STOCK-BASED COMPENSATION

9 Months Ended

Oct. 27, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

The following table summarizes the Company’s stock-based compensation expense (in thousands):

	Thirteen Weeks Ended				Thirty-nine Weeks Ended
	October 27, 2012		October 29, 2011		October 27, 2012		October 29, 2011
Deferred Awards	$	2,514	$	2,100	$	8,115	$	7,056
Performance Awards	935		844		2,291		1,833
Total stock-based compensation expense (1)	$	3,449	$	2,944	$	10,406	$	8,889

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(1) During the Third Quarter 2012 and Third Quarter 2011, approximately $0.4 million and $0.3 million, respectively, were included in cost of sales. During Year-To-Date 2012 and Year-To-Date 2011, approximately $1.1 million and $1.3 million, respectively, were included in cost of sales. All other stock-based compensation is included in selling, general & administrative expenses.

The Company recognized a tax benefit related to stock-based compensation expense of $4.1 million and $3.5 million for Year-To-Date 2012 and Year-To-Date 2011, respectively.

Awards Granted During Year-To-Date 2012

Pursuant to an employment agreement and amendments thereto with its Chief Executive Officer and President, the Company granted Deferred Awards of 96,768 shares of its common stock that vest over three years.  Additionally, the Company granted Deferred Awards of 100,000 shares of its common stock to its Chief Executive Officer and President that vest over three years. In addition, the Company granted Performance Awards that provide for the issuance of 100,180 Target Shares if the Company meets its operating income target for fiscal 2012, which cliff vest after two years.  The Performance Awards have a minimum threshold that would provide 50% of the Target Shares and a maximum target that would provide 200% of the Target Shares.  Depending on the final operating income, the percentage earned can be 0%, or any percentage including and between 50% and 200%.  Any earned Performance Awards cliff vest in February 2014.

Additionally, the Company granted Deferred Awards of 276,634 shares of its common stock to employees, including new hire awards, which vest ratably over three years.  The Company also granted Performance Awards to employees that provide for the issuance of 129,696 Target Shares if the Company meets its operating income target for fiscal 2012.  The Performance Awards have a minimum threshold that would provide 50% of the Target Shares and a maximum target that would provide 200% of the Target Shares.  Depending on the final operating income, the percentage earned can be 0%, or any percentage including and between 50% and 200%.  Any earned Performance Awards cliff vest after three years.

During Year-To-Date 2012, the Company granted Deferred Awards to the members of its Board of Directors, which provide for the issuance of 18,701 shares of common stock. These awards vest after one year.

Changes in the Company’s Unvested Stock Awards during the Year-To-Date 2012

Deferred Awards

	Number of Shares		Weighted Average Grant Date Fair Value
	(in thousands)
Unvested Deferred Awards, beginning of period	406		$	47.96
Granted	492		49.02
Vested	(147	)	47.35
Forfeited	(137	)	49.46
Unvested Deferred Awards, end of period	614		$	48.62

Total unrecognized stock-based compensation expense related to unvested Deferred Awards approximated $22.5 million as of October 27, 2012, which will be recognized over a weighted average period of approximately 2.2 years.

Performance Awards

	Number of Performance Shares (1)		Weighted Average Grant Date Fair Value
	(in thousands)
Unvested Performance Awards, beginning of period	6		$	46.08
Granted	230		48.51
Vested	(2	)	45.79
Forfeited	(41	)	47.67
Unvested Performance Awards, end of period	193		$	48.65

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(1) For those awards in which the performance period is complete, the number of unvested shares is based on actual shares that will vest upon completion of the service period. For those awards in which the performance period is not yet complete, the number of unvested shares is based on the participants earning their Target Shares at 100%. 

As of October 27, 2012, the Company estimates that for those awards in which the performance period is not yet complete, participants will earn 95% of their Target Shares. The cumulative expense recognized reflects changes in estimates as they occur. Total unrecognized stock-based compensation expense related to unvested Performance Awards approximated $6.4 million as of October 27, 2012, which will be recognized over a weighted average period of approximately 1.9 years.

Stock Options

At October 27, 2012, there were no unvested stock options.

Outstanding Stock Options

Changes in the Company’s outstanding stock options for Year-To-Date 2012 were as follows:

	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value
	(in thousands)				(in years)	(in thousands)
Options outstanding, beginning of period	154		$	30.98	4.2	$	2,943
Granted	—		—		—	—
Exercised	(68	)	32.08		N/A	1,339
Forfeited	(1	)	19.70		N/A	26
Options outstanding and exercisable, end of period	85		$	30.26	3.7	$	2,369