Stock-Based Compensation

3 Months Ended

Nov. 29, 2014

Note 3. Stock-Based Compensation

The Company accounts for all share-based payments in accordance with ASC Topic 718, "Compensation—Stock Compensation" ("ASC 718"). The stock‑based compensation expense related to the stock option plans and the Associate Stock Purchase Plan included in operating expenses was $1,732 and $1,455 for the thirteen week periods ended November 29, 2014 and November 30, 2013, respectively. Tax benefits related to these expenses for the thirteen week periods ended November 29, 2014 and November 30, 2013 were $627 and $526, respectively.

The fair value of each option grant is estimated on the date of grant using the Black‑Scholes option pricing model with the following assumptions:



		Thirteen Weeks Ended
		November 29,			November 30,
		2014			2013
Expected life (in years)		3.9			3.9
Risk-free interest rate		1.09	%		0.93	%
Expected volatility		24.49	%		26.59	%
Expected dividend yield		1.70	%		1.70	%
Weighted-average grant-date fair value	$	14.06		$	14.98

A summary of the Company’s stock option activity for the thirteen week period ended November 29, 2014 is as follows:



	Options	Weighted-Average Exercise Price per Share		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding on August 30, 2014	1,186	$	68.24
Granted	421		83.02
Exercised	(100)		63.76
Canceled/Forfeited	—		—
Outstanding on November 29, 2014	1,507	$	72.67	5.16	$	11,258
Exercisable on November 29, 2014	619	$	63.11	3.86	$	9,423

The unrecognized share‑based compensation cost related to stock option expense at November 29, 2014 was $11,925 and will be recognized over a weighted average period of 2.0 years. The total intrinsic value of options exercised, which represents the difference between the exercise price and market value of common stock measured at each individual exercise date, during the thirteen week periods ended November 29, 2014 and November 30, 2013 were $1,980 and $2,378, respectively.

A summary of the non‑vested restricted share award activity under the Company’s 2005 Omnibus Incentive Plan (the “Plan”) for the thirteen weeks ended November 29, 2014 is as follows:



	Shares	Weighted-Average Grant-Date Fair Value
Non-vested restricted share awards at August 30, 2014	428	$	68.67
Granted	115		83.02
Vested	(117)		58.30
Canceled/Forfeited	(2)		76.28
Non-vested restricted share awards at November 29, 2014	424	$	75.50

Stock‑based compensation expense recognized for the restricted share awards was $2,767 and $2,238 for the thirteen week periods ended November 29, 2014 and November 30, 2013, respectively. The unrecognized compensation cost related to restricted share awards granted under the Plan at November 29, 2014 was $21,674 and will be recognized over a weighted average period of 2.6 years.

A summary of the Company’s non-vested restricted stock unit award activity including dividend equivalent units for the thirteen weeks ended November 29, 2014 is as follows:



	Shares		Weighted- Average Grant- Date Fair Value
Non-vested restricted stock unit awards at August 30, 2014	199	$	55.80
Granted	10		78.72
Vested	—		—
Canceled/Forfeited	—		—
Non-vested restricted stock unit awards at November 29, 2014	209	$	56.85

Stock‑based compensation expense recognized for the restricted stock units was $540 and $539 for the thirteen week periods ended November 29, 2014 and November 30, 2013, respectively. The unrecognized compensation cost related to the restricted stock units at November 29, 2014 was $1,354 and is expected to be recognized over a period of 2.0 years.

- 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.

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