Employee Stock Plans

6 Months Ended

May 02, 2014

Employee Stock Plans

9. As of May 2, 2014, the Company had three share-based compensation plans, which are described below. The compensation cost that has been charged against income for those plans for the first six months of fiscal 2014 and 2013 was $6.6 million and $5.7 million, respectively. During the first six months of fiscal 2014 and 2013, the Company issued 491,320 and 383,669 shares, respectively, under its share-based compensation plans.

Employee Stock Purchase Plan (ESPP)

The ESPP is a “safe-harbor” designed plan whereby shares are purchased by participants at a discount of 5% of the market value on the purchase date and, therefore, compensation cost is not recorded.

Employee Sharesave Scheme

The Company offers shares under its employee sharesave scheme for U.K. employees. This plan allows participants the option to purchase shares at a discount of 5% of the market price of the stock as of the beginning of the offering period. The term of these options is three years. The sharesave scheme is not a “safe-harbor” design, and therefore, compensation cost is recognized on this plan. Under the sharesave scheme, option exercise prices are equal to the fair market value of the Company’s common stock on the date of grant. The Company granted 29,242 and 16,722 options in the six month periods ended May 2, 2014, and April 26, 2013, respectively. The weighted-average grant date fair value of options granted during the six month periods ended May 2, 2014, and April 26, 2013, was $27.03 and $20.24 per share, respectively.

The fair value of the awards under the employee sharesave scheme was estimated using a Black-Scholes pricing model which uses the assumptions noted in the following table. The risk-free rate for the contractual life of the option is based on the U.S. Treasury zero coupon issues in effect at the time of grant.

	Six Months Ended
	May 2,           2014		April 26,           2013
Volatility		33.69%		36.97%
Risk-free interest rate		0.73%		0.40%
Expected life (years)		3		3
Dividends		0		0

Equity Incentive Plan

Under the equity incentive plan, option exercise prices are equal to the fair market value of the Company’s common stock on the date of grant. The Company granted 191,900 and 237,700 options in the six month periods ended May 2, 2014, and April 26, 2013, respectively. The weighted-average grant date fair value of options granted during the six month periods ended May 2, 2014, and April 26, 2013, was $45.20 and $29.12 per share, respectively.

The fair value of each option granted by the Company was estimated using a Black-Scholes pricing model which uses the assumptions noted in the following table. The Company uses historical data to estimate volatility of the Company’s common stock and option exercise and employee termination assumptions. The risk-free rate for the contractual life of the option is based on the U.S. Treasury zero coupon issues in effect at the time of the grant.

	Six Months Ended
	May 2,           2014		April 26,           2013
Volatility		41.87 – 43.17%		41.89 – 44.25%
Risk-free interest rate		1.73 – 2.99%		0.79 – 1.88%
Expected life (years)		5 – 9		4.5 – 9.5
Dividends		0		0

The Company granted 77,075 and 32,200 restricted stock units in the six month periods ended May 2, 2014, and April 26, 2013, respectively. The weighted-average grant date fair value of restricted stock units granted during the six month periods ended May 2, 2014, and April 26, 2013, was $84.34 and $62.52 per share, respectively. The fair value of each restricted stock unit granted by the Company is equal to the fair market value of the Company’s common stock on the date of grant.