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Share-Based Compensation
6 Months Ended
Jul. 02, 2011
Share-Based Compensation  
Share-Based Compensation
(7) Share-Based Compensation

On March 11, 2011, approximately 208,000 stock options were granted to executive officers and other executive level associates under our Long-Term Incentive Plan F. These awards will vest 40% on March 11, 2013, and 20% will vest on March 11, 2014, 2015 and 2016. The fair value of each of these awards was $25.72 per award. Total compensation expense related to these awards is $5.3 million, which is expected to be recognized over a period of 5 years.

On March 11, 2011, we granted approximately 120,000 shares of performance-based non-vested restricted stock to certain executive officers, pursuant to our Long-Term Incentive Plan F. The fair value of each of these awards was $51.60 based on the closing price of our common stock on the date of grant. These awards are scheduled to vest 10% on June 1, 2012 and 2013 and the remaining 80% on June 1, 2014, contingent upon the objective performance metric of a relative adjusted GAAP earnings growth percentage over 2010 for each respective year. These performance awards are also subject to reduction based on an annual subjective performance assessment related to individual performance and performance goal attainment, as defined in the award agreements. The amount of compensation expense recognized is based on management's estimate of the most likely outcome and will be reassessed at each reporting date through the final vesting date, which may result in adjustments to compensation cost. On May 13, 2011, approximately 33% of the above performance-based awards were forfeited due to the resignation of an executive officer. Based on a current period vesting probability assessment, total compensation cost related to the remaining awards is $4.1 million and is expected to be recognized over a period of 3 years.

 

On May 3, 2011, approximately 876,000 stock options were granted to executive level associates under our Long-Term Incentive Plan F and Long-Term Incentive Plan G. These awards will vest 40% on May 3, 2013, and 20% will vest on May 3, 2014, 2015 and 2016. The weighted average fair value of each of these awards was $29.38 per award. Total compensation expense related to these awards is $25.7 million, which is expected to be recognized over a period of 5 years.

On May 27, 2011, we granted approximately 22,400 shares of non-vested restricted stock to our board members under our 2011 Omnibus Equity Incentive Plan. The fair value of each of these awards was $60.14 based on the closing price of our common stock on the date of grant. The majority of these awards are scheduled to vest 100% on May 17, 2012. Total compensation expense related to these awards is $1.3 million, which is expected to be recognized over a one-year period.

The following table presents the total compensation expense recognized in the condensed consolidated statements of operations with respect to stock options, non-vested restricted shares and Associate Stock Purchase Plan shares:

 

     Three Months Ended     Six Months Ended  
(In thousands)    2011     2010     2011     2010  

Stock option and non-vested restricted share compensation expense

   $ 6,187      $ 5,656      $ 13,131      $ 10,806   

Associate stock purchase plan expense

     566        404        1,048        805   

Amounts capitalized in software development costs, net of amortization

     (185     (214     (250     (258
                                

Amounts charged against earnings, before income tax benefit

   $ 6,568      $ 5,846      $ 13,929      $ 11,353   
                                

Amount of related income tax benefit recognized in earnings

   $ 2,502      $ 2,178      $ 5,307      $ 4,229   
                                

As of July 2, 2011, there was $72.5 million of total unrecognized compensation cost related to stock options granted under all plans. That cost is expected to be recognized over a weighted-average period of 3.34 years.