XML 30 R20.htm IDEA: XBRL DOCUMENT
v3.3.1.900

STOCK-BASED COMPENSATION | 3 Months Ended
--- | ---
Jan. 24, 2016
STOCK-BASED COMPENSATION |
STOCK-BASED COMPENSATION | NOTE K STOCK-BASED COMPENSATION The Company issues stock options and nonvested shares as part of its stock incentive plans for employees and non-employee directors. The Company’s policy is to grant options with the exercise price equal to the market price of the common stock on the date of grant. Options typically vest over four years and expire ten years after the date of the grant. The Company recognizes stock-based compensation expense ratably over the shorter of the requisite service period or vesting period. The fair value of stock-based compensation granted to retirement-eligible individuals is expensed at the time of grant. A reconciliation of the number of options outstanding and exercisable (in thousands) as of January 24, 2016, and changes during the quarter then ended, is as follows:
|  | Shares |  | Weighted- Average Exercise Price |  | Weighted- Average Remaining Contractual Term |  | Aggregate Intrinsic Value |
Outstanding at October 25, 2015 |  | 34,397 |  | $ 13.83 |  |  |  |  |
Granted |  | 1,745 |  | 37.76 |  |  |  |  |
Exercised |  | 2,019 |  | 9.36 |  |  |  |  |
Forfeited |  | 1 |  | 9.35 |  |  |  |  |
Outstanding at January 24, 2016 |  | 34,122 |  | $ 15.32 |  | 5.3 years |  | $ 773,444 |
Exercisable at January 24, 2016 |  | 26,600 |  | $ 12.37 |  | 4.4 years |  | $ 681,587 |
The weighted-average grant date fair value of stock options granted and the total intrinsic value of options exercised (in thousands) during the first quarter of fiscal years 2016 and 2015 are as follows:
|  | Three Months Ended |
|  | January 24, 2016 |  | January 25, 2015 |
Weighted-average grant date fair value |  | $ 7.71 |  | $ 5.04 |
Intrinsic value of exercised options |  | $ 58,052 |  | $ 9,192 |
The fair value of each option award is calculated on the date of grant using the Black-Scholes valuation model utilizing the following weighted-average assumptions:
|  | Three Months Ended |
|  | January 24, 2016 |  | January 25, 2015 |
Risk-free interest rate |  | 2.1% |  | 2.2% |
Dividend yield |  | 1.5% |  | 1.9% |
Stock price volatility |  | 19.0% |  | 19.0% |
Expected option life |  | 8 years |  | 8 years |
As part of the annual valuation process, the Company reassesses the appropriateness of the inputs used in the valuation models. The Company establishes the risk-free interest rate using stripped U.S. Treasury yields as of the grant date where the remaining term is approximately the expected life of the option. The dividend yield is set based on the dividend rate approved by the Company’s Board of Directors and the stock price on the grant date. The expected volatility assumption is set based primarily on historical volatility. As a reasonableness test, implied volatility from exchange traded options is also examined to validate the volatility range obtained from the historical analysis. The expected life assumption is set based on an analysis of past exercise behavior by option holders. In performing the valuations for option grants, the Company has not stratified option holders as exercise behavior has historically been consistent across all employee and non-employee director groups. The Company’s nonvested shares granted between September 27, 2010, and July 27, 2014, vest after one year. Nonvested shares granted on or after July 28, 2014, vest on the earlier of the day before the Company’s next annual meeting date or one year. There were no changes to the balance of nonvested shares during the first quarter, with 74 thousand shares outstanding at a weighted-average grant date fair value of $25.87 as of January 24, 2016. Stock-based compensation expense, along with the related income tax benefit, for the first quarter of fiscal years 2016 and 2015 is presented in the table below.
|  | Three Months Ended |
(in thousands) |  | January 24, 2016 |  | January 25, 2015 |
Stock-based compensation expense recognized |  | $ | 7,162 |  | $ | 5,524 |
Income tax benefit recognized |  | 2,717 |  | 2,097 |
After-tax stock-based compensation expense |  | $ | 4,445 |  | $ | 3,427 |
At January 24, 2016, there was $15.6 million of total unrecognized compensation expense from stock-based compensation arrangements granted under the plans. This compensation is expected to be recognized over a weighted-average period of approximately 3.1 years. During the quarter ended January 24, 2016, cash received from stock option exercises was $3.5 million compared to $2.1 million for the quarter ended January 25, 2015. The total tax benefit to be realized for tax deductions from these option exercises for the quarter ended January 24, 2016, was $22.0 million compared to $3.5 million in the comparable quarter of fiscal 2015. Shares issued for option exercises and nonvested shares may be either authorized but unissued shares, or shares of treasury stock acquired in the open market or otherwise.

X
- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=51659978&loc=d3e25284-112666 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsSharebasedPaymentsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration