XML 20 R14.htm IDEA: XBRL DOCUMENT v3.19.3.a.u2
Stock-based and Deferred Compensation Plans
 12 Months Ended
Dec. 29, 2019
Disclosure of Compensation Related Costs, Share-based Payments and Deferred Compensation [Abstract]  
Stock-based and Deferred Compensation Plans Stock-based and Deferred Compensation Plans

Stock-based Compensation Plans

The Company recognized stock-based compensation expense as follows for the periods indicated:
 
FISCAL YEAR
(dollars in thousands)
2019
 
2018
 
2017
Stock options
$
5,270

 
$
6,378

 
$
10,423

Restricted stock and restricted stock units
8,949

 
9,143

 
9,933

Performance-based share units
5,471

 
6,911

 
2,227

 
$
19,690

 
$
22,432

 
$
22,583



Stock Options - Stock options generally vest and become exercisable over a period of four years in an equal number of shares each year. Stock options have an exercisable life of no more than ten years from the date of grant. The Company settles stock option exercises with authorized but unissued shares of the Company’s common stock.

The following table presents a summary of the Company’s stock option activity:
(in thousands, except exercise price and contractual life)
OPTIONS
 
WEIGHTED-
AVERAGE
EXERCISE
PRICE
 
WEIGHTED-
AVERAGE
REMAINING
CONTRACTUAL
LIFE (YEARS)
 
AGGREGATE
INTRINSIC
VALUE
Outstanding as of December 30, 2018
6,190

 
$
18.30

 
5.7
 
$
11,439

Granted
1,237

 
20.59

 
 
 
 
Exercised
(721
)
 
9.11

 
 
 
 
Forfeited or expired
(607
)
 
22.76

 
 
 
 
Outstanding as of December 29, 2019
6,099

 
$
19.40

 
6.0
 
$
18,961

Exercisable as of December 29, 2019
3,846

 
$
19.06

 
4.7
 
$
14,405



Assumptions used in the Black-Scholes option pricing model and the weighted-average fair value of option awards granted were as follows for the periods indicated:
 
FISCAL YEAR
 
2019
 
2018
 
2017
Assumptions:
 
 
 
 
 
Weighted-average risk-free interest rate (1)
2.34
%
 
2.66
%
 
1.92
%
Dividend yield (2)
1.94
%
 
1.50
%
 
1.84
%
Expected term (3)
4.8 years

 
5.8 years

 
6.3 years

Weighted-average volatility (4)
31.05
%
 
32.76
%
 
33.72
%
 
 
 
 
 
 
Weighted-average grant date fair value per option
$
5.07

 
$
7.23

 
$
5.09

________________
(1)
Risk-free interest rate is the U.S. Treasury yield curve in effect as of the grant date for periods within the expected term of the option.
(2)
Dividend yield is the level of dividends expected to be paid on the Company’s common stock over the expected term of the option.
(3)
Expected term represents the period of time that the options are expected to be outstanding. The Company estimates the expected term based on historical exercise experience for its stock options.
(4)
Based on the historical volatility of the Company’s stock.

The following represents stock option compensation information for the periods indicated:
 
FISCAL YEAR
(dollars in thousands)
2019
 
2018
 
2017
Intrinsic value of options exercised
$
7,929

 
$
52,247

 
$
15,139

Cash received from option exercises, net of tax withholding
$
6,501

 
$
40,501

 
$
13,329

Fair value of stock options vested
$
18,136

 
$
34,316

 
$
28,085

Tax benefits for stock option compensation expense (1)
$
1,932

 
$
13,085

 
$
5,889

 
 
 
 
 
 
Unrecognized stock option expense
$
7,669

 
 
 
 
Remaining weighted-average vesting period
1.9 years

 
 
 
 

________________
(1)
Includes excess tax benefits for tax deductions related to the exercise of stock options of $0.2 million, $8.0 million and $2.9 million for fiscal years 2019, 2018 and 2017, respectively.

Restricted Stock and Restricted Stock Units - Restricted stock units granted prior to 2019 generally vest over a period of four years and restricted stock units granted after 2018 generally vest over a period of three years, in an equal number of shares each year. Following is a summary of the Company’s restricted stock unit activity:
(shares in thousands)
NUMBER OF RESTRICTED STOCK UNIT AWARDS
 
WEIGHTED-AVERAGE
GRANT DATE
FAIR VALUE PER AWARD
Outstanding as of December 30, 2018
1,156

 
$
18.65

Granted
610

 
19.15

Vested
(443
)
 
18.50

Forfeited
(135
)
 
19.17

Outstanding as of December 29, 2019
1,188

 
$
18.91



The following represents restricted stock and restricted stock unit compensation information for the periods indicated:
 
FISCAL YEAR
(dollars in thousands)
2019
 
2018
 
2017
Fair value of restricted stock vested
$
8,200

 
$
9,705

 
$
10,182

Tax benefits for restricted stock compensation expense
$
1,672

 
$
2,938

 
$
3,664

 
 
 
 
 
 
Unrecognized restricted stock expense
$
14,800

 
 
 
 
Remaining weighted-average vesting period
2.1 years

 
 
 
 

Performance-based Share Units (“PSUs”) - The number of PSUs that vest is determined for each year based on the achievement of certain performance criteria as set forth in the award agreement and may range from zero to 200% of the annual target grant. The PSUs are settled in shares of common stock, with holders receiving one share of common stock for each performance-based share unit that vests. The fair value of PSUs is based on the closing price of the Company’s common stock on the grant date. Compensation expense for PSUs is recognized over the vesting period when it is probable the performance criteria will be achieved.

The following table presents a summary of the Company’s PSU activity:
(shares in thousands)
PERFORMANCE-BASED SHARE UNITS
 
WEIGHTED-AVERAGE
GRANT DATE
FAIR VALUE PER AWARD
Outstanding as of December 30, 2018
575

 
$
18.54

Granted
237

 
20.00

Vested
(161
)
 
18.61

Forfeited
(119
)
 
17.42

Outstanding as of December 29, 2019
532

 
$
19.42



The following represents PSU compensation information for the periods indicated:
 
FISCAL YEAR
(dollars in thousands)
2019
 
2018
 
2017
Tax benefits for PSU compensation expense
$
857

 
$
406

 
$
501

Unrecognized PSU expense
$
8,000

 
 
 
 
Remaining weighted-average vesting period (1)
1.2 years

 
 
 
 

________________
(1)
PSUs typically vest after three years.

As of December 29, 2019, the maximum number of shares of common stock available for issuance pursuant to the 2016 Omnibus Incentive Plan was 3,310,887.

Deferred Compensation Plans

U.S. Partner Deferred Compensations Plans - Certain U.S. Partners may participate in deferred compensation programs that are subject to the rules of Section 409A of the Internal Revenue Code. The Company may invest in corporate-owned life insurance policies, which are held within an irrevocable grantor or “rabbi” trust account for settlement of certain of the obligations under the deferred compensation plans. The deferred compensation obligation due to U.S. Partners under these plans was $49.0 million and $69.6 million as of December 29, 2019 and December 30, 2018, respectively. The rabbi trust is funded through the Company’s voluntary contributions. The unfunded obligation for U.S. Partners deferred compensation was $9.1 million and $26.3 million as of December 29, 2019 and December 30, 2018, respectively.

Other Compensation Programs - Certain U.S. Partners participate in a non-qualified long-term compensation program that the Company funds as the obligation for each participant becomes due.

401(k) Plan - The Company has a qualified defined contribution plan that qualifies under Section 401(k) of the Internal Revenue Code of 1986, as amended. The Company incurred contribution costs of $5.4 million, $5.3 million and $3.3 million for the 401(k) Plan for 2019, 2018 and 2017, respectively.

Highly Compensated Employee Plan - The Company provides a deferred compensation plan for its highly compensated employees who are not eligible to participate in the 401(k) Plan. The deferred compensation plan allows these employees to contribute a percentage of their base salary and cash bonus on a pre-tax basis. The deferred compensation plan is unsecured and funded through the Company’s voluntary contributions.