, and $6,381 and $6,969 for the thirty-nine week periods ended May 30, 2015 and May 31, 2014, respectively. The unrecognized compensation cost related to RSAs at May 30, 2015 was $17,810 and will be recognized over a weighted average period of 2.3 years.

A summary of the Company’s non-vested Restricted Stock Unit (“RSU”) award activity for the thirty-nine weeks ended May 30, 2015 is as follows:



	Shares		Weighted- Average Grant- Date Fair Value
Non-vested restricted stock unit awards at August 30, 2014	184	$	54.65
Granted	1		83.03
Vested	(123)		54.60
Canceled/Forfeited	—		—
Non-vested restricted stock unit awards at May 30, 2015	62	$	55.09

The fair value of each RSU is the closing stock price on the New York Stock Exchange of the Company’s Class A common stock on the date of grant. Upon vesting, a portion of the RSU award may be withheld to satisfy the minimum statutory withholding taxes. The remaining RSUs will be settled in shares of the Company’s Class A common stock after the vesting period. These awards accrue dividend equivalents on outstanding units (in the form of additional stock units) based on dividends declared on the Company’s Class A common stock and these dividend equivalents convert to unrestricted common stock at the conclusion of the vesting period. The dividend equivalents are not included in the RSU table above. Stock‑based compensation expense recognized for the RSUs was $142 and $544 for the thirteen week periods ended May 30, 2015 and May 31, 2014, respectively, and $967 and $1,625 for the thirty-nine week periods ended May 30, 2015 and May 31, 2014, respectively. The unrecognized compensation cost related to the RSUs at May 30, 2015 was $922 and is expected to be recognized over a weighted average period of 1.7 years.