Stock-Based Compensation

6 Months Ended

Mar. 02, 2013

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 $1,329 and $1,475 for the thirteen week periods ended March 2, 2013 and February 25, 2012, respectively and $2,768 and $2,919 for the twenty-six week periods ended March 2, 2013 and February 25, 2012, respectively. Tax benefits related to these expenses for the thirteen week periods ended March 2, 2013 and February 25, 2012 were $480 and $542, respectively, and for the twenty-six week periods ended March 2, 2013 and February 25, 2012 were $1,004 and $1,068, 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
	March 2, 2013			February 25, 2012
Expected life (in years)		3.8			4.8
Risk-free interest rate		0.55	%		1.01	%
Expected volatility		32.86	%		35.20	%
Expected dividend yield		1.70	%		1.70	%

A summary of the Company's stock option activity for the twenty-six weeks ended March 2, 2013 is as follows:

	Options			Weighted- Average Exercise Price per Share		Weighted- Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding on September 1, 2012		1,377		$	49.79
Granted		359			69.52
Exercised		(384	)		41.37
Canceled		(4	)		62.43
Outstanding on March 2, 2013		1,348		$	57.41		4.84	$	37,753
Exercisable on March 2, 2013		505		$	48.62		3.55	$	18,575

The weighted-average grant-date fair values of the stock options granted for the twenty-six week periods ended March 2, 2013 and February 25, 2012 were $15.33 and $17.67, respectively. The unrecognized share-based compensation cost related to stock option expense at March 2, 2013 was $10,524 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 twenty-six week periods ended March 2, 2013 and February 25, 2012 were $12,356 and $12,143, 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 March 2, 2013 is as follows:

	Shares			Weighted- Average Grant-Date Fair Value
Non-vested restricted share awards at September 1, 2012		535		$	52.37
Granted		136			70.11
Vested		(157	)		45.12
Canceled/Forfeited		(6	)		55.92
Non-vested restricted share awards at March 2, 2013		508		$	59.31

Stock-based compensation expense recognized for the restricted share awards was $1,992 and $1,738 for the thirteen week periods ended March 2, 2013 and February 25, 2012, respectively, and $4,277 and $3,593 for the twenty-six week periods ended March 2, 2013 and February 25, 2012, respectively. The unrecognized compensation cost related to restricted share awards granted under the Plan at March 2, 2013 was $19,696 and will be recognized over a weighted average period of 2.4 years.

In October 2010, the Compensation Committee of the Board of Directors of the Company approved the grant of a Restricted Stock Unit Award ("RSU Award") to the Company's former Chief Executive Officer in connection with an overall approach to succession planning.  The RSU Award covers 183 restricted share units that accrue dividend equivalent units, and provides for vesting in two installments, contingent on both performance and service conditions of the RSU Award.  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 March 2, 2013, dividend equivalents covering 2 shares were earned with a weighted average grant date fair value of $72.26.   As of March 2, 2013, there were 194 unvested restricted stock units outstanding, with a weighted-average grant date fair value of $55.05 per underlying share.

Stock-based compensation expense recognized for the restricted stock units was $529 and $530 for the thirteen week periods ended March 2, 2013 and February 25, 2012, respectively, and $1,059 for the twenty-six week periods ended March 2, 2013 and February 25, 2012. The unrecognized compensation cost related to the restricted stock units at March 2, 2013 was $4,968 and is expected to be recognized over a period of 2.7 years.