Stock-Based Compensation

3 Months Ended

Nov. 26, 2011

Stock-Based Compensation [Abstract]

Stock-Based Compensation

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 $1,444 and $1,539 for the thirteen week periods ended November 26, 2011 and November 27, 2010, respectively. Tax benefits related to these expenses for the thirteen week periods ended November 26, 2011 and November 27, 2010 were $526 and $562, 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:

	Thirteen Weeks Ended
	November 26, 2011			November 27, 2010
Expected life (in years)		4.8			4.8
Risk-free interest rate		1.01	%		1.05	%
Expected volatility		35.2	%		35.1	%
Expected dividend yield		1.70	%		1.70	%

A summary of the Company's stock option activity for the thirteen weeks ended November 26, 2011 is as follows:

	Options			Weighted- Average Exercise Price per Share		Weighted- Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding on August 27, 2011		1,697		$	44.17
Granted		308			66.69
Exercised		(248	)		42.61
Canceled/Forfeited		(9	)		54.20
Outstanding on November 26, 2011		1,748		$	48.31		4.64	$	25,865
Exercisable on November 26, 2011		791		$	41.98		3.39	$	16,091

The weighted-average grant-date fair values of the stock options granted for the thirteen week periods ended November 26, 2011 and November 27, 2010 were $17.67 and $14.44, respectively. The total intrinsic value of options exercised during the thirteen week periods ended November 26, 2011 and November 27, 2010 were $6,447 and $13,155, respectively. The unrecognized share-based compensation cost related to stock option expense at November 26, 2011 was $12,796 and will be recognized over a weighted average period of 1.9 years.

A summary of the non-vested restricted share award activity under the Company's 2005 Omnibus Incentive Plan (the "Plan") for the thirteen weeks ended November 26, 2011 is as follows:

	Shares			Weighted- Average Grant-Date Fair Value
Non-vested restricted share awards at August 27, 2011		618		$	46.18
Granted		117			66.69
Vested		(149	)		41.04
Canceled/Forfeited		(4	)		50.66
Non-vested restricted share awards at November 26, 2011		582		$	51.57

Stock-based compensation expense recognized for the non-vested restricted share awards was $1,855 and $1,847 for the thirteen week periods ended November 26, 2011 and November 27, 2010, respectively. The unrecognized compensation cost related to non-vested restricted share awards granted under the Plan at November 26, 2011 was $21,155 and will be recognized over a weighted average period of 2.6 years.

In October 2010, the Compensation Committee of the Board of Directors of the Company approved the grant of a Restricted Stock Unit Agreement ("RSU Agreement") to the Company's Chief Executive Officer in connection with an overall approach to succession planning. The RSU Agreement covers 183 shares and provides for vesting in two installments, contingent on both performance and service conditions of the RSU Agreement. The performance condition was satisfied based on fiscal year 2011 performance. The value of each restricted stock unit is equal to the fair market value of one share of the Company's Class A Common Stock on the date of the grant. All restricted stock units that vest, including dividend equivalent units on the vested portion of the grant, will be settled in shares of the Company. For the thirteen-week period ended November 26, 2011, dividend equivalents covering 1 share were granted with a weighted average grant date fair value of $66.05. As of November 26, 2011, there were 190 unvested restricted stock units, with a weighted-average grant date fair value of $54.72 per underlying share.

Stock-based compensation expense recognized for the RSUs was $529 and $227 for the thirteen week periods ended November 26, 2011 and November 27, 2010, respectively. The unrecognized compensation cost related to the RSUs at November 26, 2011 was $7,655 and is expected to be recognized over a period of 3.8 years.