9.
EMPLOYEE BENEFIT PLANS Savings Plan - The Company sponsors a defined contribution 401(k) plan, which covers substantially all of its employees. The plan provides for the deferral of employee compensation under Section 401(k) and a discretionary Company match. In 2006, 2005 and 2004, this match was $0.35 per dollar of participant deferral, up to 6% of the total compensation for each participant. Net costs related to this defined contribution plan were $0.9 million in 2006, 2005 and 2004. Employee Stock Ownership Plan - The Company sponsored a non-leveraged Employee Stock Ownership Plan ("ESOP") and related trust prior to June 29, 2004. Effective June 29, 2004 the ESOP was merged into the 401(k) plan. Under the terms of the amended 401(k) plan document there is an annual discretionary defined contribution equal to five percent of each employee's eligible compensation. This amount is contributed to the 401(k) plan in the form of Company stock. Compensation cost recognized related to the defined contribution was approximately $3.3 million in 2006, $2.8 million in 2005 and $2.7 million in 2004. As of December 29, 2006, the 401(k) Plan held 501,278 shares of Company stock and there were 109,822 committed-to-be released shares for the plan, which equals the estimated number of shares to settle the liability based on the closing market price of the Company's stock at December 29, 2006 of $26.92. The final number of shares contributed to the plan was 110,108, computed based on the closing market price of the Company's stock on the actual contribution date of February 20, 2007 of $26.85. Education Assistance Program - The Company reimburses tuition, textbooks and laboratory fees for college or other job related programs for all of its employees. The Company also reimburses college tuition for the dependent children of its full-time employees. For certain employees, the dependent children benefit vests on a straight-line basis over ten years. Minimum academic achievement is required in order to receive reimbursement under both programs. Aggregate expenses under the programs were approximately $1.2 million, $0.9 million and $0.8 million in 2006, 2005 and 2004, respectively.
10.
STOCK-BASED COMPENSATION
Compensation costs related to share-based payments for 2006 totaled $6.4 million, $4.4 million net of tax, or $0.17 per diluted share and $0.20 per basic share. This amount included $2.4 million for accelerated vesting for certain retirement-eligible employees and $0.3 million for modifications. This modification expense relates to the Company's adoption of executive retirement guidelines in 2005 for approximately twenty-five senior level executives and the extension of the exercise period after termination for all outstanding stock options of its former Chief Executive Officer in 2006. The incremental cost of expensing stock options under SFAS No. 123(R) for 2006 was $4.5 million, $3.1 million net of tax or $0.12 per diluted share and $0.14 per basic share. Stock-based compensation expense included in the Consolidated Statements of Cash Flows includes costs recognized for stock options, restricted stock, restricted stock units and the annual share contribution to the 401(k) Plan. See Note 9 - Employee Benefit Plans. 72