Shareholders' Equity (Notes)

12 Months Ended

Dec. 30, 2017

Stock-Based Compensation Expense

Total stock-based compensation expense was as follows (in thousands):



	2017		2016		2015
Stock options	$	2,344	$	2,281	$	2,634
Stock awards	13,419		9,680		7,656
Total stock-based compensation expense	15,763		11,961		10,290
Income tax benefit	5,249		3,947		3,413
Total stock-based compensation expense, net of tax	$	10,514	$	8,014	$	6,877

Stock Options

A summary of our stock option activity was as follows (in thousands, except per share amounts and years):



	Stock Options		Weighted- Average Exercise Price per Share		Weighted- Average Remaining Contractual Term (years)	Aggregate Intrinsic Value ⁽¹⁾
Balance at December 31, 2016	1,354		$	18.70	5.9	$	7,541
Granted	262		24.26
Exercised	(222	)	14.58
Canceled/Forfeited	(39	)	26.17
Outstanding at December 30, 2017	1,355		$	20.23	6.2	$	23,515

Exercisable at December 30, 2017	879		$	18.79	4.8	$	16,533

Vested and expected to vest at December 30, 2017	1,321		$	20.16	6.1	$	23,023

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⁽¹⁾	Aggregate intrinsic value includes only those options where the current share price is equal to or greater than the share price on the date of grant.

Other information pertaining to options was as follows (in thousands, except per share amounts):



	2017		2016		2015
Weighted-average grant date fair value of stock options granted	$	10.33	$	8.85	$	15.94
Total intrinsic value (at exercise) of stock options exercised	$	3,586	$	2,088	$	4,592

Cash received from the exercise of stock options for the fiscal year ended December 30, 2017 was $3.2 million. Our tax benefit related to the exercise of stock options for the fiscal year ended December 30, 2017 was $1.3 million.

At December 30, 2017, there was $2.8 million of total stock option compensation expense related to non-vested stock options not yet recognized, which is expected to be recognized over a weighted-average period of 1.8 years.

During 2016, 30,500 market-based stock options were granted and had a weighted-average grant date fair value of $10.25 per option. These options are reflected in the stock option activity table above. There were no market-based stock options granted in 2015 or 2017. The assumptions used to calculate the fair value of market-based stock options granted using the Monte Carlo simulation model were as follows:



Valuation Assumptions	2017	2016		2015
Expected dividend yield	NA	0	%	NA
Expected volatility	NA	50	%	NA
Risk-free interest rate	NA	1.8	%	NA

Except for the market-based stock options discussed above, the fair value of options granted was calculated using the Black-Scholes-Merton option-pricing model.

The assumptions used to calculate the fair value of options granted using the Black-Scholes-Merton option-pricing model were as follows:



Valuation Assumptions	2017		2016		2015
Expected dividend yield	0	%	0	%	0	%
Expected volatility	46	%	50	%	54	%
Risk-free interest rate	2.0	%	1.4	%	1.6	%
Expected term (in years)	5.1		5.2		5.2

Stock Awards

Stock award activity was as follows (in thousands, except per share amounts):



	Time- Based Stock Awards		Weighted-Average Grant Date Fair Value	Performance- and Market-Based Stock Awards		Weighted-Average Grant Date Fair Value
Outstanding at December 31, 2016	530		$20.83	899		$20.87
Granted	217		25.81	568		23.03
Vested	(312	)	20.35	(338	)	16.73
Canceled/Forfeited	(40	)	22.47	(66	)	19.88
Outstanding at December 30, 2017	395		$23.77	1,063		$23.41

At December 30, 2017, there was $5.5 million of unrecognized compensation expense related to non-vested time-based stock awards, which is expected to be recognized over a weighted-average period of 1.8 years and $15.2 million of unrecognized compensation expense related to non-vested performance-based and market-based stock awards, which is expected to be recognized over a weighted-average period of 2.1 years.

During 2017, 270,895 performance-based stock awards with a market condition were granted and had a weighted-average grant date fair value of $22.40 per award. These stock awards are reflected in the "Performance- and Market-Based Stock Awards" column in the stock award activity table above. There were no market-based stock awards granted in 2016 or 2015. The assumptions used to calculate the fair value of the 2017 performance-base stock awards with a market condition, using the Monte Carlo simulation model, were as follows:



Valuation Assumptions	2017	2016	2015
Expected dividend yield	0%	NA	NA
Expected volatility	46%	NA	NA
Risk-free interest rate	1.5%	NA	NA

Repurchases of Common Stock

Repurchases of our common stock were as follows (in thousands):



	2017		2016		2015
Amount repurchased under Board-approved share repurchase program	$	150,000	$	125,000	$	98,446
Amount repurchased in connection with the vesting of employee restricted stock grants	5,245		1,693		1,755
Total amount repurchased	$	155,245	$	126,693	$	100,201

Effective as of October 1, 2017, our Board approved an increase in our total remaining share repurchase authorization to $500 million. As of December 30, 2017, the remaining authorization under our Board-approved share repurchase program was $465 million. There is no expiration date governing the period over which we can repurchase shares. Any repurchased shares are constructively retired and returned to an unissued status. The cost of stock repurchases is first charged to additional paid-in-capital. Once additional paid-in capital is reduced to zero, any additional amounts are charged to retained earnings.

Net Income per Common Share

The components of basic and diluted net income per share were as follows (in thousands, except per share amounts):



	2017		2016		2015
Net income	$	65,077	$	51,417	$	50,519

Reconciliation of weighted-average shares outstanding:
Basic weighted-average shares outstanding	41,212		46,154		51,252
Dilutive effect of stock-based awards	873		748		849
Diluted weighted-average shares outstanding	42,085		46,902		52,101

Net income per share – basic	$	1.58	$	1.11	$	0.99
Net income per share – diluted	$	1.55	$	1.10	$	0.97

Additional potential dilutive stock options totaling 0.4 million, 0.6 million and 0.4 million for 2017, 2016 and 2015, respectively, have been excluded from our diluted net income per share calculations because these securities’ exercise prices were anti-dilutive (e.g., greater than the average market price of our common stock).