Stock Based Compensation (Tables)

9 Months Ended

Oct. 06, 2012

Payout Determined from Total Shareholder Return Shares

food company peers (“Peer Group TSR”). The Company TSR compared to the Peer Group TSR will determine the payout as set forth below:

Percentile	Payout as % of Target
90th	200%
70th	150%
50th	100%
30th	50%
Below 30th	0%

Deferred Stock Activity

The deferred stock activity for the forty weeks ended October 6, 2012 is set forth below (amounts in thousands, except price data):

	Shares		Weighted Average Fair Value		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Balance at December 31, 2011		231	$	16.43
Deferred stock issued		66	$	20.62
Deferred stock exercised		(45)	$	18.00
Balance at October 6, 2012		252	$	17.24		0.24	$	4,827
Outstanding vested at October 6, 2012		160	$	15.98			$	3,071
Outstanding unvested at October 6, 2012		92	$	19.45		0.67	$	1,755
Shares vesting during the quarter ended October 6, 2012		77	$	18.62			$	1,483

Stock Appreciation Rights Activity

The rights activity for the forty weeks ended October 6, 2012 is set forth below (amounts in thousands except price data):

	Rights		Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term		Aggregate Current Intrinsic Value
Outstanding at December 31, 2011		187	$	12.03
Rights exercised		(35)	$	15.61
Outstanding at October 6, 2012		152	$	11.19		2.06	$	1,524

Summary of Company's Stock Based Compensation Expense (Income)

The following table summarizes the company’s stock based compensation expense (income) for the twelve and forty week periods ended October 6, 2012 and October 8, 2011, respectively (amounts in thousands):

	For the Twelve Weeks Ended				For the Forty Weeks Ended
	October 6, 2012		October 8, 2011		October 6, 2012		October 8, 2011
Stock options	$	694	$	1,002	$	2,680	$	5,684
Performance-contingent restricted stock		1,509		1,048		3,094		3,598
Stock appreciation rights		(410)		(568)		178		776
Deferred stock		325		333		1,060		1,145
Total stock based compensation	$	2,118	$	1,815	$	7,012	$	11,203

Return On Invested Capital

Performance Contingent TSR Shares, ROIC Shares and Restricted Stock Awards

The following performance-contingent ROIC Shares have been granted under the EPIP and have service period remaining (amounts in thousands, except price data):

Grant date	7/16/2012
Shares granted		137.5
Approximate vesting date		2/28/2014
Fair value per share	$	21.56

Performance-Contingent Total Shareholder Return Shares

Performance Contingent TSR Shares, ROIC Shares and Restricted Stock Awards

The following performance-contingent TSR Shares have been granted under the EPIP and have service period remaining (amounts in thousands, except price data):

Grant date	7/16/2012
Shares granted		137.5
Approximate vesting date		2/28/2014
Fair value per share	$	23.18

Performance-Contingent Restricted Stock Activity

A summary of the status of all of the company’s nonvested shares for performance-contingent restricted stock as of October 6, 2012, and changes during the forty weeks ended October 6, 2012, is presented below (amounts in thousands, except price data):

	Shares		Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term		Aggregate Current Intrinsic Value
Nonvested at December 31, 2011		576	$	16.67
Vested		(213)	$	17.59
Granted		275	$	22.37
Grant reduction for not achieving the S&P TSR		(43)	$	17.59
Forfeited		(2)	$	16.50
Nonvested at October 6, 2012		593	$	18.92		0.96	$	11,362

Nonqualified Stock Options

Non-Qualified Stock Options, Grant Information And Valuation Assumptions

The following non-qualified stock options (“NQSO”) have been granted under the EPIP with service period remaining. The Black-Scholes option-pricing model was used to estimate the grant date fair value (amounts in thousands, except price data and as indicated):

Grant date	2/10/2011		2/9/2010
Shares granted		2,142		1,703
Exercise price		16.31		16.67
Vesting date		2/10/2014		2/9/2013
Fair value per share ($)		3.47		3.69
Dividend yield (%)(1)		3.00		3.00
Expected volatility (%)(2)		29.20		30.60
Risk-free interest rate (%)(3)		2.44		2.35
Expected option life (years)(4)		5.00		5.00
Outstanding at October 6, 2012		2,100		1,629

1. Dividend yield — estimated yield based on the historical dividend payment for the four most recent dividend payments prior to the grant date.

2. Expected volatility — based on historical volatility over the expected term using daily stock prices.

3. Risk-free interest rate — United States Treasury Constant Maturity rates as of the grant date over the expected term.

4. Expected option life — The 2010 and 2011 grant assumptions are based on the simplified formula determined in accordance with Staff Accounting Bulletin No. 110. The company does not have sufficient historical exercise behavior data to reasonably estimate the expected option life.

Stock Option Activity

The summary of the shares granted and outstanding for NQSO activity for the forty weeks ended October 6, 2012 pursuant to the EPIP is set forth below (amounts in thousands, except price data):

	NQSO		Weighted Average     Exercise Price		Weighted Average Remaining     Contractual Term		Aggregate     Intrinsic Value
Outstanding at December 31, 2011		7,423	$	15.67
Exercised		(690)	$	13.20
Forfeited		(15)	$	16.33
Outstanding at October 6, 2012		6,718	$	15.93		3.82	$	21,707
Exercisable at October 6, 2012		2,982	$	15.27		2.46	$	11,642

Cash Received, Windfall Tax Benefits, and Intrinsic Value from Stock Option Exercises

The cash received, the windfall tax benefits, and intrinsic value from NQSO exercises for the forty weeks ended October 6, 2012 and October 8, 2011 were as follows (amounts in thousands):

	October 6, 2012		October 8, 2011
Cash received from exercises	$	9,112	$	12,721
Cash tax windfall, net	$	1,491	$	3,025
Intrinsic value of NQSO exercised	$	6,472	$	11,542

Performance Contingent Restricted Stock

Performance Contingent TSR Shares, ROIC Shares and Restricted Stock Awards

The following performance-contingent restricted stock awards have been granted under the EPIP and have service period remaining (amounts in thousands, except price data):

Grant date	2/10/2011
Shares granted		324
Approximate vesting date		2/10/2013
Fair value per share	$	15.93