Stock-based Compensation

Long-term Stock Incentive Plans

The Company's stock-based compensation awards are currently issued under the 2010 Incentive Plan, which was approved by its stockholders on August 5, 2010. However, any prior awards granted under the 1997 Incentive Plan remain subject to the terms of that plan. Any awards that expire, are forfeited, or are surrendered to the Company in satisfaction of taxes are available for issuance under the 2010 Incentive Plan. On September 1, 2016, the Company registered with the Securities and Exchange Commission an additional 0.9 million shares of its Class A common stock for issuance pursuant to the 2010 Incentive Plan. As of March 30, 2019, 2.9 million shares remained available for future issuance under the Company's incentive plans.

Stock-based compensation awards that may be made under the 2010 Incentive Plan include, but are not limited to, (i) stock options, (ii) restricted stock, and (iii) RSUs. During the fiscal periods presented, annual grants consisted entirely of restricted stock and RSUs. Additionally, for RSUs granted to retirement-eligible employees, or employees who become retirement-eligible prior to the end of the awards' respective stated vesting periods, vesting continues post-retirement for all or a portion of the remaining unvested RSUs.

Impact on Results

A summary of total stock-based compensation expense and the related income tax benefits recognized is as follows:



	Fiscal Years Ended
	March 30, 2019			March 31, 2018			April 1, 2017
	(millions)
Compensation expense^(a)	$	88.6		$	74.5		$	63.6
Income tax benefit	(13.1		)	(25.3		)	(22.6		)


^(a)	Fiscal 2018 and Fiscal 2017 includes $2.8 million, and $4.3 million, respectively, of accelerated stock-based compensation expense recorded within restructuring and other charges in the consolidated statements of operations (see Note 9). All other stock-based compensation expense was recorded within SG&A expenses.

The Company issues its annual grants of stock-based compensation awards in the first half of each fiscal year. Due to the timing of the annual grants and other factors, including the timing and magnitude of forfeiture and performance goal achievement adjustments, as well as changes to the size and composition of the eligible employee population, stock-based compensation expense recognized during any given fiscal period is not indicative of the level of compensation expense expected to be incurred in future periods.

Stock Options

Stock options are granted to employees and non-employee directors with exercise prices equal to the fair market value of the Company's Class A common stock on the date of grant. Generally, options become exercisable ratably (graded-vesting schedule) over a three-year vesting period, subject to the employee's continuing employment. Stock options generally expire seven years from the date of grant. No stock options were granted during any of the fiscal years presented.

A summary of stock option activity during Fiscal 2019 is as follows:



	Number of Shares		Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term	Aggregate Intrinsic Value^(a)
	(thousands)				(years)	(millions)
Options outstanding at March 31, 2018	1,151		$	157.86	2.1	$	—
Granted	—		N/A
Exercised	(162	)	134.64
Cancelled/Forfeited	(155	)	156.98
Options outstanding at March 30, 2019	834		$	162.53	1.5	$	—

Options vested at March 30, 2019^(b)	834		$	162.53	1.5	$	—
Options exercisable at March 30, 2019	834		$	162.53	1.5	$	—


^(a)	Aggregate intrinsic value is the amount by which the market price of the Company's Class A common stock at the end of the period exceeds the exercise price of the stock option, multiplied by the number of options.


^(b)	There were no nonvested stock options as of March 30, 2019. Accordingly, there was no related unrecognized compensation expense as of March 30, 2019.

Additional information pertaining to the Company's stock option plans is as follows:



	Fiscal Years Ended
	March 30, 2019		March 31, 2018		April 1, 2017
	(millions)
Aggregate intrinsic value of stock options exercised^(a)	$	1.2	$	—	$	3.0
Cash received from the exercise of stock options	21.8		0.1		5.0
Tax benefits realized on exercise of stock options	3.7		—		1.0


^(a)	Aggregate intrinsic value is the amount by which the market price of the Company's Class A common stock exceeded the stock option's exercise price when exercised, multiplied by the number of options.

Restricted Stock Awards and Service-based RSUs

Restricted shares granted to non-employee directors vest ratably over a three-year period, subject to the director's continued service to the Company. The fair values of restricted stock awards are based on the fair value of the Company's Class A common stock on the date of grant. Holders of restricted shares are entitled to receive cash dividends in connection with the payments of dividends on the Company's Class A common stock. Effective beginning Fiscal 2019, non-employee directors are now granted service-based RSUs in lieu of restricted shares.

Service-based RSUs granted to certain of the Company's senior executives and other employees, as well as non-employee directors, generally vest over a three-year period, subject to the employee's continuing employment (except for awards granted to retirement-eligible employees, or employees who become retirement-eligible prior to the end of the awards' respective stated vesting periods, as previously discussed). The fair values of service-based RSUs are based on the fair value of the Company's Class A common stock on the date of grant, adjusted to reflect the absence of dividends for any awards for which dividend equivalent amounts do not accrue while outstanding and unvested.

A summary of restricted stock and service-based RSU activity during Fiscal 2019 is as follows:



	Restricted Stock				Service- based RSUs
	Number of Shares		Weighted-Average Grant Date Fair Value		Number of Shares		Weighted-Average Grant Date Fair Value
	(thousands)				(thousands)
Nonvested at March 31, 2018	19		$	92.11	1,072		$	81.27
Granted	—		N/A		628		113.38
Vested	(9	)	99.14		(444	)	87.66
Forfeited	—		N/A		(144	)	89.69
Nonvested at March 30, 2019	10		$	86.01	1,112		$	94.99



	Restricted Stock		Service- based RSUs
Total unrecognized compensation expense at March 30, 2019 (millions)	$	0.1	$	39.6
Weighted-average period expected to be recognized over (years)	1.0		2.0

Additional information pertaining to restricted stock and service-based RSU activity is as follows:



	Fiscal Years Ended
	March 30, 2019		March 31, 2018		April 1, 2017
Restricted Stock:
Weighted-average grant date fair value of awards granted	N/A		N/A		$	81.78
Total fair value of awards vested (millions)	$	1.0	N/A		$	0.5
Service-based RSUs:
Weighted-average grant date fair value of awards granted	$	113.38	$	73.59	$	82.89
Total fair value of awards vested (millions)	$	50.0	$	30.0	$	13.8

Performance-based RSUs

The Company grants performance-based RSUs to its senior executives and other key employees. The fair values of performance-based RSUs are based on the fair value of the Company's Class A common stock on the date of grant, adjusted to reflect the absence of dividends for any awards for which dividend equivalent amounts do not accrue while outstanding and unvested. Performance-based RSUs generally vest (i) upon the completion of a three-year period of time (cliff vesting), subject to the employee's continuing employment (except for awards granted to retirement-eligible employees, or employees who become retirement-eligible prior to the end of the awards' respective stated vesting periods, as previously discussed) and the Company's achievement of certain performance goals established at the beginning of the three-year performance period or (ii) ratably, over a three-year period of time (graded vesting), subject to the employee's continuing employment during the applicable vesting period (except for awards granted to retirement-eligible employees, or employees who become retirement-eligible prior to the end of the awards' respective stated vesting periods, as previously discussed) and the achievement by the Company of certain performance goals in the initial year of the three-year vesting period.

For performance-based RSUs subject to cliff vesting, beginning in the second quarter of Fiscal 2019, the number of shares that may be earned ranges between 0% (if the specified threshold performance level is not attained) and 200% (if performance meets or exceeds the maximum achievement level) of the awards originally granted. For such awards granted in recent years prior to Fiscal 2019, the number of shares that may be earned ranges between 0% (if the specified threshold performance level is not attained) and 150% (if performance meets or exceeds the maximum achievement level) of the awards originally granted. If actual performance exceeds the pre-established threshold, the number of shares earned is calculated based on the relative performance between specified levels of achievement.

A summary of performance-based RSU activity during Fiscal 2019 is as follows:



	Performance-based RSUs
	Number of Shares		Weighted-Average Grant Date Fair Value
	(thousands)
Nonvested at March 31, 2018	1,157		$	85.73
Granted	154		129.78
Change due to performance condition achievement	(29	)	126.67
Vested	(232	)	117.16
Forfeited	(39	)	82.27
Nonvested at March 30, 2019	1,011		$	84.16



	Performance-based RSUs
Total unrecognized compensation expense at March 30, 2019 (millions)	$	37.8
Weighted-average period expected to be recognized over (years)	1.5

Additional information pertaining to performance-based RSU activity is as follows:



	Fiscal Years Ended
	March 30, 2019		March 31, 2018		April 1, 2017
Performance-based RSUs:
Weighted-average grant date fair value of awards granted	$	129.78	$	69.40	$	86.11
Total fair value of awards vested (millions)	$	31.8	$	12.9	$	24.4

Market-based RSUs

During the second quarter of Fiscal 2019, the Company granted cliff vesting RSU awards to its senior executives and other key employees, which, in addition to being subject to continuing employment requirements (except for awards granted to retirement-eligible employees, or employees who become retirement-eligible prior to the end of the awards' respective stated vesting periods, as previously discussed), are also subject to a market condition based on TSR performance. The number of shares that vest upon the completion of a three-year period of time is determined by comparing the Company's TSR relative to that of a pre-established peer group over the related three-year performance period. Depending on the Company's level of achievement, the number of shares that ultimately vest may range from 0% to 200% of the awards originally granted.

The Company estimates the fair value of its TSR awards on the date of grant using a Monte Carlo simulation, which models multiple stock price paths of the Company's Class A common stock and that of its peer group to evaluate and determine its ultimate expected relative TSR performance ranking. Compensation expense, net of estimated forfeitures, is recorded regardless of whether, and the extent to which, the market condition is ultimately satisfied.

The assumptions used to estimate the fair value of TSR awards granted during Fiscal 2019 were as follows:



	Fiscal Year Ended
	March 30, 2019
Expected term (years)	2.6
Expected volatility	33.5		%
Expected dividend yield	1.9		%
Risk-free interest rate	2.6		%
Weighted-average grant date fair value	$	177.13

A summary of market-based RSU activity during Fiscal 2019 is as follows:



	Market-based RSUs
	Number of Shares		Weighted-Average Grant Date Fair Value
	(thousands)
Nonvested at March 31, 2018	—		N/A
Granted	80		$	177.13
Change due to market condition achievement	—		N/A
Vested	—		N/A
Forfeited	(4	)	173.83
Nonvested at March 30, 2019	76		$	177.31



	Market-based RSUs
Total unrecognized compensation expense at March 30, 2019 (millions)	$	9.5
Weighted-average period expected to be recognized over (years)	2.1

Additional information pertaining to market-based RSU activity is as follows:



	Fiscal Years Ended
	March 30, 2019		March 31, 2018	April 1, 2017
Market-based RSUs:
Weighted-average grant date fair value of awards granted	$	177.13	N/A	N/A
Total fair value of awards vested (millions)	N/A		N/A	N/A