9. Stock Compensation Plans

Accounting for Stock-Based Compensation

The various Company stock compensation plans are summarized below. For all stock compensation plans, the company’s policy is to issue treasury shares for exercises of options and stock appreciation rights (SARs), releases of restricted stock units (RSUs), and issues of shares under the employee stock purchase plan (ESPP).

2011 Non-employee Directors’ Equity Incentive Plan

In June 2011, the stockholders adopted an equity incentive plan for non-employee directors (the 2011 Directors Plan) providing for grants of stock options, SARs, RSUs and/or performance shares, pursuant to which up to 122,592 shares were available for issuance. The term of each award cannot exceed ten years. Awards may vest over a minimum two-year period. During 2013, 2012 and 2011, 11,484, 9,616 and 11,996 restricted stock units were granted under this plan.

2005 Equity Incentive Plan

In June 2005, the shareholders adopted an equity incentive plan (the 2005 Plan) providing for grants of incentive and nonqualified stock options, SARs, RSUs and/or performance shares to employees of the Company and its subsidiaries, pursuant to which up to 10,000,000 common shares were available for issuance. The various grants vest evenly over a period of five years or as otherwise determined by the Board of Directors or the Compensation Committee and generally expire ten years from the date of grant, if not exercised. Beginning December 10, 2012, restricted stock unit grants will vest evenly over a period of three years. During 2013, 2012, and 2011, 413,978, 495,814, and 410,197 restricted stock units were granted under the 2005 Plan. In addition, in 2013, 52,673 stock appreciation rights were granted, and in 2012 and 2011, 61,235 and 42,330 stock options were granted under the 2005 Plan. No performance shares were granted under the 2005 Plan in 2013, 2012 and 2011. In 2013, the stockholders approved an additional 3,000,000 shares to the 2005 Plan, making the total shares authorized under the plan 13,000,000.

2000 Equity Incentive Plan

In October 2000, the shareholders adopted an equity incentive plan (the 2000 Plan) providing for grants of incentive and nonqualified stock options, SARs, RSUs and/or performance shares to employees of the Company and its subsidiaries, pursuant to which up to 7,000,000 common shares were available for issuance. The stock options and stock appreciation rights vest evenly over a period of five years or as otherwise determined by the Board of Directors or the Compensation Committee and generally expire ten years from the date of grant, if not exercised. The Company did not grant any stock awards from the 2000 Plan in 2013, 2012 or 2011.

2000 Non-employee Directors’ Option Plan

Also in October 2000, the stockholders adopted a stock option plan for non-employee directors (the 2000 Directors Plan) providing for grants of options for up to 100,000 common shares. The term of each award is ten years. All awards vest evenly over a three-year period. In 2009, the stockholders approved an additional 150,000 shares to the plan, making the total shares authorized under the plan 250,000. During 2010, options to purchase 23,924 shares, respectively, were granted under this plan. Following the June 2011 approval of the 2011 Directors Plan, the Company will no longer issue options to purchase shares under this plan.

Stock-Based Compensation Activity

A summary of the Company’s stock-based compensation activity and related information under the 2011 Directors Plan, the 2005 Plan and the 2000 Plan for the years ended December 28, 2013, December 29, 2012, and December 31, 2011 is provided below:

	Stock Options and SARs
	Weighted-Average
	Exercise Price		Number of Shares
			(In Thousands)

Outstanding at December 25, 2010	$	50.87		9,086
Granted	$	39.71		42
Exercised	$	21.02		(764)
Forfeited/Expired	$	64.63		(291)
Outstanding at December 31, 2011	$	53.14		8,073
Granted	$	42.16		61
Exercised	$	24.20		(794)
Forfeited/Expired	$	66.45		(208)
Outstanding at December 29, 2012	$	55.88		7,132
Granted	$	49.07		52
Exercised	$	26.85		(662)
Forfeited/Expired	$	66.09		(283)
Outstanding at December 28, 2013	$	58.44		6,239
Exercisable at December 28, 2013	$	58.73		6,112
Expected to vest after December 28, 2013	$	44.54		127

Stock Options and SARs as of December 28, 2013
Exercise	Awards		Remaining		Awards
Price	Outstanding		Life (Years)		Exercisable
	(In Thousands)				(In Thousands)

$8.00 -$20.00		260		0.77		260
$20.01 - $40.00		725		1.83		700
$40.01 - $60.00		3,023		3.46		2,921
$60.01 - $80.00		1,086		3.41		1,086
$80.01 - $100.00		2		3.93		2
$100.01 - $120.00		1,140		3.89		1,140
$120.01 - $140.00		3		3.75		3
		6,239		3.30		6,112

	Restricted Stock Units
	Weighted-Average
	Grant Date Fair Value		Number of Shares
			(In Thousands)

Outstanding at December 25, 2010	$	25.90		1,503
Granted	$	37.28		422
Released/Vested	$	37.73		(366)
Cancelled	$	25.89		(81)
Outstanding at December 31, 2011	$	29.40		1,478
Granted	$	39.41		506
Released/Vested	$	41.59		(435)
Cancelled	$	26.11		(89)
Outstanding at December 29, 2012	$	30.06		1,460
Granted	$	45.05		425
Released/Vested	$	28.28		(579)
Cancelled	$	30.63		(81)
Outstanding at December 28, 2013	$	37.36		1,225

The weighted-average remaining contract life for stock options and SARs outstanding and exercisable at December 28, 2013 is 3.30 and 3.18 years, respectively. The weighted-average remaining contract life of restricted stock units at December 28, 2013 was 1.68 years.

The fair value for these options was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions for 2013, 2012, and 2011:

	2013			2012			2011
Weighted average grant date fair value of options granted	$	12.82		$	9.98		$	10.53
Expected volatility		0.3746			0.3906			0.4078
Dividend yield		3.86	%		4.50	%		4.02	%
Expected life of options in years		6.8			6.6			6.5
Risk-free interest rate		2.1	%		1.0	%		1.2	%

The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options and SARs which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions, including the expected stock price volatility.

The total fair value of awards vested during 2013, 2012, and 2011 was $20,956, $32,612, and $49,006, respectively. The aggregate intrinsic values of options and SARs outstanding and exercisable at December 28, 2013 were $21,362 and $20,964, respectively. The aggregate intrinsic values of options and SARs exercised during 2013, 2012, and 2011 were $13,114, $12,548, and $14,367, respectively. The aggregate intrinsic value of RSUs outstanding at December 28, 2013 was $57,183. The aggregate intrinsic values of RSUs released during 2013, 2012, and 2011 were $27,007, $17,390, and $14,592, respectively. Aggregate intrinsic value represents the positive difference between the Company’s closing stock price on the last trading day of the fiscal period, which was $46.67 on December 28, 2013, and the exercise price multiplied by the number of options exercised. As of December 28, 2013, there was $43,974 of total unrecognized compensation cost related to unvested share-based compensation awards granted to employees under the stock compensation plans. That cost is expected to be recognized over the weighted average remaining vesting period.

Employee Stock Purchase Plan

The shareholders also adopted an employee stock purchase plan (ESPP). Up to 4,000,000 shares of common stock have been reserved for the ESPP with shareholders approving an additional 2,000,000 shares in May 2010. Shares will be offered to employees at a price equal to the lesser of 85% of the fair market value of the stock on the date of purchase or 85% of the fair market value on the first day of the ESPP period. The ESPP is intended to qualify as an “employee stock purchase plan” under Section 423 of the Internal Revenue Code. During 2013, 2012, and 2011, 395,220, 326,483, and 514,218 shares, respectively, were purchased under the plan for a total purchase price of $12,181, $10,629, and $13,746, respectively. During 2013, 2012 and 2011, the purchases were issued from treasury shares. At December 28, 2013, approximately 839,363 shares were available for future issuance.