INCENTIVE COMPENSATION

3 Months Ended

Mar. 27, 2016

The Company sponsors a short-term incentive plan that provides the grant of either cash or share-based bonus awards payable upon achievement of specified performance goals (the “STIP”). Full-time, salaried exempt employees of the Company and its affiliates who are selected by the administering committee are eligible to participate in the STIP. The Company has accrued $2.8 million in costs related to the STIP at March 27, 2016 related to cash bonus awards that could potentially be awarded during the remainder of 2016 and 2017.

The Company also sponsors a performance-based, omnibus long-term incentive plan that provides for the grant of a broad range of long-term equity-based and cash-based awards to the Company’s officers and other employees, members of the Board of Directors and any consultants (the “LTIP”). The equity-based awards that may be granted under the LTIP include “incentive stock options,” within the meaning of the Internal Revenue Code, nonqualified stock options, stock appreciation rights, restricted stock awards (“RSAs”) and restricted stock units (“RSUs”). At March 27, 2016, we have reserved approximately 5.3 million shares of common stock for future issuance under the LTIP.

The following awards were outstanding during the thirteen weeks ended March 27, 2016:

Award Type

Benefit

Plan

Awards Granted

Grant

Date

Grant Date Fair Value per Award^(a)

Vesting Condition

Vesting Date

Estimated Forfeiture Rate

Awards Forfeited to Date

Settlement Method

RSU

LTIP

462,518

02/19/2014

16.70

Service

12/31/2016

13.49

73,761

Stock

RSU

LTIP

269,662

03/03/2014

17.18

Performance / Service

12/31/2017

12.34

32,898

Stock

RSU

LTIP

158,226

02/26/2015

27.51

Performance / Service

12/31/2018

(b)

158,226

Stock


(a)	The fair value of each RSA and RSU granted or vested represents the closing price of the Company's common stock on the respective grant date or vesting date.


(b)	Performance conditions associated with these awards were not satisfied. Therefore, 100% of the awards were forfeited.

Compensation costs and the income tax benefit recognized for our share-based compensation arrangements are included below:



	Thirteen Weeks Ended
	March 27, 2016		March 29, 2015
	(In thousands)
Share-based compensation cost:
Cost of sales	$	99	$	113
Selling, general and administrative expense	781		684
Total	$	880	$	797

Income tax benefit	$	257	$	243

The Company’s RSA and RSU activity is included below:



	Thirteen Weeks Ended March 27, 2016				Thirteen Weeks Ended March 29, 2015
	Number		Weighted Average Grant Date Fair Value		Number		Weighted Average Grant Date Fair Value
	(In thousands, except weighted average fair values)
RSAs:
Outstanding at beginning of period	—		$	—	30		$	8.72
Vested	—		—		(15	)	8.72
Forfeited	—		—		—		—
Outstanding at end of period	—		$	—	15		$	8.72

RSUs:
Outstanding at beginning of period	774		$	18.78	1,120		$	11.97
Granted	—		—		428		21.00
Vested	—		—		(671	)	8.81
Forfeited	(148	)	26.82		—		—
Outstanding at end of period	626		$	16.88	877		$	18.80

The total fair value of awards vested during the thirteen weeks ended March 29, 2015 was $22.4 million. No awards vested during the thirteen weeks ended March 27, 2016.

At March 27, 2016, the total unrecognized compensation cost related to all nonvested awards was $5.0 million. That cost is expected to be recognized over a weighted average period of 1.32 years.

Historically, we have issued new shares to satisfy award conversions.