Stock-Based Awards

As of December 30, 2018, the Company was authorized to grant stock-based compensation under its 2010 Incentive Compensation Plan (the “2010 Incentive Plan”), which became effective April 27, 2010, and was amended and restated effective April 30, 2014. The 2010 Incentive Plan replaced the 1991 Executive Stock Incentive Plan (the “1991 Incentive Plan”). In addition, through April 30, 2014, the Company maintained its 2004 Non-Employee Directors’ Stock Incentive Plan (the “2004 Directors’ Plan”).

The Company’s long-term incentive compensation program provides executives the opportunity to earn cash and shares of Class A Common Stock at the end of three-year performance cycles based in part on the achievement of financial goals tied to a financial metric and in part on stock price performance relative to companies in the Standard & Poor’s 500 Stock Index, with the majority of the target award to be settled in the Company’s Class A Common Stock. In addition, the Company grants time-vested restricted stock units annually to a number of employees. These are settled in shares of Class A Common Stock.

We have outstanding stock-settled long-term performance awards, restricted stock units and stock options (together, “Stock-Based Awards”). We recognize stock-based compensation expense for outstanding stock-settled long-term performance awards, restricted stock units and stock appreciation rights. Stock-based compensation expense was $13.0 million in 2018, $14.8 million in 2017 and $12.4 million in 2016.

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. Awards under the 1991 Incentive Plan and 2010 Incentive Plan generally vest over a stated vesting period or, with respect to awards granted prior to December 28, 2014, upon the retirement of an employee or director, as the case may be.

Each non-employee director of the Company receives an annual grant of restricted stock units under the 2010 Incentive Plan. Restricted stock units are awarded on the date of the annual meeting of stockholders and vest on the date of the subsequent year’s annual meeting, with the shares to be delivered upon a director’s cessation of membership on the Board of Directors. Each non-employee director is credited with additional restricted stock units with a value equal to the amount of all dividends paid on the Company’s Class A Common Stock. The Company’s directors are considered employees for purposes of stock-based compensation.

Stock Options

The 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 fair market value (as defined in each plan, respectively) of our Class A Common Stock on the date of grant. Stock options were generally granted with a 3-year vesting period and a 10-year term and vest in equal annual installments. Due to a change in the Company’s long-term incentive compensation, no grants of stock options have been made since 2012.

The 2004 Directors’ Plan provided for grants of stock options to non-employee directors at an exercise price equal to the fair market value (as defined in the 2004 Directors’ Plan) of our Class A Common Stock on the date of grant. Prior to 2012, stock options were granted with a 1-year vesting period and a 10-year term. No grants of stock options have been made since 2012. The Company’s directors are considered employees for purposes of stock-based compensation.

Changes in our Company’s stock options in 2018 were as follows:



	December 30, 2018
(Shares in thousands)	Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value $(000s)
Options outstanding at beginning of year	3,774		$	15	2	$	17,597
Exercised	(2,327	)	18
Forfeited/Expired	(59	)	20
Options outstanding at end of period⁽¹⁾	1,388		$	9	2	$	18,052
Options exercisable at end of period	1,388		$	9	2	$	18,052

⁽¹⁾ All outstanding options are vested as of December 30, 2018.

The total intrinsic value for stock options exercised was $12.3 million in 2018, $7.0 million in 2017 and $0.7 million in 2016.

Restricted Stock Units

The 2010 Incentive Plan provides for grants of other stock-based awards, including restricted stock units.

Outstanding stock-settled restricted stock units have been granted with a stated vesting period up to 5 years. Each restricted stock unit represents our obligation to deliver to the holder one share of Class A Common Stock upon vesting. The fair value of stock-settled restricted stock units is the average market price on the grant date. Changes in our Company’s stock-settled restricted stock units in 2018 were as follows:



	December 30, 2018
(Shares in thousands)	Restricted Stock Units		Weighted Average Grant-Date Fair Value
Unvested stock-settled restricted stock units at beginning of period	886		$	15
Granted	319		25
Vested	(510	)	14
Forfeited	(72	)	18
Unvested stock-settled restricted stock units at end of period	623		$	20
Unvested stock-settled restricted stock units expected to vest at end of period	587		$	20

The intrinsic value of stock-settled restricted stock units vested was $12.4 million in 2018, $7.9 million in 2017 and $7.3 million in 2016.

Long-Term Incentive Compensation

The 2010 Incentive Plan provides for grants of cash and stock-settled awards to key executives payable at the end of a multi-year performance period.

Cash-settled awards have been granted with three-year performance periods and are based on the achievement of specified financial performance measures. Cash-settled awards have been classified as a liability in our Consolidated Balance Sheets. There were payments of approximately $3 million in 2018, $3 million in 2017 and $4 million in 2016.

Stock-settled awards have been granted with three-year performance periods and are based on relative Total Shareholder Return (“TSR”), which is calculated at stock appreciation plus deemed reinvested dividends, and another performance measure. Stock-settled awards are payable in Class A Common Stock and are classified within equity. The fair value of TSR awards is determined at the date of grant using a Monte Carlo simulation model. The fair value of awards under the other performance measure is determined by the average market price on the grant date.

Unrecognized Compensation Expense

As of December 30, 2018, unrecognized compensation expense related to the unvested portion of our Stock-Based Awards was approximately $13 million and is expected to be recognized over a weighted-average period of 1.45 years.

Reserved Shares

We generally issue shares for the exercise of stock options and vesting of stock-settled restricted stock units from unissued reserved shares.

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



(Shares in thousands)	December 30, 2018	December 31, 2017
Stock options, stock–settled restricted stock units and stock-settled performance awards
Stock options and stock-settled restricted stock units	2,165	4,772
Stock-settled performance awards⁽¹⁾	2,009	2,559
Outstanding	4,174	7,331
Available	7,404	7,188
Employee Stock Purchase Plan⁽²⁾
Available	6,410	6,410
401(k) Company stock match⁽³⁾
Available	3,045	3,045
Total Outstanding	4,174	7,331
Total Available	16,859	16,643


⁽¹⁾	The number of shares actually earned at the end of the multi-year performance period will vary, based on actual performance, from 0% to 200% of the target number of performance awards granted. The maximum number of shares that could be issued is included in the table above.


⁽²⁾	We have not had an offering under the Employee Stock Purchase Plan since 2010.


⁽³⁾	Effective 2014, we no longer offer a Company stock match under the Company’s 401(k) plan.