Stock Options and Other Share-Based Compensation

3 Months Ended

Sep. 27, 2013

Stock Options and Other Share-Based Compensation [Abstract]

Stock Options and Other Share-Based Compensation

Note C— Stock Options and Other Share-Based Compensation

During the quarter ended September 27, 2013, we had two shareholder-approved employee stock incentive plans (“SIPs”)under which options or other share-based compensation was outstanding, and we had the following types of share-based awards outstanding under our SIPs: stock options, performance share awards, performance share unit awards, restricted stock awards and restricted stock unit awards. We believe that such awards more closely align the interests of employees with those of shareholders. Certain share-based awards provide for accelerated vesting if there is a change in control (as defined under our SIPs). The compensation cost related to our share-based awards that was charged against income was $8.4 million for the quarter ended September 27, 2013and $6.0 million for the quarter ended September 28, 2012.

Grants to employees under our SIPs during the quarter ended September 27, 2013 consisted of 1,373,700 stock options, 305,650 performance share unit awards and 190,600 restricted stock unit awards. The fair value as of the grant date of each option award was determined using the Black-Scholes-Merton option-pricing model which used the following assumptions: expected dividend yield of 2.80 percent; expected volatility of 30.65 percent; risk-free interest rates averaging1.66 percent; and expected term in years of 5.10. The fair value as of the grant date of each performance share unit award was determinedbased on a fair value from a multifactor Monte Carlo valuation model that simulates our stock price and total shareholder return (“TSR”) relative to other companies in our TSR peer group, less a discount to reflect the delay in payments of cash dividend-equivalents that are made only upon vesting.