Shareholders' Equity

9 Months Ended

Oct. 01, 2011

Shareholders' Equity [Abstract]

Shareholders' Equity

10. SHAREHOLDERS' EQUITY

The Company recognized approximately $4.0 million and $1.9 million in share-based compensation expense for the three month period ended October 1, 2011 and October 2, 2010, respectively. Share-based compensation expense for the nine month period ended October 1, 2011 and October 2, 2010 was $10.2 million and $5.0 million, respectively. The total excess income tax benefit recognized relating to share-based compensation for the nine months ended October 1, 2011 and October 2, 2010 was approximately $1.0 million and $1.6 million, 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 October 1, 2011, total unrecognized compensation cost related to share-based compensation awards was approximately $21.2 million, net of estimated forfeitures, which the Company expects to recognize over a weighted average period of approximately 2.9 years.

The Company was authorized as of October 1, 2011 to deliver up to 5.0 million shares of common stock upon exercise of non-qualified stock options or incentive stock options, or upon grant or in payment of stock appreciation rights, and restricted stock. Approximately 1.4 million shares were available for future grant or payment under the various plans at October 1, 2011.

Share-based Incentive Awards

The Company uses several forms of share-based incentive awards, including non-qualified stock options, incentive stock options, and stock appreciation rights ("SARs"). All grants are made at prices equal to the fair market value of the stock on the grant dates, and expire ten years from the grant date. The Company values restricted stock awards at the closing market value of its common stock on the date of grant and restrictions generally lapse three years after the date of grant.

The majority of the Company's annual share-based incentive awards are made in the fiscal second quarter. The per share weighted average fair value of share-based incentive awards granted in the May 2011 annual grant was $26.81. The fair market value of the awards is estimated on the date of grant using the Black-Scholes pricing model and the following assumptions: risk-free interest rate of 2.6%; expected dividend yield of 1.0%; expected volatility of 35.5%; and an estimated life of 7.0 years.

A summary of share-based awards (options and SARs) as of October 1, 2011 follows below. Forfeitures of share-based awards during the three months ended October 1, 2011 were immaterial.

	Shares		Wtd. Avg. Exercise Price		Wtd. Avg. Remaining Contractual Term (years)	Aggregate Intrinsic Value (in millions)
Number of shares:
Outstanding		1,762,325	$	49.07	6.86	$	6.7
Exercisable		793,875		38.43	5.18		5.8

Restricted Stock

As of October 1, 2011, the Company had 232,730 shares of restricted stock outstanding with a weighted average grant date fair value of $61.22 and a weighted average life of 2.1 years. The Company values restricted stock awards at the closing market value of its common stock on the date of grant and restrictions generally lapse three years after the date of the grant. In the first nine months of 2011, 30,350 shares of restricted stock vested with a weighted average fair value of $43.56 per share, 82,203 shares of restricted stock were granted with a weighted average fair value of $71.80 per share, and 300 shares of restricted stock were forfeited with a weighted average fair value of $52.01 per share.