9. Stock Compensation Plans

Accounting for Stock-Based Compensation

The various Company stock compensation plans are summarized below:

2005 Equity Incentive Plan

In June 2005, the shareholders adopted an equity incentive plan (the “2005 Plan”) providing for grants of incentive and nonqualified stock options, stock appreciation rights (“SARs”), restricted stock units (“RSUs”) and/or performance shares to employees of the Company and its subsidiaries, pursuant to which up to 10,000,000 common shares were available for issuance. The stock options and stock appreciation rights vest evenly over a period of five years or as otherwise determined by the Board of Directors or the Compensation Committee and generally expire ten years from the date of grant, if not exercised. During 2009, 2008 and 2007, the Company granted 0, 1,454,050 and 2,838,200 stock appreciation rights, respectively. During 2009, 2008 and 2007, 470,950, 1,043,800, and 0 restricted stock units were granted under the 2005 Plan. In 2009, 2008, and 2007, 0, 30,000 and 0 performance shares were also granted under the 2005 Plan.

2000 Equity Incentive Plan

In October 2000, the shareholders adopted an equity incentive plan (the “2000 Plan”) providing for grants of incentive and nonqualified stock options, stock appreciation rights (“SARs”), restricted stock units (“RSUs”) and/or performance shares to employees of the Company and its subsidiaries, pursuant to which up to 7,000,000 common shares were available for issuance. The stock options and stock appreciation rights vest evenly over a period of five years or as otherwise determined by the Board of Directors or the Compensation Committee and generally expire ten years from the date of grant, if not exercised. During 2009, 2008, and 2007, the Company granted 0, 0, and 20,000 stock appreciation rights.

2000 Non-employee Directors’ Option Plan

Also in October 2000, the stockholders adopted a stock option plan for non-employee directors (the Directors Plan) providing for grants of options for up to 100,000 common shares. The term of each award is ten years. All awards vest evenly over a three-year period. During 2009, 2008 and 2007, options to purchase 34,648, 15,696, and 5,562 shares, respectively, were granted under this plan. In 2009, the stockholders approved an additional 150,000 shares to the plan, making the total shares authorized under the plan 250,000.

Stock-Based Compensation Activity

A summary of the Company’s stock-based compensation activity and related information under the 2005 Equity Incentive Plan, the 2000 Equity Incentive Plan and the 2000 Non-employee Directors’ Option Plan for the years ended December 26, 2009, December 27, 2008, and December 29, 2007 is provided below:

	Stock Options and SARs
	Weighted-Average
	Exercise Price		Number of Shares
			(In Thousands)

Outstanding at December 30, 2006	$	29.24		7,726
Granted	$	84.61		2,864
Exercised	$	18.29		(934	)
Forfeited	$	38.11		(125	)
Outstanding at December 29, 2007	$	46.82		9,531
Granted	$	51.00		1,470
Exercised	$	22.35		(226	)
Forfeited	$	53.89		(249	)
Outstanding at December 27, 2008	$	47.76		10,526
Granted	$	23.09		35
Exercised	$	18.08		(278	)
Forfeited	$	59.55		(174	)
Outstanding at December 26, 2009	$	48.28		10,109
Exercisable at December 26, 2009	$	39.37		6,148

Stock Options and SARs as of December 26, 2009
Exercise	Options		Remaining		Options
Price	Outstanding		Life (Years)		Exercisable
	(In Thousands)				(In Thousands)

$7.00 -$20.00		1,801		3.42		1,797
$20.01 - $40.00		2,069		5.21		1,728
$40.01 - $60.00		3,548		7.33		1,546
$60.01 - $80.00		1,314		7.36		526
$80.01 - $100.00		7		7.81		3
$100.01 - $120.00		1,366		7.88		547
$120.01 - $140.00		4		7.78		1
		10,109		6.28		6,148

	Restricted Stock Units
	Weighted-Average
	Grant/Release Price		Number of Shares
			(In Thousands)

Outstanding at December 29, 2007		-		-
Granted	$	19.59		1,044
Released		-		-
Cancelled		-		(1	)
Outstanding at December 27, 2008	$	19.59		1,043
Granted	$	30.44		501
Released	$	30.14		(204	)
Cancelled		-		(24	)
Outstanding at December 26, 2009				1,316

The weighted-average remaining contract life for options outstanding and exercisable at December 26, 2009 is 6.28 and 5.49 years, respectively.

The fair value for these options was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions for 2009, 2008, and 2007:

	2009			2008			2007
Weighted average fair value of options granted	$	7.32		$	18.47		$	33.81
Expected volatility		0.4286			0.3845			0.3677
Dividend yield		2.42	%		3.75	%		0.76	%
Expected life of options in years		6.2			6.0			6.0
Risk-free interest rate		3	%		2	%		4	%

The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions, including the expected stock price volatility. Because the Company’s employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options. The weighted-average fair value for awards granted during 2009, 2008, and 2007 was $29.20, $37.96 and $84.61, respectively.

The total fair value of awards vested during 2009, 2008, and 2007 was $41,527, $35,384, and $17,840, respectively. The aggregate intrinsic values of options outstanding and exercisable at December 26, 2009 were $36.3 million and $34.6 million, respectively. The aggregate intrinsic value of options exercised during the year ended December 26, 2009 was $3.7 million. Aggregate intrinsic value represents the positive difference between the Company’s closing stock price on the last trading day of the fiscal period, which was $30.98 on December 26, 2009, and the exercise price multiplied by the number of options exercised. As of December 26, 2009, there was $111.5 million of total unrecognized compensation cost related to unvested share-based compensation awards granted to employees under the stock compensation plans. That cost is expected to be recognized over a period of five years.

Employee Stock Purchase Plan

The shareholders also adopted an employee stock purchase plan (ESPP). Up to 2,000,000 shares of common stock have been reserved for the ESPP. Shares will be offered to employees at a price equal to the lesser of 85% of the fair market value of the stock on the date of purchase or 85% of the fair market value on the enrollment date. The ESPP is intended to qualify as an “employee stock purchase plan” under Section 423 of the Internal Revenue Code. During 2009, 2008, and 2007, 209,416, 362,902, and 120,230 shares, respectively were purchased under the plan for a total purchase price of $3,874, $8,782, and $5,730, respectively. At December 26, 2009, approximately 424,637 shares were available for future issuance.