4. Earnings per Share (EPS) and Common Stock

EPS

Basic EPS is calculated by dividing net income by the weighted average number of shares outstanding during the period. Unvested restricted stock, although legally issued and outstanding, is not considered outstanding for purposes of calculating basic EPS. Diluted EPS is calculated by dividing net income by the weighted average number of shares outstanding plus the dilutive effect, if any, of outstanding stock options, restricted shares and RSUs using the treasury stock method. The calculation of the dilutive effect of outstanding equity awards under the treasury stock method includes consideration of proceeds from the assumed exercise of stock options, unrecognized compensation expense and any tax benefits as additional proceeds.

The following table presents the calculation for both basic and diluted EPS:


	Three months ended				Nine months ended
Calculation of Basic and Diluted EPS	July 2, 2011		July 3, 2010		July 2, 2011		July 3, 2010
	(in thousands, except per share data)
Net income	$	15,526	$	10,718	$	47,803	$	37,583

Weighted average shares outstanding—Basic		118,214		115,188		117,622		115,802
Dilutive effect of employee stock options, restricted shares and restricted stock units		2,950		3,815		3,527		4,194

Weighted average shares outstanding—Diluted		121,164		119,003		121,149		119,996

Earnings per share—Basic	$	0.13	$	0.09	$	0.41	$	0.32
Earnings per share—Diluted	$	0.13	$	0.09	$	0.39	$	0.31

Stock options to purchase 0.1 million shares for both the third quarter and first nine months of 2011, and 1.5 million shares and 1.9 million shares for the third quarter and first nine months of 2010, respectively, were outstanding but were not included in the calculation of diluted EPS because the exercise prices per share were greater than the average market price of our common stock for those periods. These shares were excluded from the computation of diluted EPS as the effect would have been anti-dilutive.

Common Stock Repurchases

Our Articles of Organization authorize us to issue up to 500 million shares of our common stock. Our Board of Directors has authorized us to use up to $200 million of cash from operations to repurchase shares of our common stock in open market purchases. This authorization will expire on September 30, 2011 unless earlier revoked. In the third quarter and first nine months of 2011, we repurchased 1.8 million shares at a cost of $39.9 million and we have $78.1 million remaining under our current authorization. In the third quarter and first nine months of 2010, we repurchased 0.8 million shares at a cost of $15.0 million and 3.6 million shares at a cost of $60.0 million, respectively. All shares of our common stock repurchased are automatically restored to the status of authorized and unissued.