Stock-Based Compensation

3 Months Ended

Mar. 25, 2012

Stock-Based Compensation [Abstract]

Stock-Based Compensation

Note 5. STOCK-BASED COMPENSATION

Stock-based compensation cost recognized in operating results (included in selling, general, and administrative expenses) for the three months ended March 25, 2012 and March 27, 2011 was $1.8 million and $2.8 million ($1.7 million and $2.0 million, net of tax), respectively. The associated actual tax benefit realized for the tax deduction from option exercises of share-based payment units and awards released equaled $0.6 million and $1.0 million for the three months ended March 25, 2012 and March 27, 2011, respectively.

Stock Options

Option activity under the principal option plans as of March 25, 2012 and changes during the three months ended March 25, 2012 were as follows:

	Number of Shares	Weighted- Average Exercise Price	Weighted- Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding at December 25, 2011	2,600,805	$ 19.54	4.39	$ 512
Granted	410,270	11.95
Exercised	(27,926)	8.88
Forfeited or expired	(70,338)	15.36
Outstanding at March 25, 2012	2,912,811	$ 18.67	5.01	$ 429
Vested and expected to vest at March 25, 2012	2,814,373	$ 18.86	4.86	$ 429
Exercisable at March 25, 2012	2,277,838	$ 19.68	3.92	$ 429

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company's closing stock price on the last trading day of the first quarter of fiscal 2012 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on March 25, 2012. This amount changes based on the fair market value of the Company's stock. The total intrinsic value of options exercised for the three months ended March 25, 2012 and March 27, 2011 was $0.1 million and $0.9 million, respectively.

As of March 25, 2012, $2.6 million of total unrecognized compensation cost related to stock options is expected to be recognized over a weighted-average period of 2.4 years.

The fair value of share-based payment units was estimated using the Black Scholes option pricing model. The table below presents the weighted-average expected life in years. The expected life computation is based on historical exercise patterns and post-vesting termination behavior. Volatility is determined using changes in historical stock prices. The interest rate for periods within the expected life of the award is based on the U.S. Treasury yield curve in effect at the time of grant. The assumptions and weighted-average fair values were as follows:

Quarter ended	March 25, 2012		March 27, 2011
Weighted-average fair value of grants	$   5.39		$   10.17
Valuation assumptions:
Expected dividend yield	0.00	%	0.00	%
Expected volatility	51.83	%	49.82	%
Expected life (in years)	5.06		4.96
Risk-free interest rate	0.893	%	2.257	%

Restricted Stock Units

Nonvested service based restricted stock units as of March 25, 2012 and changes during the three months ended March 25, 2012 were as follows:

	Number of Shares	Weighted- Average Vest Date (in years)	Weighted- Average Grant Date Fair Value
Nonvested at December 25, 2011	617,672	0.79	$ 21.29
Granted	145,020		$ 11.94
Vested	(130,709)		$ 12.21
Forfeited	(7,536)		$ 20.64
Nonvested at March 25, 2012	624,447	1.30	$ 21.03
Vested and expected to vest at March 25, 2012	568,321	1.21
Vested at March 25, 2012	1,575	—

The total fair value of restricted stock awards vested during the first three months of 2012 was $1.6 million as compared to $3.2 million in the first three months of 2011. As of March 25, 2012, there was $4.0 million of unrecognized stock-based compensation expense related to nonvested restricted stock units. That cost is expected to be recognized over a weighted-average period of 2.0 years.

Other Compensation Arrangements

On March 15, 2010, we initiated a plan in which time-vested cash unit awards were granted to eligible employees. The time-vested cash unit awards under this plan vest one-third each year over three years from the date of grant. The total amount accrued related to the plan equaled $0.3 million at March 25, 2012, of which $0.2 million was expensed for the three months ended March 25, 2012. The total amount accrued related to the plan equaled $0.1 million at March 27, 2011, of which $0.1 million was expensed for the three months ended March 27, 2011. The associated liability is included in Accrued Compensation and Related Taxes in the accompanying Consolidated Balance Sheets.