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COMMON STOCK

12 Months Ended

Dec. 28, 2024

COMMON STOCK

H.COMMON STOCK

We maintain and administer our shareholder approved Employee Stock Purchase Plan. The Employee Stock Purchase Plan allows eligible employees to purchase shares of our stock at a share price equal to 85% of fair market value on the purchase date. We have expensed the fair value of the compensation associated with these awards, which approximates the discount. The amount of expense is nominal.

We maintain and administer our shareholder approved Director Compensation Plan. The Director Compensation Plan allows eligible members of the Board of Directors to defer the cash portion of their retainer and committee fees, credited in the form of stock units, and receive shares of our stock at the time of or following their retirement, disability or death. The number of shares to be received is equal to the amount of the cash portion of their retainer and committee fees deferred multiplied by 110%, divided by the fair market value of a share of our stock at the time of deferral. The number of units is increased by the amount of dividends paid on our common stock. The units are immediately vested as of the grant date, since they are considered payment for services rendered quarterly. We recognized expense for this plan of $2.0 million in 2024, $1.9 million in 2023, and $2.0 million in 2022. This plan also allows directors to defer payment of the annual retainer paid in the form of our common stock. The number of shares to be received for their portion of the retainer that is deferred is equal to the amount of shares plus the number of shares attributable to cash dividends payable on those deferred shares.

Finally, we maintain and administer our shareholder approved Long Term Stock Incentive Plan (the "LTSIP”). The LTSIP provides for the grant of stock options, stock appreciation rights, restricted stock, performance shares, sales incentive awards, and other stock-based awards.

Executive Stock Match awards are granted in the year following the requisite service period, which begins at the beginning of each fiscal year, and fully vest on the fifth anniversary of the grant date. Refer to Notes to Consolidated Financial Statements, Note G, "Deferred Compensation" for additional information on the “Plan”.

Below is a summary of common stock issuances for 2024 and 2023 (in thousands, except per share data):


		December 28, 2024
Share Issuance Activity		Common Stock			Average Share Price
Shares issued under the employee stock purchase plan		28		$	118.56

Shares issued under the employee stock gift program		2			120.58
Shares issued under the director compensation plan		3			119.41
Shares issued under the LTSIP		352			113.49
Shares issued under the executive stock match plan		64			111.35
Forfeitures		(41)
Total shares issued under stock grant programs		380		$	113.20

Shares issued under the deferred compensation plans		104		$	114.48


		December 30, 2023
Share Issuance Activity		Common Stock			Average Share Price
Shares issued under the employee stock purchase plan		33		$	98.20

Shares issued under the employee stock gift program		2			95.42
Shares issued under the director retainer stock program		3			92.82
Shares issued under the LTSIP		756			86.14
Shares issued under the executive stock grants plan		75			85.89
Forfeitures		(15)
Total shares issued under stock grant programs		821		$	86.16

Shares issued under the deferred compensation plans		124		$	88.43

A summary of the nonvested restricted stock awards granted under the LTSIP is as follows:


										Weighted-
							Unrecognized			Average
				Weighted-			Compensation			Period to
		Restricted		Average Grant			Expense			Recognize
		Awards		Date Fair Value			(in millions)			Expense
Nonvested at December 25, 2021		1,627,032		$	45.23		$	6.6		0.43 years
Granted		815,874			79.97
Vested		(286,661)			34.00
Forfeited		(17,990)			54.07
Nonvested at December 31, 2022		2,138,255		$	58.70		$	51.4		3.74 years
Granted		830,346			86.11
Vested		(233,763)			40.50
Forfeited		(14,001)			63.54
Nonvested at December 30, 2023		2,720,837		$	68.61		$	76.9		3.68 years
Granted		370,830			113.12
Vested		(740,505)			47.33
Forfeited		(39,777)			88.20
Nonvested at December 28, 2024		2,311,385		$	82.23		$	75.4		3.26 years

Under the Employee Stock Purchase Plan and LTSIP, we recognized share-based compensation expense of $38.2 million, $34.9 million, and $28.2 million and the related total income tax benefits of $8.5 million, $8.2 million, and $6.9 million in 2024, 2023 and 2022, respectively.

For the year-ended December 28, 2024, we have estimated that $16.9 million of share-based bonus awards will be awarded to qualified employees as it relates to the Company’s 2024 performance and granted in 2025 under the LTSIP. Awards granted generally vest after a period of five years from the grant date. In addition to the share-based bonus awards, certain employees are eligible to receive performance units if certain performance metrics are achieved after three years. We have estimated that $0.7 million of performance units will be awarded in 2025. The number of shares and performance units awarded will be determined using the share price as of the grant date on February 24, 2025. As of December 28, 2024 and December 30, 2023, we recognized approximately $2.9 million and $5.0 million, respectively, of compensation expense related to share-based bonus awards and performance units for each of those respective performance years.‬

We have a Sales Incentive Plan for certain eligible employees. Under this plan, sales incentives are determined and calculated using a formula-based approach and estimated monthly based on specific performance metrics. This Plan places a cap on cash payments with the remaining earned incentive being settled in share-based awards. For the year-ended December 28, 2024, we have estimated that $2.1 million of share-based sales incentive awards will be awarded to qualified employees based on the 2024 performance year and granted in 2025. These awards will vest after a period of five years from the grant date. The number of shares awarded will be determined using the share price as of the grant date on February 24, 2025. As of December 28, 2024 and December 30, 2023, we recognized approximately $0.3 million and $1.0 million of compensation expense related to share-based sales incentive awards for each of those respective performance years.‬

In 2024, 2023 and 2022, cash received from share issuances under our plans was $2.8 million, $2.7 million and $2.8 million, respectively.

During 2024, we repurchased 1,409,266 shares of our common stock at an average share price of $113.53. During 2023, we repurchased approximately 974,869 shares of our common stock at an average share price of $84.27. Effective July 24, 2024, our board authorized the repurchase of up to $200 million worth of shares of outstanding stock through July 31, 2025. This share authorization supersedes and replaces our prior share repurchase authorizations. As of December 28, 2024, we had remaining authorization to repurchase up to $199 million worth of shares through July 31, 2025.