PLANS AND STOCK BASED COMPENSATION

We have share-based compensation plans under which employees and non-employee directors may be granted share based awards. During 2013, 2012 and 2011, the primary share-based awards and their general terms and conditions are as follows:


•	Stock options, which entitle the holder to purchase a specified number of shares of common stock at an exercise price equal to the closing market price of our common stock on the date of grant; vest incrementally, typically over 3 to 4 years; and generally expire 7 to 10 years from date of grant.


•	Restricted stock grants, which entitle the holder to receive at no cost, a specified number of shares of common stock that vests incrementally, typically over 3 to 4 years. Recipients are entitled to cash dividends and to vote their respective shares upon grant.


•	Performance based stock awards, which entitle the holder to receive at no cost, a specified number of shares of common stock within a range of shares from zero to a specified maximum. Payout of this award is contingent upon achievement of targeted earnings per share with certain defined adjustments and our relative stock price market performance.

At the Annual Meeting of Shareholders held on May 8, 2007, our shareholders approved the 2007 Incentive Plan (2007 Plan). The 2007 Plan was subsequently amended in 2009, 2011 and 2013, and in each case the amendments were approved by our shareholders at the respective annual meeting of shareholders. The 2007 Plan provides that effective upon approval, no further awards will be granted under preexisting stock option and incentive plans; provided, however, that any shares that have been forfeited or canceled in accordance with the terms of the applicable award under a preexisting plan may be subsequently awarded in accordance with the terms of the preexisting plan. The 2007 Plan allows a maximum of 18.7 million shares to be awarded of which restricted stock grants and performance based stock awards count as 2.3 shares and stock options count as one share. In the past, we had various employee stock and incentive plans under which stock options and other share-based awards were granted. Stock options and other share-based awards that were granted under prior plans and were outstanding on May 8, 2007, continue in accordance with the terms of the respective plans.

At December 28, 2013, approximately 9.0 million shares were authorized for future grants under our share-based compensation plans. We settle employee share-based compensation awards with newly issued shares. The estimated fair value of our stock-based awards, less expected forfeitures, is amortized over the awards' vesting period on a straight-line basis. The following table presents stock-based compensation included in our consolidated statement of income:



	December 28, 2013			December 29, 2012			December 31, 2011
Stock-based compensation expense in:
Cost of sales	$	5,381		$	5,470		$	5,983
Selling and administration	19,161			16,385			15,723
Income from continuing operations, before income taxes	24,542			21,855			21,706
Provision for income taxes	(8,658		)	(7,793		)	(7,784		)
Net income attributable to common shareholders	$	15,884		$	14,062		$	13,922

We capitalized no stock-based compensation related costs for the years ended 2013, 2012 and 2011.

The fair value of stock-based awards granted during 2013, 2012 and 2011 was estimated on the grant date using the Black-Scholes option-pricing model with the following weighted-average assumptions:



	December 28, 2013			December 29, 2012			December 31, 2011
Expected life (in years)	4.2			4.5			4.2
Expected volatility	33		%	35		%	33		%
Risk-free interest rate	0.80		%	0.84		%	2.21		%
Expected dividend yield	0		%	0		%	0		%
Weighted—average grant date fair value	$	11.17		$	10.94		$	11.32

Stock Options

The following table summarizes stock option activities under our plans:



	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value
Options outstanding as of December 29, 2012	5,860,403		$	39.11
Options granted	600,249		$	40.63
Options exercised	(2,557,744	)	$	36.68
Options canceled	(134,175	)	$	44.73
Options outstanding as of December 28, 2013	3,768,733		$	40.81
Options exercisable as of December 28, 2013	2,188,734		$	42.63	2.12	$	26,039

As of December 28, 2013, the unrecognized compensation cost related to 1,564,777 unvested stock options expected to vest was $10,589. This unrecognized compensation will be recognized over an estimated weighted-average amortization period of 27.4 months.

The total intrinsic value of options exercised during the fiscal years ending December 28, 2013, December 29, 2012 and December 31, 2011 was $24,737, $5,135 and $7,950, respectively, with intrinsic value defined as the difference between the market price on the date of exercise and the grant date price. The total amount of cash received from the exercise of options during 2013 was $93,789. The actual tax benefit realized for the tax deductions from option exercises totaled $8,983 for the year ended December 28, 2013.

The following table summarizes significant ranges of outstanding and exercisable options as of December 28, 2013:



	Options Outstanding						Options Exercisable
Range of Exercise Prices	Number Outstanding	Weighted Average Remaining Contractual Life (In years)	Weighted Average Exercise Price		Aggregate Intrinsic Value		Options Exercisable	Weighted Average Remaining Contractual Life (In years)	Weighted Average Exercise Price		Aggregate Intrinsic Value
$20.01–$30.00	370,567	2.15	25.62		10,269		368,762	2.14	25.60		10,224
$30.01–$40.00	1,674,154	4.10	36.82		27,639		680,617	3.76	36.71		11,312
$40.01–$50.00	1,225,667	3.54	43.64		11,873		641,010	1.14	46.39		4,449
$50.01–$60.00	463,105	1.11	58.17		54		463,105	1.11	58.17		54
$60.01–$70.00	35,240	1.28	62.78		—		35,240	1.28	62.78		—
Totals	3,768,733	3.33	$	40.80	$	49,835	2,188,734	2.12	$	42.63	$	26,039

The aggregate intrinsic value in the preceding table represents the total intrinsic value, based on a closing stock price of $53.33 as of December 28, 2013, that would have been received by the option holders had all option holders exercised their options as of that date. The total number of in-the-money options exercisable as of December 28, 2013 was 1,709,189.

The following table summarizes the non-vested stock option activity in the equity incentive plans for the fiscal year ending December 28, 2013:



	Non-vested Stock Options		Weighted Average Exercise Price
December 29, 2012	1,989,722		$	34.91
Granted	600,249		40.63
Forfeited	(41,901	)	36.98
Vested	(968,071	)	32.90
December 28, 2013	1,579,999		$	38.26

Restricted Stock

Stock compensation expense associated with restricted common stock is charged for the market value on the date of grant, less estimated forfeitures, and is amortized over the awards' vesting period on a straight-line basis.

The following table summarizes the restricted stock activity for 2013:



	Restricted Stock		Weighted Average Grant Date Fair Value
Outstanding as of December 29, 2012	934,505		$	35.83
Granted	571,499		40.60
Vested	(373,548	)	40.41
Canceled	(35,906	)	45.32
Outstanding as of December 28, 2013	1,096,550		$	36.44

As of December 28, 2013, the unrecognized compensation cost related to shares of unvested restricted stock expected to vest was $28,313. This unrecognized compensation will be recognized over an estimated weighted-average amortization period of 29.7 months. The total fair value of restricted stock grants that vested during the fiscal years ending December 28, 2013, December 29, 2012 and December 31, 2011 was $15,095, $10,385 and $10,989, respectively. The actual tax benefit realized for the tax deductions from restricted stock grants that vested totaled $5,372 for the year ended December 28, 2013.

Performance Based Stock Award Program

In February 2013, we granted 163,847 performance-based stock awards ("Performance Share Units", or "PSUs") to certain executive officers. The PSUs will be paid out in our common stock based upon the results of two metrics: (1) performance based on our earnings per share with certain defined adjustments and (2) our relative stock price market performance based on a 3-year relative Total Shareholder Return calculation. Accordingly, the actual total number of our shares into which the granted PSUs will convert can range from zero shares to 327,694 shares. The PSUs will be fully vested in December 2015 and will be paid out in the form of our common stock in the first quarter of 2016.

Compensation expense associated these awards, along with performance-based awards made in prior years, was $2,171, $(28) and $188 for the years ended December 28, 2013, December 29, 2012 and December 31, 2011, respectively.