Stock-Based Compensation

6 Months Ended

Feb. 25, 2012

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 $1,475 and $1,457 for the thirteen week periods ended February 25, 2012 and February 26, 2011, respectively and $2,919 and $2,995 for the twenty-six week periods ended February 25, 2012 and February 26, 2011. Tax benefits related to these expenses for the thirteen week periods ended February 25, 2012 and February 26, 2011 were $542 and $522, respectively, and for the twenty-six week periods ended February 25, 2012 and February 26, 2011 were $1,068 and $1,095, 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:

	Twenty-Six Weeks Ended
	February 25, 2012			February 26, 2011
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 twenty-six weeks ended February 25, 2012 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		(408	)		41.16
Canceled		(76	)		49.60
Outstanding on February 25, 2012		1,521		$	49.27		4.59	$	46,120
Exercisable on February 25, 2012		634		$	42.79		3.37	$	23,321

The weighted-average grant-date fair values of the stock options granted for the twenty-six week periods ended February 25, 2012 and February 26, 2011 were $17.67 and $14.48, respectively. The unrecognized share-based compensation cost related to stock option expense at February 25, 2012 was $10,542 and will be recognized over a weighted average period of 1.82 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 twenty-six week periods ended February 25, 2012 and February 26, 2011 were $12,143 and $18,187, respectively.

A summary of the non-vested restricted share award activity under the Company's 2005 Omnibus Incentive Plan (the "Plan") for the twenty-six weeks ended February 25, 2012 is as follows:

	Shares			Weighted- Average Grant-Date Fair Value
Non-vested restricted share awards at August 27, 2011		618		$	46.18
Granted		132			67.44
Vested		(160	)		41.41
Canceled/Forfeited		(32	)		47.91
Non-vested restricted share awards at February 25, 2012		558		$	52.47

Stock-based compensation expense recognized for the restricted share awards was $1,738 and $1,748 for the thirteen week periods ended February 25, 2012 and February 26, 2011, respectively, and $3,593 and $3,606 for the twenty-six week periods ended February 25, 2012 and February 26, 2011, respectively. The unrecognized compensation cost related to restricted share awards granted under the Plan at February 25, 2012 was $19,573 and will be recognized over a weighted average period of 2.44 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 twenty-six week period ended February 25, 2012, dividend equivalents covering 1 share were granted with a weighted average grant date fair value of $71.03. As of February 25, 2012, there were 191 unvested restricted stock units, with a weighted-average grant date fair value of $54.79 per underlying share.

Stock-based compensation expense recognized for the RSUs was $530 and $529 for the thirteen week periods ended February 25, 2012 and February 26, 2011, respectively, and $1,059 and $756 for the twenty-six week periods ended February 25, 2012 and February 26, 2011, respectively. The unrecognized compensation cost related to the RSUs at February 25, 2012 was $7,126 and is expected to be recognized over a period of 3.58 years.