Compensation Plans

9 Months Ended

Jun. 23, 2012

Compensation Plans

Compensation Plans

14.Compensation Plans

Stock Option Plans

The grant-date fair value of employee stock options and similar instruments is estimated using the Black-Scholes option-pricing model with the following assumptions for grants issued during the thirty-nine weeks ended June 23, 2012 and June 25, 2011:

	Thirty-nine weeks ended
	June 23, 2012			June 25, 2011
Average expected life	6 years			6 years
Average volatility	68		%	52		%
Dividend yield	—			—
Risk-free interest rate	1.37		%	2.40		%
Weighted average fair value	$	32.02		$	28.93

Restricted Stock Units and Awards

The Company awards restricted stock units (“RSUs”) to eligible employees which entitle an employee to receive shares of common stock as the units vest based on service.  The Company also grants restricted stock awards (“RSAs”) to eligible employees which entitle an employee to receive shares of common stock as the awards vest based on service.  In general, the receipt of RSUs and RSAs is subject to the employees continuing employment.  RSUs and RSAs are reserved for issuance under the Company’s 2006 Incentive Plan.  The fair value of RSUs and RSAs is based on the closing price of the Company’s common stock on the grant date.  Compensation expense is recognized ratably over the service period.

Employee Stock Purchase Plan

The grant-date fair value of employees’ purchase rights under the Company’s Employee Stock Purchase Plan is estimated using the Black-Scholes option-pricing model with the following assumptions for the purchase rights granted during the thirty-nine weeks ended June 23, 2012 and June 25, 2011:

	Thirty-nine weeks ended
	June 23, 2012			June 25, 2011
Average expected life	6 months			6 months
Average volatility	61		%	52		%
Dividend yield	—			—
Risk-free interest rate	0.09		%	0.20		%
Weighted average fair value	$	10.46		$	14.05

For the thirteen weeks ended June 23, 2012 and June 25, 2011, stock compensation related to the above plans was $4.4 million and $3.0 million, respectively.  For the thirty-nine weeks ended June 23, 2012 and June 25, 2011, stock compensation related to the above plans was $13.6 million and $7.5 million, respectively.

Deferred Compensation Plan

The Company also maintains a Deferred Compensation Plan, which is not subject to the qualification requirements of Section 401(a) of the Code and which allows participants to defer compensation until a future date.  Only non-employee directors and certain highly compensated employees of the Company selected by the Company’s board of directors are eligible to participate in the Plan.  For each of the thirteen week periods ended June 23, 2012 and June 25, 2011, $0.1 million of compensation expense was recorded under this Plan.  For each of the thirty-nine week periods ended June 23, 2012 and June 25, 2011, $0.2 million of compensation expense was recorded under this Plan.