Our accompanying unaudited consolidated statements of income reflect share-based pretax compensation expense of $9.6 million ($6.5 million after-tax) and $18.0 million ($12.2 million after-tax) for the three and six months ended June 25, 2011, respectively, and $6.9 million ($4.8 million after-tax) and $13.0 million ($8.9 million after-tax) for the three and six months ended June 26, 2010, respectively.

Stock-based compensation represents the cost related to stock-based awards granted to employees and non-employee directors. We measure stock-based compensation at the grant date, based on the estimated fair value of the award, and recognize the cost (net of estimated forfeitures) as compensation expense on a straight-line basis over the requisite service period. Our stock-based compensation expense is reflected in selling, general and administrative expenses in our consolidated statements of income.

Stock-based awards are provided to certain employees and non-employee directors under the terms of our 1994 Stock Incentive Plan, as amended, and our 1996 Non-Employee Director Stock Incentive Plan, as amended (together, the "Plans"). The Plans are administered by the Compensation Committee of the Board of Directors. Prior to March 2009, awards under the Plans principally included a combination of at-the-money stock options and restricted stock (including restricted stock units). In March 2009, March 2010 and March 2011, equity-based awards were granted solely in the form of restricted stock and restricted stock units, with the exception of stock options for certain pre-existing contractual obligations.

Grants of restricted stock are common stock awards granted to recipients with specified vesting provisions. We issue restricted stock that vests solely based on the recipient's continued service over time (four-year cliff vesting) and restricted stock that vests based on our achieving specified performance measurements and the recipient's continued service over time (three-year cliff vesting).

With respect to time-based restricted stock, we estimate the fair value on the date of grant based on our closing stock price. With respect to performance-based restricted stock, the number of shares that ultimately vest and are received by the recipient is based upon our performance as measured against specified targets over a three-year period as determined by the Compensation Committee of the Board of Directors. Although there is no guarantee that performance targets will be achieved, we estimate the fair value of performance-based restricted stock, based on our closing stock price at time of grant.

The Plans provide for adjustments to the performance-based restricted stock targets for significant events such as acquisitions, divestitures, new business ventures and share repurchases. Over the performance period, the number of shares of common stock that will ultimately vest and be issued and the related compensation expense is adjusted upward or downward based upon our estimation of achieving such performance targets. The ultimate number of shares delivered to recipients and the related compensation cost recognized as an expense will be based on our actual performance metrics as defined under the Plans.

Restricted stock units are awards that we grant to certain employees that entitle the recipient to shares of common stock upon vesting. We grant restricted stock units with the same time-based and performance-based vesting that we use for restricted stock. The fair value of restricted stock units is determined on the date of grant, based on our closing stock price.

Total unrecognized compensation cost related to non-vested awards as of June 25, 2011 was $84.2 million, which is expected to be recognized over a weighted-average period of approximately 2.4 years.

	2011	2010
Expected dividend yield	0%	0%
Expected stock price volatility	20%	20%
Risk-free interest rate	2.13%	2.37%
Expected life of options (years)	4.75	4.5

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life in Years	Aggregate Intrinsic Value
Outstanding at beginning of period		5,012		$	43.05
Granted		10			69.45
Exercised		(743	)		37.85
Forfeited		(15	)		39.72
Outstanding at end of period		4,264		$	44.02	4.4	$	108,750

Options exercisable at end of period		3,972		$	42.92	4.2	$	105,655

	Time-Based Restricted Stock/Units
	Shares/Units			Weighted Average Grant Date Fair Value				Aggregate Intrinsic Value
Outstanding at beginning of period		743		$	34,804
Granted		230			15,981
Vested		(85	)		(4,369	)
Forfeited		(8	)		(381	)
Outstanding at end of period		880		$	46,035		$	61,212

	Performance-Based Restricted Stock/Units
	Shares/Units			Weighted Average Grant Date Fair Value				Aggregate Intrinsic Value
Outstanding at beginning of period		1,347		$	42,083
Granted		451			32,339
Vested		(45	)		(2,720	)
Forfeited		(7	)		(349	)
Outstanding at end of period		1,746		$	71,353		$	121,350