The Company calculates net income per share using the two-class method, which requires the Company to allocate net income to its Class A Common Shares, Class B Common Shares and unvested share-based payment awards that participate in dividends with common stock, in the calculation of net income per share.

The Class A Common Stock has no voting rights, except (1) as required by law, (2) for the election of Class A Directors, and (3) that the approval of the holders of the Class A Common Stock is required for (a) certain future authorizations or issuances of additional securities which have rights senior to Class A Common Stock, (b) certain alterations of rights or terms of the Class A or Class B Common Stock as set forth in the Articles of Organization of the Company, (c) other amendments of the Articles of Organization of the Company, (d) certain mergers or consolidations with, or acquisitions of, other entities, and (e) sales or dispositions of any significant portion of the Company’s assets.

The Class B Common Stock has full voting rights, including the right to (1) elect a majority of the members of the Company’s Board of Directors and (2) approve all (a) amendments to the Company’s Articles of Organization, (b) mergers or consolidations with, or acquisitions of, other entities, (c) sales or dispositions of any significant portion of the Company’s assets, and (d) equity-based and other executive compensation and other significant corporate matters. The Company’s Class B Common Stock is not listed for trading. Each share of the Class B Common Stock is freely convertible into one share of Class A Common Stock, upon request of the respective Class B holder, and participates equally in dividends.

The Company’s unvested share-based payment awards include unvested shares (1) issued under the Company’s investment share program, which permits employees who have been with the Company for at least one year to purchase shares of Class A Common Stock and to purchase those shares at a discount ranging from 20% to 40% below market value based on years of employment starting after two years of employment, and (2) awarded as restricted stock units at the discretion of the Company’s Board of Directors. The investment shares vest over five years in equal number of shares and the restricted stock units generally vest over four years in equal number of shares. If a dividend is declared, the unvested shares would participate equally. See Note M for a discussion of the current year unvested stock awards and issuances.

Included in the computation of net income per diluted common share are dilutive outstanding stock options and restricted stock that are vested or expected to vest. At its discretion, the Board of Directors grants stock options and restricted stock to senior management and certain key employees. The terms of the employee stock options are determined by the Board of Directors at the time of grant. To date, stock options granted to employees vest over various service periods and/or based on the attainment of certain performance criteria and generally expire after ten years. In December 2018, the Employee Equity Incentive Plan was amended to permit the grant of restricted stock units. The restricted stock units generally vest over four years in equal number of shares. Each restricted stock unit represents an unfunded and unsecured right to receive one share of Class A Stock upon satisfaction of the vesting criteria. The unvested shares participate equally in dividends, if declared, and are forfeitable. The Company also grants stock options to its non-employee directors upon election or re-election to the Board of Directors. The number of option shares granted to non-employee directors is calculated based on a defined formula and these stock options vest immediately upon grant and expire after ten years.

The following table sets forth the computation of basic net income per share using the two-class method:


	Thirteen weeks ended				Thirty-nine weeks ended
	September 28, 2024		September 30, 2023		September 28, 2024		September 30, 2023
	(in thousands, except per share data)				(in thousands, except per share data)
Net income	$	33,514	$	45,295	$	98,450	$	94,374
Allocation of net income for basic:
Class A Common Stock	$	27,500	$	37,542	$	81,082	$	78,276
Class B Common Stock		5,933		7,660		17,140		15,908
Unvested participating shares		81		93		228		190
	$	33,514	$	45,295	$	98,450	$	94,374
Weighted average number of shares for basic:
Class A Common Stock		9,586		10,135		9,783		10,175
Class B Common Stock		2,068		2,068		2,068		2,068
Unvested participating shares		28		25		27		25
		11,682		12,228		11,878		12,268
Net income per share for basic:
Class A Common Stock	$	2.87	$	3.70	$	8.29	$	7.69
Class B Common Stock	$	2.87	$	3.70	$	8.29	$	7.69

The Company calculates diluted net income per share for common stock using the more dilutive of (1) the treasury stock method, or (2) the two-class method, which assumes the participating securities are not exercised.


	Thirteen weeks ended
	September 28, 2024						September 30, 2023
	Earnings to Common Shareholders		Common Shares		EPS		Earnings to Common Shareholders		Common Shares		EPS
	(in thousands, except per share data)
As reported - basic	$	27,500		9,586	$	2.87	$	37,542		10,135	$	3.70
Add: effect of dilutive common shares
Share-based awards		—		17				—		30
Class B Common Stock		5,933		2,068				7,660		2,068
Net effect of unvested participating shares		—		—				1		—
Net income per common share - diluted	$	33,433		11,671	$	2.86	$	45,203		12,233	$	3.70

	Thirty-nine weeks ended
	September 28, 2024						September 30, 2023
	Earnings to Common Shareholders		Common Shares		EPS		Earnings to Common Shareholders		Common Shares		EPS
	(in thousands, except per share data)
As reported - basic	$	81,082		9,783	$	8.29	$	78,276		10,175	$	7.69
Add: effect of dilutive common shares
Share-based awards		—		20				—		37
Class B Common Stock		17,140		2,068				15,908		2,068
Net effect of unvested participating shares		—		—				1		—
Net income per common share - diluted	$	98,222		11,871	$	8.27	$	94,185		12,280	$	7.67

For the thirteen weeks ended September 28, 2024, in accordance with the two-class method, weighted-average stock options to purchase 135,343 shares and 20,395 unvested share-based payments were outstanding but not included in computing dilutive income per common share because their effects were anti-dilutive. For the thirty-nine weeks ended September 28, 2024, in accordance with the two-class method, weighted-average stock options to purchase approximately 129,101 shares of Class A Common Stock and approximately 17,699 unvested share-based payments were outstanding but not included in computing dilutive income per common share because their effects were anti-dilutive. Additionally, performance-based stock options to purchase 10,843 shares of Class A Common Stock and 36,302 performance-based stock awards were outstanding as of September 28, 2024 but not included in computing diluted income per common share because the performance criteria were not met as of the end of the reporting period.

For the thirteen weeks ended September 30, 2023, in accordance with the two-class method, weighted-average stock options to purchase approximately 83,797 shares and approximately 31,962 unvested share-based payments were outstanding but not included in computing dilutive income per common share because their effects were anti-dilutive. For the thirty-nine weeks ended September 30, 2023, in accordance with the two-class method, weighted-average stock options to purchase approximately 76,548 shares of Class A Common Stock and approximately 32,962 unvested share-based payments were outstanding but not included in computing dilutive income per common share because their effects were anti-dilutive. Additionally, performance-based stock options to purchase 21,835 shares of Class A Common Stock and 10,421 performance-based stock awards were outstanding as of September 30, 2023 but not included in computing diluted income per common share because the performance criteria were not met as of the end of the reporting period.