Stock Plans

General

Total share-based compensation expense for the twenty-six weeks ended August 30, 2014 and August 31, 2013 was $4.2 million and $3.4 million, respectively.

Stock Option Activity

Stock options have been granted to directors, officers and other key employees. Generally, options outstanding under the plans are exercisable at a price equal to the fair market value on the date of grant, vest over four years and expire ten years after the date of grant. During the twenty-six weeks ended August 30, 2014 and August 31, 2013, the Company granted approximately 684,000 and 682,000 options, respectively. The estimated weighted-average fair value of the individual options granted during the twenty-six weeks ended August 30, 2014 and August 31, 2013, was $8.58 and $8.13, respectively, on the date of the grant. The fair values for all options were determined using a Black-Scholes option-pricing model with the following weighted average assumptions:



	Twenty-Six Weeks Ended
	August 30, 2014		August 31, 2013
Dividend yield	1.19	%	1.38	%
Volatility	36.9	%	53.6	%
Risk-free interest rate	1.72	%	0.82	%
Expected life	5.0 years		5.0 years

The dividend yield assumption is based on the Company’s history and expectation of dividend payouts. The expected volatility assumption is based on the Company’s analysis of historical volatility. The risk-free interest rate assumption is based upon the average daily closing rates during the period for U.S. treasury notes that have a life, which approximates the expected life of the options. The expected life of employee stock options represents the weighted-average period the stock options are expected to remain outstanding based on historical exercise experience.

As of August 30, 2014, there was $9.5 million of total unrecognized compensation expense, net of estimated forfeitures, related to non-vested options. That expense is expected to be recognized over a weighted average period of 1.9 years.

Restricted Stock Activity

The Company has granted shares of its common stock to non-employee directors, officers and other key employees that are subject to restrictions. The restricted stock granted to employees under the 2002 and 2009 Incentive Plans either vest upon the achievement of specified levels of net income growth over a three-year period or cliff-vest after a three-year period. For performance-based awards, should the net income criteria not be met over the three-year period, the shares will be forfeited. All restricted stock awards issued to non-employee directors cliff-vest after a one-year period from the grant date. During the twenty-six weeks ended August 30, 2014 and August 31, 2013, the Company granted approximately 208,000 and 321,000 restricted shares, respectively.

As of August 30, 2014, there was $8.0 million of total unrecognized compensation expense, net of estimated forfeitures, related to non-vested restricted stock. That expense is expected to be recognized over a weighted average period of 2.1 years.