XML 61 R15.htm IDEA: XBRL DOCUMENT v2.4.0.6
Share-Based Awards
 12 Months Ended
Dec. 30, 2011
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Share-Based Awards, Purchase Plans and Compensation Cost

H. Share-Based Awards, Purchase Plans and Compensation Cost

 

Stock Option and Award Plan. The Company has a stock incentive plan under which it grants stock options and share awards to directors, officers and other employees. Option price is the market price on the date of grant. Options become exercisable at such time, generally over three or four years, and in such installments as set by the Company, and expire ten years from the date of grant.

 

Restricted share awards have been made to certain key employees under the plan. The market value of restricted stock at the date of grant is charged to operations over the vesting period. Compensation cost charged to operations for restricted share awards was $291,000 in 2011, $263,000 in 2010 and $287,000 in 2009. Individual nonemployee directors of the Company may elect to receive, either currently or deferred, all or part of their annual retainer, and/or payment for attendance at Board or Committee meetings, in the form of shares of the Company's common stock instead of cash. Under this arrangement, the Company issued 8,190 shares in 2011, 10,104 shares in 2010 and 14,952 shares in 2009. The expense related to this arrangement is not significant. The Company has a stock appreciation plan that provides for payments of cash to eligible foreign employees based on the change in the market price of the Company's common stock over a period of time. Compensation cost related to this plan was $851,000 in 2011.

 

Options on common shares granted and outstanding, as well as the weighted average exercise price, are shown below (in thousands, except per share amounts):

    Weighted   Weighted
    Average   Average
  Option Exercise Options Exercise
  Shares Price Exercisable Price
Outstanding, December 26, 2008 3,955 $ 30.77  2,186 $ 24.98
 Granted 1,180   20.74     
 Exercised (164)   10.59     
 Canceled (158)   31.57     
Outstanding, December 25, 2009 4,813   28.98  2,445   28.38
 Granted 1,201   30.66     
 Exercised (429)   14.45     
 Canceled (76)   33.04     
Outstanding, December 31, 2010 5,509   30.42  2,980   31.99
 Granted 569   43.15     
 Exercised (553)   26.19     
 Canceled (47)   35.55     
Outstanding, December 30, 2011 5,478 $ 32.12  3,211 $ 32.27

The following table summarizes information for options outstanding and exercisable at December 30, 2011 (in thousands, except per share and contractual term amounts):

    Options        
    Outstanding        
    Weighted Avg. Options   Options
    Remaining Outstanding   Exercisable
Range of OptionsContractual TermWeighted Avg. Options Weighted Avg.
Prices Outstanding in Years Exercise Price Exercisable Exercise Price
$ 16-20  261 1 $ 17.92  258 $ 17.94
$ 20-30  2,143 7   24.04  1,030   24.23
$ 30-40  1,710 6   36.52  1,121   36.55
$ 40-50  1,364 6   42.02  802   41.23
$ 16-50  5,478 6 $ 32.12  3,211 $ 32.27

The aggregate intrinsic value of exercisable option shares was $28.1 million as of December 30, 2011, with a weighted average contractual term of 4.8 years. There were approximately 5.4 million vested share options and share options expected to vest as of December 30, 2011, with an aggregate intrinsic value of $49.4 million, a weighted average exercise price of $32.10 and a weighted average contractual term of 6.1 years.

Information related to options exercised follows (in thousands):

 2011 2010 2009
Cash received$ 14,476 $ 6,203 $ 1,733
Aggregate intrinsic value  10,485   7,747   2,173
Tax benefit realized  3,500   2,800   800

Stock Purchase Plan. Under the Company's Employee Stock Purchase Plan, the purchase price of the shares is the lesser of 85 percent of the fair market value on the first day or the last day of the plan year. The Company issued 313,013 shares under this plan in 2011, 435,684 shares in 2010 and 312,424 shares in 2009.

 

Authorized Shares. Shares authorized for issuance under the stock option and purchase plans are shown below (in thousands):

   Available for Future
 Total Shares Issuance as of
 Authorized December 30, 2011
Stock Incentive Plan (2010) 5,100  4,042
Employee Stock Purchase Plan (2006) 2,000  723
Total 7,100  4,765

Amounts available for future issuance exclude outstanding options. Options outstanding as of December 30, 2011, include options granted under four plans that were replaced by subsequent plans. No shares are available for future grants under those plans.

 

Share-based Compensation. The Company recognized share-based compensation cost of $11.0 million in 2011, $10.0 million in 2010 and $9.4 million in 2009, which reduced net income by $8.4 million, or $0.14 per weighted common share in 2011, $7.4 million, or $0.12 per weighted common share in 2010 and $7.3 million, or $0.12 per weighted common share in 2009. As of December 30, 2011, there was $8.5 million of unrecognized compensation cost related to unvested options, expected to be recognized over a weighted average period of approximately two years.

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions and results:

 2011 2010 2009
Expected life in years  6.5    5.7    6.0 
Interest rate  2.8%   2.4%   2.1%
Volatility  33.7%   34.8%   30.1%
Dividend yield  2.0%   2.7%   3.7%
Weighted average fair value per share$ 13.35  $ 8.26  $ 4.27 

Expected life is estimated based on vesting terms and exercise and termination history. Interest rate is based on the U.S Treasury rate on zero-coupon issues with a remaining term equal to the expected life of the option. Expected volatility is based on historical volatility over a period commensurate with the expected life of options.

 

The fair value of employees' purchase rights under the Employee Stock Purchase Plan was estimated on the date of grant. The benefit of the 15 percent discount from the lesser of the fair market value per common share on the first day and the last day of the plan year was added to the fair value of the employees' purchase rights determined using the Black-Scholes option-pricing model with the following assumptions and results:

 2011 2010 2009
Expected life in years  1.0    1.0    1.0 
Interest rate  0.3%   0.3%   0.7%
Volatility  27.8%   42.8%   51.5%
Dividend yield  2.1%   2.9%   4.5%
Weighted average fair value per share$ 10.05  $ 8.48  $ 5.60