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Stockholders' Equity and Stock Compensation Plans | 12 Months Ended
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Sep. 29, 2024
Stockholders' Equity Note [Abstract] |
Stockholders' Equity and Stock Compensation Plans | Stockholders' Equity and Stock Compensation Plans Stock Split. On September 9, 2024, we completed a five-for-one stock split of our common stock. All share, equity award and per share amounts and related stockholders' equity balances presented herein have been retroactively adjusted, where applicable, to reflect the stock split. At fiscal 2024 year-end, we had t he following stock-based compensation plans: •2015 Equity Incentive Plan ("2015 EIP"). Key employees and non-employee directors may be granted equity awards, including stock options, performance share units ("PSUs") and restricted stock units ("RSUs"). Shares issued with respect to awards granted under the 2015 EIP other than stock options or stock appreciation rights, which are referred to as "full value awards", are counted against the 2015 EIP's aggregate share limit as three shares for every share or unit actually issued. No awards have been made under the 2015 Equity Incentive Plan since the adoption of the 2018 Equity Incentive Plan on March 8, 2018 as described below. •2018 Equity Incentive Plan ("2018 EIP"). Key employees and non-employee directors may be granted equity awards, including stock options, PSUs and RSUs. Shares issued with respect to awards granted under the 2018 EIP other than stock options or stock appreciation rights, which are referred to as "full value awards", are counted against the 2018 EIP's aggregate share limit as one share for every share or unit issued. At fiscal 2024 year-end, there were 12.8 million shares available for future awards pursuant to the 2018 EIP. •Employee Stock Purchase Plan ("ESPP"). Purchase rights to purchase common stock are granted to our eligible full and part-time employees, and shares of common stock are issued upon exercise of the purchase rights. An aggregate of 890,250 shares may be issued pursuant to such exercise. The maximum amount that an employee can contribute during a purchase right period is $5,000. The exercise price of a purchase right i s the lesser of 100% of the fair market value of a share of common stock on the first day of the purchase right period (the business day preceding January 1) or 85% of the fair market value on the last day of the purchase right period (December 15, or the business day preceding December 15 if December 15 is not a business day). The following table presents our stock-based compensation and related income tax benefits (in thousands):
| Fiscal Year Ended
| September 29, 2024 |  | October 1, 2023 |  | October 2, 2022
Total stock-based compensation | $ | 31,155 |  |  | $ | 28,607 |  |  | $ | 26,227 |
Income tax benefit related to stock-based compensation | (6,489) |  |  | (5,779) |  |  | (5,377) |
Stock-based compensation, net of tax benefit | $ | 24,666 |  |  | $ | 22,828 |  |  | $ | 20,850 |
We recognize the fair value of our stock-based awards as compensation expense on a straight-line basis over the requisite service period in which the award vests. Most of these amounts were included in selling, general and administrative expenses on our consolidated statements of income. Stock Options The following table presents our stock option activity for fiscal 2024 year-end:
| Number of Options (in thousands) |  | Weighted- Average Exercise Price per Share |  | Weighted- Average Remaining Contractual Term (in years) |  | Aggregate Intrinsic Value (in thousands)
Outstanding on October 1, 2023 | 742 |  |  | $ | 7.89 |  |  |  |  |
Exercised | (410) |  |  | 7.47 |  |  |  |  |
Outstanding on September 29, 2024 | 332 |  |  | $ | 8.41 |  |  | 2.44 |  | $ | 12,598 |
Vested or expected to vest on September 29, 2024 | 332 |  |  | $ | 8.41 |  |  | 2.44 |  | $ | 12,598 |
Exercisable on September 29, 2024 | 332 |  |  | $ | 8.41 |  |  | 2.44 |  | $ | 12,598 |
The aggregate intrinsic value in the table above represents the total intrinsic value (the difference between our closing stock price on the last trading day of fi scal 2024 and the exercise price, times the number of shares) that would have been received by the in-the-money option holders if they had exercised their options on September 29, 2024. This amount will change based on the fair market value of our stock. No stock options were granted in fiscal 2024, 2023 and 2022. The aggregate intrinsic value of options exercised during fiscal 2024, 2023 and 2022 was $12.7 million, $2.5 million and $5.7 million, respectively. Net cash proceeds from the exercise of stock options were $3.1 million, $0.6 million and $1.8 million for fiscal 2024, 2023 and 2022, respectively. Our policy is to issue shares from our authorized shares upon the exercise of stock options. The actual income tax benefit realized from exercises of nonqualified stock options for fiscal 2024, 2023 and 2022 was $2.8 million, $0.6 million and $1.3 million, respectively. RSU and PSU RSU awards are granted to our key employee and non-employee directors. The fair value of the RSU was determined at the date of grant using the market price of the underlying common stock as of the date of grant. All of the RSUs have time-based vesting over a four-year period, except that RSUs awarded to directors vest after one year. The total compensation cost of the awards is then amortized over their applicable vesting period on a straight-line basis. PSU awards are granted to our executive officers and non-employee directors. All of the PSUs are performance-based and vest, if at all, after the conclusion of the three-year performance period. The number of PSUs that ultimately vest is based 50% on growth in our diluted EPS and 50% on our relative total shareholder return over the vesting period. For these performance-based awards, our expected performance is reviewed to estimate the percentage of shares that will vest. The total compensation cost of the awards is then amortized over their applicable vesting period on a straight-line basis. A summary of the RSU and PSU activity under our stock plans is as follows:
| RSU |  | PSU
| Number of Shares (in thousands) |  | Weighted- Average Grant Date Fair Value per Share |  | Number of Shares (in thousands) |  | Weighted- Average Grant Date Fair Value per Share
Nonvested balance at October 3, 2021 | 1,903 |  |  | $ | 16.66 |  |  | 1,588 |  |  | $ | 16.59 |
Granted | 389 |  |  | 36.92 |  |  | 209 |  |  | 49.43 |
Vested | (734) |  |  | 15.49 |  |  | (880) |  |  | 16.03 |
Adjustment (1) | — |  |  | — |  |  | 441 |  |  | 16.13 |
Forfeited | (63) |  |  | 21.80 |  |  | — |  |  | — |
Nonvested balance at October 2, 2022 | 1,495 |  |  | 22.28 |  |  | 1,358 |  |  | 21.85 |
Granted | 525 |  |  | 31.27 |  | 281 |  |  | 39.10 |
Vested | (595) |  |  | 20.81 |  |  | (689) |  |  | 19.97 |
Adjustment (1) | — |  |  | — |  |  | 344 |  |  | 19.97 |
Forfeited | (78) |  |  | 28.00 |  |  | (45) |  |  | 38.74 |
Nonvested balance at October 1, 2023 | 1,347 |  |  | 26.12 |  |  | 1,249 |  |  | 25.64 |
Granted | 723 |  |  | 33.14 |  | 279 |  |  | 41.08 |
Vested | (508) |  |  | 25.87 |  |  | (431) |  |  | 30.61 |
Adjustment (1) | — |  |  | — |  |  | 193 |  |  | 30.61 |
Forfeited | (75) |  |  | 31.45 |  |  | (29) |  |  | 40.36 |
Nonvested balance at September 29, 2024 | 1,487 |  |  | $ | 29.35 |  |  | 1,261 |  |  | $ | 27.78 |
(1) Fiscal 2022 includes a payout adju stment of 440,990 PSUs due to the actual performance level achieved for PSUs granted in fiscal 2019 that vested during fiscal 2022. Fiscal 2023 includes a payout adjustment of 343,960 PSUs due to the actual performance level achieved for PSUs granted in fiscal 2020 that vested during fiscal 2023. Fiscal 2024 includes a payout adjustment of 193,340 PSUs due to the actual performance level achieved for PSUs granted in fiscal 2021 that vested during fiscal 2024. In fiscal 2024, 2023 and 2022, we awarded 723,420, 525,410 and 389,220 shares of RSUs, respectively, to our key employees and non-employee directors. The weighted-average grant-date fair value of RSUs granted during fiscal 2024, 2023 and 2022 was $33.14, $31.27 and $36.92, respectively. At fiscal 2024 year-end, there were 1,486,725 RSUs outstanding. RSU forfeitures result from employment terminations prior to vesting. Forfeited shares return to the pool of authorized shares available for award. We use historical data as a basis to estimate the probability of forfeitures related to RSUs and the ESPP Plan. In fiscal 2024, 2023 and 2022, we awarded 279,180, 281,070 and 208,670 shares of PSUs, respectively, to our executive officers and non-employee directors. The weighted-average grant-date fair value of PSUs granted in fiscal 2024, 2023 and 2022 was $41.08, $39.10 and $49.43, respectively. At fiscal 2024 year-end, there were 1,261,120 PSUs outstanding. The stock-based compensation expense related to RSUs and PSUs for fiscal 2024, 2023 and 2022 was $29.1 million, $26.2 million and $23.9 million, respectively, and was included in total stock-based compensation expense. The actual income tax benefit realized from RSUs and PSUs for fiscal 2024, 2023 and 2022 was $1.6 million, $4.0 million and $9.1 million, respectively. At fiscal 2024 year-end, there was $46.4 million of unrecognized stock-based compensation costs related to nonvested RSUs and PSUs that will be substantially recognized by fiscal 2027 year-end. ESPP The following table summarizes shares purchased, weighted-average purchase price, and cash received for shares purchased under the ESPP (in thousands, except for purchase price):
| Fiscal Year Ended
| September 29, 2024 |  | October 1, 2023 |  | October 2, 2022
Shares purchased | 522 |  |  | 492 |  |  | 531 |
Weighted-average purchase price per share | $ | 28.14 |  |  | $ | 25.66 |  |  | $ | 22.83 |
Cash received from exercise of purchase rights | $ | 14,675 |  |  | $ | 12,628 |  |  | $ | 12,129 |
The grant date fair value of each award granted under the ESPP was estimated using the Black-Scholes option pricing model with the following assumptions:
| Fiscal Year Ended
| September 29, 2024 |  | October 1, 2023 |  | October 2, 2022
Dividend yield | 0.7% |  | 0.7% |  | 1.0%
Expected stock price volatility | 27.1% |  | 38.0% |  | 32.2%
Risk-free rate of return, annual | 4.7% |  | 4.7% |  | 0.4%
Expected life (in years) | 1 |  | 1 |  | 1
For fiscal 2024, 2023 and 2022, we based our expected stock price volatility on historical volatility behavior and current implied volatility behavior. The risk-fr ee rate of return was based on constant maturity rates provided by the U.S. Treasury. The expected life was based on the ESPP terms and conditions. Stock-based compensation expense for fiscal 2024, 2023 and 2022 included $2.0 million, $2.4 million and $2.3 million, respectively, related to the ESPP. The unrecognized stock-based compensation costs for awards granted under the ESPP at fiscal 2024 and 2023 year-ends were $0.5 million and $0.6 million, respectively. At fiscal 2024 year-end, ESPP participants had accumulated $13 million to purchase our common stock.

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- Definition The entire disclosure for shareholders' equity and share-based payment arrangement. Includes, but is not limited to, disclosure of policy and terms of share-based payment arrangement, deferred compensation arrangement, and employee stock purchase plan (ESPP). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 505 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/505/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 718 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/718/tableOfContent + Details
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