Shareholders' Equity

12 Months Ended

Jan. 02, 2016

Stockholders' Equity Note [Abstract]

Shareholders' Equity

Shareholders' Equity

Common Stock

The Company acquired and retired 180,000 shares of its common stock in the quarter ended October 3, 2015 at an average cost of $66.56 per share for a total of $12.0 million. The Company acquired and retired 500,000 shares of its common stock in the third quarter of 2014 at an average cost of $69.94 per share for a total of $35.0 million. The repurchases were under the 3.0 million share repurchase program approved by the Company's Board of Directors. There are approximately2.3 millionshares of our common stock available for repurchase under this program.

Share Based Compensation

The Company recognized approximately $13.9 million, $11.9 million and $11.4 million in share-based compensation expense in 2015, 2014 and 2013, respectively. The Company recognizes compensation expense on grants of share-based compensation awards on a straight-line basis over the vesting period of each award. As of January 2, 2016, total unrecognized compensation cost related to share-based compensation awards was approximately $24.5 million, net of estimated forfeitures, which the Company expects to recognize over a weighted average period of approximately 2.1 years.

During 2013, the Company's shareholders approved the 2013 Equity Incentive Plan ("2013 Plan"). The 2013 Plan authorizes the issuance of 3.5 million shares of common stock for equity-based awards, and terminates any further grants under prior equity plans. Approximately 2.0 million shares were available for future grant or payment under the 2013 Plan at January 2, 2016.

Options and Stock Appreciation Rights

The Company uses several forms of share-based incentive awards, including non-qualified stock options, incentive stock options, and stock settled stock appreciation rights ("SARs"). Options and SARs generally vest over 5 years and expire 10 years from the grant date. All grants are made at prices equal to the fair market value of the stock on the grant date. The majority of the Company’s annual share-based incentive awards are made in the fiscal second quarter. For both years ended January 2, 2016 and January 3, 2015, expired and canceled shares were immaterial.

The table below presents share-based compensation activity for the three fiscal years ended 2015, 2014 and 2013 (in millions):

	2015		2014		2013
Total intrinsic value of share-based incentive awards exercised	$	4.3	$	5.2	$	4.0
Cash received from stock option exercises	4.1		1.9		1.5
Income tax benefit from the exercise of stock options	1.6		2.0		0.8
Total fair value of share-based incentive awards vested	4.9		5.5		8.5

The assumptions used in the Company's Black-Scholes valuation related to grants for options and SARs were as follows:

	2015			2014			2013
Per share weighted average fair value of grants	$	27.15		$	28.01		$	23.01
Risk-free interest rate	1.9		%	2.0		%	1.1		%
Expected life (years)	7.0			7.0			7.0
Expected volatility	35.6		%	37.7		%	38.5		%
Expected dividend yield	1.2		%	1.2		%	1.2		%

The average risk-free interest rate is based on U.S. Treasury security rates in effect as of the grant date. The expected dividend yield is based on the projected annual dividend as a percentage of the estimated market value of the Company's common stock as of the grant date. The Company estimated the expected volatility using a weighted average of daily historical volatility of the Company's stock price over the expected term of the award. The Company estimated the expected term using historical data adjusted for the estimated exercise dates of unexercised awards.

Following is a summary of share-based incentive plan grant activity (options and SARs) for fiscal 2015.

Number of Shares Under Options and SARs	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (in millions)
Exercisable at January 3, 2015	1,488,832		$	59.34
Granted	206,500		78.15
Exercised	(129,366	)	43.32
Forfeited	(14,925	)	66.61
Expired	(2,775	)	71.30
Outstanding at January 2, 2016	1,548,266		$	63.09	5.7	$	5.7
Exercisable at January 2, 2016	953,347		$	57.22	4.3	5.7

Compensation expense recognized related to Options and SARs was $5.1 million for fiscal 2015.

As of January 2, 2016, there was $10.9 million of unrecognized compensation cost related to non-vested options and SARs that is expected to be recognized as a charge to earnings over a weighted average period of 3.2 years.

The amount of Options and SARs expected to vest is materially consistent with those outstanding and not yet exercisable.

Restricted Stock Awards and Restricted Stock Units

Restricted stock awards ("RSA") and restricted stock units ("RSU") consist of shares or the rights to shares of the Company's stock. The awards are restricted such that they are subject to substantial risk of forfeiture and to restrictions on their sale or other transfer. As defined in the individual grant agreements, acceleration of vesting may occur under a change in control, or death, disability or normal retirement of the grantee.

Following is a summary of RSA award activity for fiscal 2015:

	Shares		Weighted Average Fair Value at Grant Date		Weighted Average Remaining Contractual Term (years)
Unvested RSAs at January 3, 2015	24,814		$	69.53	0.3
Granted	14,400		78.15
Vested	(24,814	)	69.53
Forfeited	—		—
Unvested RSAs January 2, 2016	14,400		$	78.15	0.4

RSAs vest on either the first (for RSAs granted in 2013 and later) or the third (for RSAs granted prior to 2013) anniversary of the grant date, provided the holder of the shares is continuously employed by or in the service of the Company until the vesting date. Compensation expense recognized related to the RSA's was $1.1 million for fiscal 2015.

As of January 2, 2016, there was $0.4 million of unrecognized compensation cost related to non-vested RSA's that is expected to be recognized as a charge to earnings over a weighted average period of 0.4 years.

Following is a summary of RSU award activity for fiscal 2015:

	Shares		Weighted Average Fair Value at Grant Date		Weighted Average Remaining Contractual Term (years)
Unvested RSUs at January 3, 2015	237,946		$	68.28	1.8
Granted	106,600		77.38
Vested	(67,701	)	63.86
Forfeited	(8,190	)	71.01
Unvested RSUs at January 2, 2016	268,655		$	72.91	1.8

RSU shares vest on the third anniversary of the grant date, provided the holder of the shares is continuously employed by the Company until the vesting date. Compensation expense recognized related to the RSU's was $5.9 million for fiscal 2015.

As of January 2, 2016, there was $9.9 million of unrecognized compensation cost related to non-vested RSU's that is expected to be recognized as a charge to earnings over a weighted average period of 1.8 years.

Performance Share Units

Performance share unit ("PSU") awards consist of shares or the rights to shares of the Company's stock which are awarded to employees of the Company. These shares are payable upon the determination that the Company achieved certain established performance targets and can range from 0% to 200% of the targeted payout based on the actual results. PSU's have a performance period of 3 years. As set forth in the individual grant agreements, acceleration of vesting may occur under a change in control, death or disability. There are no voting rights with these instruments until vesting occurs and a share of stock is issued. Some of the PSU awards are valued using a Monte Carlo simulation method as of the grant date while others are valued using the closing market price as of the grant date depending on the performance criteria for the award.

Following is a summary of PSU award activity for fiscal 2015:

	Shares		Weighted Average Fair Value at Grant Date		Weighted Average Remaining Contractual Term (years)
Unvested PSUs at January 3, 2015	59,115		$	68.25	2.0
Granted	30,845		89.98
Vested	—		—
Forfeited	(2,065	)	70.97
Unvested PSUs January 2, 2016	87,895		$	75.81	1.9

Compensation expense for awards granted are recognized based on the targeted payout of 100.0%, net of estimated forfeitures. Compensation expense recognized related to PSUs was $1.8 million for fiscal 2015 and $1.0 million for fiscal 2014. Total unrecognized compensation expense for all PSUs granted as of January 2, 2016 was $3.3 million and it is expected to be recognized as a charge to earnings over a weighted average period of 1.9 years.