Stock-Based Awards

Under our Company’s 1991 Executive Stock Incentive Plan (the “1991 Incentive Plan”) and our 1991 Executive Cash Bonus Plan (together, the “1991 Executive Plans”), the Board of Directors was authorized to grant awards to key employees of cash, restricted and unrestricted shares of our Common Stock, retirement units (stock equivalents) or such other awards as the Board of Directors deemed appropriate. Effective April 27, 2010, our 2010 Incentive Compensation Plan (the “2010 Incentive Plan”) was approved by our Company’s stockholders and replaced the 1991 Executive Plans.

Our 2004 Non-Employee Directors’ Stock Incentive Plan (the “2004 Directors’ Plan”) provides for the issuance of up to 500,000 shares of Common Stock in the form of stock options or restricted stock awards. Under our 2004 Directors’ Plan, each non-employee director of our Company has historically received annual grants of non-qualified stock options with 10-year terms to purchase 4,000 shares of Common Stock from our Company at the average market price of such shares on the date of grant. Restricted stock has not been awarded under the 2004 Directors’ Plan for the purpose of stock-based compensation.

We recognize stock-based compensation expense for outstanding stock options, cash-settled restricted stock units, stock-settled restricted stock units, stock appreciation rights, Common Stock under our ESPP and LTIP awards (together, “Stock-Based Awards”). Stock-based compensation expense was $8.5 million in 2011, $8.4 million in 2010 and $20.4 million in 2009.

Stock-based compensation expense is recognized over the period from the date of grant to the date when the award is no longer contingent on the employee providing additional service. Our Company’s 1991 Incentive Plan, 2010 Incentive Plan and 2004 Directors’ Plan provide that awards generally vest over a stated vesting period or upon the retirement of an employee or director, as the case may be.

Our pool of excess tax benefits (“APIC Pool”) available to absorb tax deficiencies was approximately $22 million as of December 25, 2011.

Stock Options and Stock Appreciation Rights

Our Company’s 1991 Incentive Plan provided, and the 2010 Incentive Plan provides, for grants of both incentive and non-qualified stock options at an exercise price equal to the market value of our Common Stock on the date of grant. Stock options have generally been granted with a 3-year vesting period and a 10-year term and vest in equal annual installments.

Our 2004 Directors’ Plan provides for grants of stock options to non-employee Directors at an exercise price equal to the market value of our Common Stock on the date of grant. Stock options are granted with a 1-year vesting period and a 10-year term. Our Company’s Directors are considered employees for this purpose.

During 2009, we discovered that portions of previously awarded stock option grants exceeded that permitted to be granted to a single individual during any calendar year under the terms of our Company’s plans. A total of 250,000 options in 2008 and 200,000 options in 2009 granted in excess of applicable plan limits were determined to be null and void. The independent directors of our Company’s Board of Directors, after consultation with all non-management directors, approved the grant of deferred payment stock appreciation rights equal in number and on the same economic terms comparable to the void options. Stock appreciation rights are classified as liability awards because we incur a liability, payable in cash, based on the fair value of the stock appreciation rights. These rights are measured at their fair value at the end of each reporting period utilizing the Black-Scholes valuation model and, therefore, will fluctuate based on the changes in our stock price.

Changes in our Company’s stock options in 2011 were as follows:



	December 25, 2011
(Shares in thousands)	Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value $(000s)
Options outstanding at beginning of year	21,414		$	33	4	$	10,629
Granted	856		10
Exercised	(100	)	4
Forfeited/Expired	(4,670	)	41
Options outstanding at end of period	17,500		$	30	4	$	6,522
Options expected to vest at end of period	17,478		$	30	4	$	6,522
Options exercisable at end of period	15,207		$	33	3	$	4,262

The total intrinsic value for stock options exercised was $0.6 million in 2011, $1.7 million in 2010 and $0.5 million in 2009.

The fair value of the stock options granted was estimated on the date of grant using a Black-Scholes valuation model that uses the assumptions noted in the following table. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant. The expected life (estimated period of time outstanding) of stock options granted was determined using the average of the vesting period and term, an acceptable method. Expected volatility was based on historical volatility for a period equal to the stock option’s expected life, ending on the date of grant, and calculated on a monthly basis. The fair value for stock options granted with different vesting periods are calculated separately.



	December 25, 2011						December 26, 2010						December 27, 2009
Term (In years)	10			10			10			10			10			10
Vesting (In years)	3			1			3			1			3			1
Risk-free interest rate	2.90		%	2.25		%	3.19		%	2.69		%	2.72		%	2.45		%
Expected life (In years)	6			5			6			5			6			5
Expected volatility	43.79		%	47.93		%	41.60		%	45.93		%	31.01		%	35.00		%
Expected dividend yield	0		%	0		%	0		%	0		%	0		%	0		%
Weighted-average fair value	$	4.81		$	3.78		$	4.99		$	4.68		$	1.29		$	1.71

Restricted Stock Units

Our 1991 Incentive Plan provided, and the 2010 Incentive Plan provides, for grants of other awards, including restricted stock units. Restricted stock units granted in 2010 and 2009 are “cash-settled,” while restricted stock units granted in 2011 are “stock-settled.” For “stock-settled” restricted stock units, each restricted stock unit represents our obligation to deliver to the holder one share of Common Stock upon vesting. For “cash-settled” restricted stock units, each restricted stock unit represents our obligation to deliver to the holder cash, equivalent to the market value of the underlying shares of Common Stock, upon vesting.

In 2011, we granted stock-settled restricted stock units with a 3-year vesting period. The fair value of “stock-settled” restricted stock units is the average market price at date of grant.

Changes in our Company’s stock-settled restricted stock units in 2011 were as follows:



	December 25, 2011
(Shares in thousands)	Restricted Stock Units		Weighted Average Grant-Date Fair Value
Unvested stock-settled restricted stock units at beginning of period	355		$	22
Granted	677		10
Vested	(345	)	21
Forfeited	(21	)	16
Unvested stock-settled restricted stock units at end of period	666		$	11
Unvested stock-settled restricted stock units expected to vest at end of period	607		$	11

The intrinsic value of stock-settled restricted stock units vested was $3.3 million in 2011, $3.3 million in 2010 and $0.5 million in 2009.

In 2010 and 2009, we granted cash-settled restricted stock units with a 3-year vesting period. The fair value of “cash-settled” restricted stock units is the average market price at date of grant. “Cash-settled” restricted stock units are classified as liability awards because we incur a liability, payable in cash, based on our stock price. The cash-settled restricted stock unit is measured at its fair value at the end of each reporting period and, therefore, will fluctuate based on the fluctuations in our stock price.

Changes in our cash-settled restricted stock units in 2011 were as follows:



	December 25, 2011
(Shares in thousands)	Restricted Stock Units		Weighted Average Grant-Date Fair Value
Unvested cash-settled restricted stock units at beginning of period	788		$	6
Granted	—		—
Vested	(9	)	7
Forfeited	(21	)	6
Unvested cash-settled restricted stock units at end of period	758		$	6
Unvested cash-settled restricted stock units expected to vest at end of period	735		$	6

The intrinsic value of restricted stock units vested was $80,000 in 2011, $0.3 million in 2010 and $0.1 million in 2009.

LTIP Awards

Our Company’s 1991 Executive Plans provided for grants of cash awards to key executives payable at the end of a multi-year performance period. The target awards were determined at the beginning of each period and could have increased to a maximum of 175% of the target or decreased to 0%.

For the award granted for the cycle beginning in 2005 paid in 2010, the total payment was based on a key performance measure, Total Shareholder Return (“TSR”), which was calculated as stock appreciation plus reinvested dividends. For the award granted for the cycle beginning in 2006 paid in 2011, 50% of the payment was based on TSR. The payment was subject to approval by the Board’s Compensation Committee. There were payments of approximately $4 million in 2011 and $7 million in 2010. No cycle was payable in 2009.

The LTIP awards based on TSR were classified as liability awards because we incurred a liability, payable in cash, indexed to our stock price. The LTIP award liability was measured at its fair value at the end of each reporting period and, therefore, fluctuated based on the operating results and the performance of our TSR relative to the peer group’s TSR. The fair value of the LTIP awards was calculated by comparing our TSR against a predetermined peer group’s TSR over the performance period. The payout of the LTIP awards was based on relative performance; therefore, correlations in stock price performance among the peer group companies also factored into the valuation.

For awards granted for the cycle beginning in 2007 and subsequent periods, the actual payment, if any, do not have a performance measure based on TSR. Therefore, these awards are not considered stock-based compensation.

As of December 25, 2011, unrecognized compensation expense related to the unvested portion of our Stock-Based Awards was approximately $4 million and is expected to be recognized over a weighted-average period of 1.4 years.

We generally issue shares for the exercise of stock options, stock-settled restricted stock units granted in 2011 and shares under our Employee Stock Purchase Plan from unissued reserved shares and issue shares for stock-settled restricted stock units granted prior to 2011 and our Company stock match under a 401(k) plan from treasury shares.

Shares of Class A Common Stock reserved for issuance were as follows:



(In thousands)	December 25, 2011	December 26, 2010
Stock options, stock–settled restricted stock units, retirement units and other awards
Outstanding	18,166	21,769
Available	6,771	8,252
Employee Stock Purchase Plan
Available	6,410	7,013
401(k) Company stock match
Available	3,838	4,619
Total Outstanding	18,166	21,769
Total Available	17,019	19,884

In addition to the shares available in the table above, there were approximately 819,000 shares as of December 25, 2011 and December 26, 2010 of Class B Common Stock available for conversion into shares of Class A Common Stock.