Stock-Based Compensation

9 Months Ended

May 26, 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 $1,391 and $1,446 for the thirteen week periods ended May 26, 2012 and May 28, 2011, respectively and $4,310 and $4,441 for the thirty-nine week periods ended May 26, 2012 and May 28, 2011. Tax benefits related to these expenses for the thirteen week periods ended May 26, 2012 and May 28, 2011 were $501 and $530, respectively, and for the thirty-nine week periods ended May 26, 2012 and May 28, 2011 were $1,569 and $1,625, 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 26, 2012			May 28, 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 thirty-nine weeks ended May 26, 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		(472	)		41.41
Canceled		(82	)		49.95
Outstanding on May 26, 2012		1,451		$	49.52		4.37	$	33,607
Exercisable on May 26, 2012		571		$	42.76		3.05	$	17,086

The weighted-average grant-date fair values of the stock options granted for the thirty-nine week periods ended May 26, 2012 and May 28, 2011 were $17.67 and $14.48, respectively. The unrecognized share-based compensation cost related to stock option expense at May 26, 2012 was $9,169 and will be recognized over a weighted average period of 1.70 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 26, 2012 and May 28, 2011 were $14,445 and $27,443, respectively.

A summary of the non-vested restricted share award activity under the Company's 2005 Omnibus Incentive Plan (the "Plan") for the thirty-nine weeks ended May 26, 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		(162	)		41.52
Canceled/Forfeited		(42	)		48.88
Non-vested restricted share awards at May 26, 2012		546		$	52.49

Stock-based compensation expense recognized for the restricted share awards was $1,919 and $1,724 for the thirteen week periods ended May 26, 2012 and May 28, 2011, respectively, and $5,512 and $5,330 for the thirty-nine week periods ended May 26, 2012 and May 28, 2011, respectively. The unrecognized compensation cost related to restricted share awards granted under the Plan at May 26, 2012 was $17,500 and will be recognized over a weighted average period of 2.27 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 thirty-nine week period ended May 26, 2012, dividend equivalents covering 2 shares were granted with a weighted average grant date fair value of $71.84. As of May 26, 2012, there were 191 unvested restricted stock units outstanding, with a weighted-average grant date fair value of $54.86 per underlying share.

Stock-based compensation expense recognized for the RSUs was $529 and $530 for the thirteen week periods ended May 26, 2012 and May 28, 2011, respectively, and $1,588 and $1,286 for the thirty-nine week periods ended May 26, 2012 and May 28, 2011, respectively. The unrecognized compensation cost related to the RSUs at May 26, 2012 was $6,597 and is expected to be recognized over a period of 3.35 years.