Share Based Compensation Note | Note 3 : Accounting for Share-Based Compensation Overview: We have various share-based compensation programs, which provide for equity awards including stock options, restricted stock shares, restricted stock units and deferred compensation. These equity awards fall under several plans and are described in detail in our Annual Report on Form 10-K for the year ended November 29, 2014 . Grant-Date Fair Value: We use the Black-Scholes option-pricing model to calculate the grant-date fair value of an award. There were no options granted during the third quarter of 2015. The fair value of options granted during the 39 weeks ended August 29, 2015 and during the 13 weeks and 39 weeks ended August 30, 2014 were calculated using the following weighted average assumptions: 13 Weeks Ended 39 Weeks Ended August 30, 2014 August 29, 2015 August 30, 2014 Expected life (in years) 4.75 4.61 4.75 Weighted-average expected volatility 31.68% 30.91% 34.13% Expected volatility 31.68% 25.50% - 31.67% 31.68% - 37.06% Risk-free interest rate 1.61% 1.26% 1.52% Expected dividend yield 0.96% 1.17% 0.82% Weighted-average fair value of grants $12.89 $10.21 $14.19 Expected life – We use historical employee exercise and option expiration data to estimate the expected life assumption for the Black-Scholes gr ant-date valuation. We believe that this historical data is currently the best estimate of the expected term of a new option. We use a weighted-average expected life for all awards. Expected volatility – Volatility is calculated using our historical volatility for the same period o f time as the expected life. We have no reason to believe that our future volatility will differ materially from the past. Risk-free interest rate – The rate is based on the U.S. Treasury yield curve in effect at the time of the grant for the same peri od of time as the expected life. Expected dividend yield – The calculation is based on the total expected annual dividend payout divided by the average stock price. Expense Recognition: We use the straight-line attribution method to recognize share-ba sed compensation expense for option awards , restricted stock share and restricted stock units with graded and cliff vesting. The amount of share-based compensation expense recognized during a period is based on the value of the portion of the awards that are ultimately expected to vest. Total share-base d compensation expense of $ 3,006 and $ 3,015 was included in our Condensed C onsolidated S tatements of I ncome for the 13 weeks ended August 29, 2015 and August 30, 2014 , respectively. Total sha re-base d compensation expense of $ 10,325 and $ 10,163 was included in our Condensed C onsolidated S tatements of I ncome for the 39 weeks ended August 29, 2015 and August 30, 2014 , respectively. All share-based compensation expense was recorded as selling, general and administrative expense . For the 13 weeks ended August 29, 2015 and August 30, 2014 there was $ 411 and $ 673 of excess tax benefit recognized, respectively. For the 39 weeks ended August 29, 2015 and August 30, 2014 there was $ 1,321 and $ 3,123 of excess tax benefit recognized, respectively. As of August 29, 2015 , there was $ 8,459 of unrecognized compensation costs related to unvested stock option awards, which is expected to be recognized over a w eighted-aver age period of 1.2 years. Unrecognized compensation costs related to unvested re stricted stock shares was $ 1,420 which is expected to be recognized over a weighted-average period of 0.7 years . Unrec ognized compensation costs related to unvested restricted stock units was $ 6,687 which is expected to be recognized over a weighted-average period of 1.2 years. Share-based Activity A summary of option activity as of August 29, 2015 and changes during the 39 weeks then ended is presented below: Weighted- Average Options Exercise Price Outstanding at November 29, 2014 2,534,473 $ 30.39 Granted 704,180 41.17 Exercised (261,914) 22.69 Forfeited or cancelled (88,971) 42.15 Outstanding at August 29, 2015 2,887,768 $ 33.36 There were no options granted during the 13 weeks ended August 29, 2015 . The total fair values of options granted during the 13 weeks ended August 30, 2014 were $ 73 . Total intrinsic values of options exercised during the 13 weeks ended August 29, 2015 and August 30, 2014 were $ 1,565 and $ 1,925 , respectively. Intrinsic value is the difference between our closing stock price on the respective trading day and the exercise price, multiplied by the number of options exe rcised. The total fair values of options granted during the 39 weeks ended August 29, 2015 and August 30, 2014 were $ 7,189 and $ 5,972 , respectively. Total intrinsic values of options exercised during the 39 weeks ended August 29, 2015 an d August 30, 2014 were $ 5,114 and $ 6,855 , respectively. Proceeds received from option exercises during the 13 weeks ended August 29, 2015 and August 30, 2014 were $ 391 and $ 1,680 , respectively and $ 4,342 and $ 6,331 during the 39 weeks ended August 29, 2015 and August 30, 2014 , respectively. A summary of nonvested restricted stock as of August 29, 2015 and changes during the 39 weeks then ended is presented below: Weighted- Weighted- Average Average Remaining Grant Contractual Date Fair Life Units Shares Total Value (in Years) Nonvested at November 29, 2014 188,661 188,622 377,283 $ 40.70 1.0 Granted 142,260 - 142,260 41.00 1.4 Vested (82,333) (67,294) (149,627) 37.53 - Forfeited (9,814) (8,882) (18,696) 40.05 1.1 Nonvested at August 29, 2015 238,774 112,446 351,220 $ 42.24 1.0 Total fair values of restricted stock vested during the 13 weeks ended August 29, 2015 and August 30, 2014 were $ 57 and $ 217 , respectively. Total fair values of restricted stock vested during the 39 weeks ended August 29, 2015 and August 30, 2014 were $ 6,121 and $ 8,758 , respectively. The total fair value of nonvested restricted stock at August 29, 2015 was $ 14,836 . We repurchased 193 and 1,095 restricted stock shares during the 13 weeks ended August 29, 2015 and August 30, 2014 , respectively and 54,196 and 67,407 during the 39 weeks ended August 29, 2015 and August 30, 2014 , respectively. The repurchases relate to statutory minimum tax withholding. We have a Directors’ De ferred Compensation plan that allows non-employee directors to defer all or a portion of their directors’ compensation in a number of investment choices, including units representing shares of our common stock. We also have a Key Employee Deferred Compens ation Plan that allows key employees to defer a portion of their eligible compensation in a number of investment choices, including units, representing shares of our common stock. We provide a 10 percent match on deferred compensation invested into units, representing shares of our common stock. A summary of deferred compensation units as of August 29, 2015 , and changes during the 39 weeks then ended is presented below: Non-employee Directors Employees Total Units outstanding November 29, 2014 342,547 52,303 394,850 Participant contributions 15,136 3,614 18,750 Company match contributions 1 21,519 361 21,880 Payouts (325) (10,580) (10,905) Units outstanding August 29, 2015 378,877 45,698 424,575 1 The non-employee directors’ company match includes 20,005 deferred compensation units paid as discretionary awards to all non-employee directors in the third quarter of 2015. Deferred compensation units are fully vested at the date of contribution. |