XML 1035 R18.htm IDEA: XBRL DOCUMENT v3.3.1.900
Stock-Based Compensation
 12 Months Ended
Oct. 30, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock-Based Compensation
NOTE 10 – STOCK-BASED COMPENSATION
Our 2015 Omnibus Equity Plan (the Omnibus Plan) authorizes us to grant or issue non-qualified stock options, cash settled awards, share awards and other equity settled awards of up to 7,000,000 shares of common stock. Under the Omnibus Plan, awards denominated in shares of common stock other than options reduce the pool of reserved shares at a multiple of 3.51 times the number of shares awarded. Stock options awarded through the Omnibus Plan reduce the reserved share pool at a rate equal to the number of options granted. As of October 30, 2015, there were 5,311,877 shares available for future grants.
Upon adoption and approval of the Omnibus Plan, all of our previous equity incentive compensation plans were terminated. However, existing awards under those plans continue to vest in accordance with the original vesting schedule and will expire at the end of their original term.
Total stock-based compensation expense was $14,793, $28,314 and $23,230 in 2015, 2014 and 2013, respectively.
Stock Options: Stock options issued to participants other than non-employees and retirement eligible employees vest over three to five years and typically have a contractual term of 10 years. Stock options vest immediately upon grant for non-employee directors.
Stock-based compensation expense included in our Consolidated Statements of Operations for stock options was $1,826, $6,382, and $7,189 in fiscal year 2015, 2014, and 2013, respectively. The total grant-date fair value of options vested during the year was $6,363, $4,444 and $4,631 in fiscal year 2015, 2014 and 2013, respectively. As of October 30, 2015, there was $11,191 of total unrecognized pre-tax compensation cost related to non-vested awards that are expected to be recognized over a weighted-average period of 2.4 years.
The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model. Annually, we make predictive assumptions regarding future stock price volatility, employee exercise behavior, dividend yield, and the forfeiture rate. The dividend yield assumption is based on the expected annual dividend yield on the grant date. Expected stock price volatility is estimated using historical volatility over the expected life of the option. The risk-free interest rate for periods during the expected term of the options is based on yields available on the grant date for US Treasury STRIPS with maturity consistent with the expected life assumption. The expected life represents the period of time that options granted are expected to be outstanding based on historical data to estimate option exercises and employee terminations within the valuation model.
The following table sets forth the weighted-average fair values and assumptions on which the fair values are determined:
 
2015

 
2014

 
2013

Expected dividend yield
1.7
%
 
1.4
%
 
1.4
%
Expected stock price volatility
23.0
%
 
30.0
%
 
30.0
%
Risk-free interest rate
1.8
%
 
2.2
%
 
2.0
%
Expected life of options
6.7 years

 
6.8 years

 
7.4 years

Weighted average fair value on the date of grant
$15.72
 
$22.54
 
$19.12

Stock option activity for the three years ended October 30, 2015 is summarized as follows:
 
Options
Outstanding

 
Weighted Average
Exercise Price
per share1

 
Weighted Average
Remaining
Contractual Life
 
Aggregate
Intrinsic Value2

Balance, October 26, 2012
7,099,778

 
$
27.73

 
6.1 years
 
$
194,442

Granted
463,900

 
64.36

 
 
 
 
Exercised
(1,500,661
)
 
24.32

 
 
 
61,042

Canceled
(200
)
 
17.50

 
 
 
 
Balance, October 25, 2013
6,062,817

 
$
31.37

 
5.9 years
 
$
235,887

Granted
297,865

 
76.50

 
 
 
 
Exercised
(1,098,023
)
 
25.18

 
 
 
54,909

Canceled
(20,419
)
 
53.07

 
 
 
 
Balance, October 31, 2014
5,242,240

 
$
35.15

 
5.5 years
 
$
246,440

Granted
467,860

 
72.58

 
 
 
 
Exercised
(621,237
)
 
28.20

 
 
 
34,497

Canceled
(51,301
)
 
68.27

 
 
 
 
Balance, October 30, 2015
5,037,562

 
$
39.15

 
5.2 years
 
$
210,609

Exercisable
4,241,769

 
32.99

 
4.5 years
 
203,426


1 The exercise price of the options granted during these periods was equal to the market price of the underlying stock on the date of grant.
2 Intrinsic value at October 30, 2015 was based on our closing stock price on the last trading day of the year for in-the-money options.
Options exercisable of 4,489,970 at October 31, 2014 and 5,068,438 at October 25, 2013 had weighted-average exercise prices of $29.74 and $26.81, respectively.
Restricted Stock: Restricted stock awards vest over three to five years. Stock-based compensation expense included in our Consolidated Statements of Operations for restricted stock was $2,161, $5,878 and $1,998 in fiscal year 2015, 2014 and 2013, respectively. As of October 30, 2015, there was $6,246 of total unrecognized pre-tax compensation cost related to restricted stock that is expected to be recognized over a weighted-average period of 2.8 years.
The following table sets forth a reconciliation of restricted stock for the three years ended October 30, 2015:
 
Shares
Outstanding

 
Weighted
Average
Grant Date
Fair Value

 
Aggregate
Intrinsic
Value

Balance, October 26, 2012
474,699

 
$
31.87

 
$
26,089

Granted
75,826

 
63.32

 
4,801

Vested
(182,659
)
 
29.35

 
11,727

Forfeited
(10,943
)
 
41.62

 
(455
)
Balance, October 25, 2013
356,923

 
$
39.54

 
$
25,085

Granted
85,121

 
74.78

 
6,366

Vested
(139,994
)
 
35.90

 
9,831

Forfeited
(22,127
)
 
42.79

 
(947
)
Balance, October 31, 2014
279,923

 
$
51.82

 
$
22,998

Granted
103,863

 
86.21

 
8,954

Vested
(154,703
)
 
38.57

 
12,948

Forfeited
(13,217
)
 
77.21

 
(1,021
)
Balance, October 30, 2015
215,866

 
$
76.36

 
$
17,474


Stock-Settled Restricted Stock Units: We have issued both time and performance based stock-settled restricted stock units to certain team members under the Omnibus Plan.
Time-based
Time-based restricted stock units represent future shares issuable and cliff vest at the end of a three to four year service period. Stock-based compensation expense included in our Consolidated Statements of Operations for stock-settled restricted stock units was $1,831, $0 and $0 in fiscal year 2015, 2014 and 2013, respectively. As of October 30, 2015, there was $4,740 of total unrecognized pre-tax compensation cost related these units that is expected to be recognized over a weighted-average period of 2.3 years.
The following table sets forth a reconciliation of the time-based stock-settled restricted stock units:
 
Units
Outstanding

 
Weighted
Average
Grant Date
Fair Value

 
Aggregate
Intrinsic
Value

Balance, October 31, 2014
—

 
$
—

 
$
—

Granted
93,938

 
85.00

 
7,985

Vested
(1,204
)
 
86.85

 
(105
)
Forfeited
(6,949
)
 
85.56

 
(595
)
Balance, October 30, 2015
85,785

 
$
84.93

 
$
6,944


Performance-based
Performance-based units represent shares potentially issuable in the future based upon EPS over a three year performance period. Dividends are accrued during the performance period for these grants. The fair value of performance share units is calculated based on the stock price at the time of grant. Compensation expense included in our Consolidated Statements of Operations for performance-based stock-settled restricted stock units was $2,299 in fiscal year 2015. As of October 30, 2015, there was $4,667 of total unrecognized pre-tax compensation cost related to performance-based stock-settled restricted stock units that is expected to be recognized over a weighted-average period of 2.2 years.
The following table sets forth a reconciliation of the performance-based stock-settled restricted stock units:
 
Units
Outstanding

 
Weighted
Average
Grant Date
Fair Value

 
Aggregate
Intrinsic
Value

Balance, October 31, 2014
—

 
$
—

 
$
—

Granted
73,468

 
87.03

 
6,394

Vested
(1,598
)
 
87.03

 
(139
)
Forfeited
(5,641
)
 
87.03

 
(490
)
Balance, October 30, 2015
66,229

 
$
87.03

 
$
5,764


Cash-settled Restricted Stock Units: Cash-settled restricted stock units granted through our Omnibus Plan cliff vest at the end of a three to five year service period. These awards are cash-settled and are classified as a liability, which is marked to market each period. This liability is included within our long-term liabilities. Stock-based compensation expense included in our Consolidated Statements of Operations for cash-settled restricted stock units was $5,593, $15,198 and $13,618 in fiscal year 2015, 2014 and 2013, respectively. Cash payments for cash-settled restricted stock units were $15,437 and $8,083 in 2015 and 2014, respectively. There were no payments for cash-settled restricted stock units prior to 2014. As of October 30, 2015, there was $7,499 of total unrecognized pre-tax compensation cost related to cash-settled restricted stock units that is expected to be recognized over a weighted-average period of 1.6 years.
The following table sets forth a reconciliation of cash-settled restricted stock units for the three years ended October 30, 2015:
 
Units
Outstanding

 
Weighted
Average
Grant Date
Fair Value

 
Aggregate
Intrinsic
Value3

Balance, October 26, 2012
445,253

 
$
39.15

 
$
24,471

Granted
190,609

 
63.72

 
12,145

Vested
(15,219
)
 
51.49

 
942

Forfeited
(22,120
)
 
46.03

 
(1,018
)
Balance, October 25, 2013
598,523

 
$
46.41

 
$
42,064

Granted
143,244

 
71.50

 
10,243

Vested
(111,798
)
 
37.62

 
7,960

Forfeited
(33,881
)
 
51.76

 
(1,754
)
Balance, October 31, 2014
596,088

 
$
53.78

 
$
48,975

Granted
48,081

 
84.28

 
4,052

Vested
(180,723
)
 
43.94

 
(15,273
)
Forfeited
(51,630
)
 
59.30

 
(3,017
)
Balance, October 30, 2015
411,816

 
$
60.99

 
$
33,337


3 Intrinsic value of cash-settled restricted stock units vested was based on our closing stock price on the last trading day of the year.
Stock Awards: Stock awards are issued and outstanding upon date awarded. Stock-based compensation expense included in our Consolidated Statements of Operations for stock awards was $1,083, $856, and $425 and in fiscal year 2015, 2014 and 2013, respectively.