SHARE-BASED COMPENSATION

Performance Units

In Q1 2015, we awarded 305,512 performance units ("PSUs") to our executive officers. Of the PSUs awarded, 152,756 units are earned after a three-year performance period, from 2015 through 2017, based on our total shareholder return relative to a comparison group of companies, which is a market condition, and, if earned, will be issued in the form of shares of Class A Common Stock. The number of shares that may be earned can range from 0% to 200% of the target amount; therefore, the maximum number of shares that can be issued under this award is 305,512. These PSUs are expensed and recorded in Additional paid-in capital on the Condensed Consolidated Balance Sheets over the performance period. We used the Monte Carlo simulation model to calculate the fair value of these PSUs on the date of grant. The model resulted in a weighted average grant date fair value of $23.25 per unit for these PSUs, compared to $15.50 and $11.92 per unit for PSUs granted in 2014 and 2013, respectively.

The weighted average grant date fair values were determined using the following assumptions:



	2015 Awards		2014 Awards		2013 Awards
Three-year risk-free interest rate (1)	0.7	%	0.3	%	0.5	%
Expected term	3 years		3 years		3 years
Estimated volatility (2)	42.2	%	44.7	%	49.8	%

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(1)	Based on the U.S. government bond benchmark on the grant date.


(2)	Represents the historical price volatility of the Company’s common stock for the three-year period preceding the grant date.

The remaining 152,756 PSUs awarded during Q1 2015 are earned after a three-year performance period, from 2015 through 2017, based on our three-year average return on invested capital, which is a performance condition, and, if earned, will be issued in the form of shares of Class A Common Stock. The number of shares that may be earned can range from 0% to 200% of the target amount, therefore the maximum number of shares that can be issued under this award is 305,512. These units are expensed and recorded in Additional paid-in capital on the Condensed Consolidated Balance Sheets over the performance periods based on the probability that the performance condition will be met. The expense recorded will be adjusted as the estimate of the total number of PSUs that will ultimately be earned changes. The weighted average grant date fair value of these PSUs was $16.69. The fair value is equal to the closing stock price on the date of grant.

For all PSUs awarded in Q1 2015, dividend equivalents are calculated based on the actual number of shares earned at the end of the performance period equal to the dividends that would have been payable on the earned shares had they been held during the entire performance period as Class A Common Stock. At the end of the performance period, the dividend equivalents are paid in the form of cash or Class A Common Stock at the discretion of the Board of Directors. In addition, these awards will be forfeited if the participant leaves the Company for reasons other than retirement, disability or death or if the participant engages in any competition with us, as defined in the plan and determined by the Administrative Committee in its discretion. If a change in control occurs at least six months following the award date, the target awards will be deemed to be earned and a pro rata number of units will be vested and paid based upon the length of time within the performance period which has elapsed prior to the effective date of the change in control.

The total PSU expense and associated tax benefit for all outstanding awards for the three months ended May 30, 2014 and May 24, 2013 are as follows:



	Three Months Ended
Performance Units	May 30, 2014		May 24, 2013
Expense	$	2.6	$	5.2
Tax benefit	1.0		2.0

The PSU activity for the three months ended May 30, 2014 is as follows:



Maximum Number of Shares That May Be Issued Under Nonvested Units	Total	Weighted-Average Grant Date Fair Value per Unit
Nonvested as of February 28, 2014	1,833,288	$	14.04
Granted	611,024	19.97
Nonvested as of May 30, 2014	2,444,312	$	14.65

As of May 30, 2014, there was $7.5 of remaining unrecognized compensation cost related to nonvested PSUs, which is expected to be recognized over a remaining weighted-average period of 1.7 years.

Restricted Stock Units

During the three months ended May 30, 2014, we awarded 709,518 restricted stock units ("RSUs"), of which 130,181 were awarded to our executive officers. These RSUs have restrictions on transfer which lapse three years after the date of grant, at which time the units will be issued as unrestricted shares of Class A Common Stock. Holders of RSUs receive cash dividends equal to the dividends we declare and pay on our Class A Common Stock, which are included in Dividends paid on the Condensed Consolidated Statements of Cash Flows. These awards are subject to forfeiture if a participant leaves our company for reasons other than retirement, disability, death or termination by us without cause prior to the vesting date. RSUs are expensed and recorded in Additional paid-in capital on the Condensed Consolidated Balance Sheets over the requisite service period based on the value of the underlying shares on the date of grant.

The RSU expense and associated tax benefit for all outstanding awards for the three months ended May 30, 2014 and May 24, 2013 are as follows:



	Three Months Ended
Restricted Stock Units	May 30, 2014		May 24, 2013
Expense	$	6.7	$	5.6
Tax benefit	2.4		2.0

The RSU activity for the three months ended May 30, 2014 is as follows:



Nonvested Units	Total		Weighted-Average Grant Date Fair Value per Unit
Nonvested as of February 28, 2014	2,001,758		$	11.71
Granted	709,518		16.63
Vested	(215,589	)	14.61
Forfeited	(14,769	)	13.23
Nonvested as of May 30, 2014	2,480,918		$	13.18

As of May 30, 2014, there was $13.6 of remaining unrecognized compensation cost related to nonvested RSUs, which is expected to be recognized over a weighted-average period of 2.3 years.