Stock-Based Compensation

3 Months Ended

Apr. 01, 2017

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

STOCK-BASED COMPENSATION

The Company accounts for stock-based compensation in accordance with the fair value recognition provisions of FASB ASC Topic 718, Compensation – Stock Compensation (“ASC 718”). The Company recognized compensation expense of $7.7 million and related income tax benefits of $2.6 million for grants under its stock-based compensation plans for the quarter ended April 1, 2017. The Company recognized compensation expense of $7.6 million and related income tax benefits of $2.6 million for grants under its stock-based compensation plans for the quarter ended March 26, 2016.

During the quarter ended April 1, 2017, the Company did not grant any employee stock options. During the quarter ended March 26, 2016, the Company granted 2,204,609 employee stock options with an estimated weighted average grant date fair value of $3.27. The Company estimated the fair value of the options on the date of grant using the Black-Scholes-Merton model with the following weighted average assumptions:



	12 Weeks Ended March 26, 2016
Expected market price volatility ⁽¹⁾	27.1	%
Risk-free interest rate ⁽²⁾	1.0	%
Dividend yield ⁽³⁾	1.4	%
Expected term ⁽⁴⁾	4 years


⁽¹⁾	Based on historical volatility of the Company’s common stock. The expected volatility is based on the daily percentage change in the price of the stock over the four years prior to the grant.


⁽²⁾	Represents the U.S. Treasury yield curve in effect for the expected term of the option at the time of grant.


⁽³⁾	Represents the Company’s estimated cash dividend yield for the expected term.


⁽⁴⁾	Represents the period of time that options granted are expected to be outstanding. As part of the determination of the expected term, the Company concluded that all employee groups exhibit similar exercise and post-vesting termination behavior.

During the quarter ended April 1, 2017, the Company issued 730,081 restricted awards at a weighted average grant date fair value of $22.92 per award. During the quarter ended March 26, 2016, the Company issued 976,815 restricted awards at a weighted average grant date fair value of $16.50 per award.

During the quarter ended April 1, 2017, the Company issued 488,918 performance awards at a weighted average grant date fair value of $25.02 per award. During the quarter ended March 26, 2016, the Company issued 973,219 performance awards at a weighted average grant date fair value of $16.51 per award.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

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