Accounting for Sharebased Compensation

9 Months Ended

Aug. 27, 2011

Disclosure Of Share Based Compensation [Abstract]

Share Based Compensation Note

Note 3: Accounting for Share-Based Compensation

Overview: We have various share-based compensation programs, which provide for equity awards including stock options, restricted stock and deferred compensation. These equity awards fall under several plans and are described in detail in our Annual Report filed on Form 10-K as of November 27, 2010.

Grant-Date Fair Value: We use the Black-Scholes option-pricing model to calculate the grant-date fair value of an award. The fair value of options granted during the 13 weeks and 39 weeks ended August 27, 2011 and August 28, 2010were calculated using the following assumptions:

	13 Weeks Ended1		39 Weeks Ended
	August 27, 2011	August 27, 2011	August 28, 2010
Expected life (in years)	4.75	4.75	5.00
Weighted-average expected volatility	50.45%	52.18%	50.81%
Expected volatility	50.45%	50.45% - 52.30%	50.80% - 51.10%
Risk-free interest rate	1.63%	1.93%	2.15%
Expected dividend yield	1.17%	1.29%	1.35%
Weighted-average fair value of grants	$10.10	$9.21	$8.52

1 There were no options granted for the 13 week period ended August 28, 2010.

Expected life – We use historical employee exercise and option expiration data to estimate the expected life assumption for the Black-Scholes grant-date valuation. We believe that this historical data is currently the best estimate of the expected term of a new option. We use a weighted-average expected life for all awards.

Expected volatility – Volatility is calculated using our historical volatility for the same period of time as the expected life. We have no reason to believe that our future volatility will differ from the past.

Risk-free interest rate – The rate is based on the U.S. Treasury yield curve in effect at the time of the grant for the same period of time as the expected life.

Expected dividend yield – The calculation is based on the total expected annual dividend payout divided by the average stock price.

Expense Recognition: We use the straight-line attribution method to recognize share-based compensation expense for option awards with graded vesting and restricted stock awards with graded and cliff vesting. The amount of share-based compensation expense recognized during a period is based on the value of the portion of the awards that are ultimately expected to vest.

Total share-based compensation expense of $1,842 and $2,045 was included in our Consolidated Statements of Income for the 13weeks ended August 27, 2011 and August 28, 2010, respectively.Total share-based compensation expense of $5,213 and $5,607 was included in our Consolidated Statements of Income for the 39weeks ended August 27, 2011 and August 28, 2010, respectively. No share-based compensation was capitalized. All share-based compensation was recorded as selling, general and administrative expense. For the 13 weeks ended August 27, 2011 there was $136of excess tax benefit recognized. For the 13 weeks ended August 28, 2010 there was $4 charged against the APIC Pool for tax deficiencies. For the 39 weeks ended August 27, 2011 and August 28, 2010 there was $269 and $90 of excess tax benefit recognized, respectively.

As of August 27, 2011, there was $6,658 of unrecognized compensation costs related to unvested stock option awards, which is expected to be recognized over a weighted-average period of1.8 years. Unrecognized compensation costs related to unvested restricted stock awards was $5,684, which is expected to be recognized over a weighted-average period of 1.0 years.

Share-based Activity

A summary of option activity as of August 27, 2011 and changes during the 39 weeksthen ended is presented below:

			Weighted-
			Average
	Options		Exercise Price
Outstanding at November 27, 2010	2,820,468	$	18.25
Granted	505,686		22.29
Exercised	(371,059)		15.51
Forfeited or Cancelled	(391,136)		21.82
Outstanding at August 27, 2011	2,563,959	$	18.90

The total fair values of options granted during the 13 weeks ended August 27, 2011were $159. Total intrinsic values of options exercised during the 13 weeks ended August 27, 2011and August 28, 2010 were $293 and $57, respectively.Intrinsic value is the difference between our closing stock price on the respective trading day and the exercise price, multiplied by the number of options exercised. The fair values of options granted during the 39 weeks ended August 27, 2011 and August 28, 2010 were $4,658 and $4,861, respectively. Total intrinsic values of options exercised during the 39 weeks ended August 27, 2011 and August 28, 2010 were $2,573 and $1,233, respectively. Proceeds received from option exercises during the 13 weeks ended August 27, 2011and August 28, 2010 were $512 and $64, respectively and $5,755 and $1,924 during the 39 weeks ended August 27, 2011 and August 28, 2010, respectively.

A summary of nonvested restricted stock as of August 27, 2011, and changes during the 39 weeks then ended is presented below:

						Weighted-
					Weighted-	Average
					Average	Remaining
					Grant	Contractual
					Date Fair	Life
	Units	Shares	Total		Value	(in Years)
Nonvested at November 27, 2010	111,940	365,829	477,769	$	19.17	1.7
Granted	82,492	134,496	216,988		22.34	2.4
Vested	(34,923)	(91,587)	(126,510)		21.61	-
Forfeited	(12,923)	(90,154)	(103,077)		18.59	1.4
Nonvested at August 27, 2011	146,586	318,584	465,170	$	21.90	1.0

Total fair values of restricted stock vested during the 13 weeks ended August 27, 2011 and August 28, 2010 were $11 and $5, respectively. Total fair value of restricted stock vested during the 39 weeks ended August 27, 2011 andAugust 28, 2010 was $2,752and $1,441, respectively. The total fair value of nonvested restricted stock at August 27, 2011 was $7,211.

We did not repurchase any restricted stock shares during the 13 weeks ended August 27, 2011 or August 28, 2010 in conjunction with restricted stock vestings. We repurchased31,640and 17,804restricted stock shares during the 39 weeks ended August 27, 2011 and August 28, 2010, respectively. The repurchases relate to statutory minimum tax withholding. We expect to repurchase approximately 600additional shares for statutory minimum tax withholdingin the remainder of fiscal 2011.

We have a Directors' Deferred Compensation plan that allows non-employee directors to defer all or a portion of their retainer and meeting fees in a number of investment choices, including units representing shares of our common stock. We also have a Key Employee Deferred Compensation Plan that allows key employees to defer a portion of their eligible compensation in a number of investment choices, including units, representing shares of our common stock. We provide a 10 percent match on deferred compensation invested into units, representing shares of our common stock. A summary of deferred compensation units as of August 27, 2011, and changes during the 39 weeks then ended is presented below:

	Non-employee
	Directors	Employees	Total
Units outstanding November 27, 2010	277,345	88,798	366,143
Participant contributions	13,451	2,934	16,385
Company match contributions1	22,090	536	22,626
Payouts	(5,500)	(13,030)	(18,530)
Units outstanding August 27, 2011	307,386	79,238	386,624

1 The non-employee directors' company match includes 19,452 deferred compensation units paid as discretionary awards to all non-employee directors.

Deferred compensation units are fully vested at the date of contribution.