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Note K - Stock-based Compensation | 12 Months Ended
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Sep. 30, 2023
Notes to Financial Statements |
Share-Based Payment Arrangement [Text Block] | NOTE K – STOCK-BASED COMPENSATION We have a Long-Term Incentive Plan (the “Plan”). Pursuant to the Plan, stock options, which qualify as incentive stock options as well as stock options which are nonqualified, restricted stock units, and performance awards may be granted to officers and our key employees. The exercise price of incentive stock options is at least the fair market value of the common stock on the date of grant. The exercise price for nonqualified options is determined by a committee of the Board of Directors. The options are generally exercisable after three years and expire no later than ten years from date of grant. The fair value of each option grant is estimated on the date of grant using the Black-Scholes options-pricing model. Forfeitures are recognized as they occur. Performance awards may include (i) specific dollar-value target awards, (ii) performance units, or (iii) performance shares. The vesting of performance based awards, if any, is dependent upon the achievement of certain performance targets. If the performance standards are not achieved, all unvested units will expire, and any accrued expense will be reversed. The fair value of the grant is determined based upon the closing price of the Company’s stock on the date of grant. There are approximately 462,000 shares reserved under the Plan for which options, restricted stock units, and performance awards have not yet been issued. There are options that were issued under prior option plans that have since been replaced that are still outstanding. We have an Employee Stock Purchase Plan (“ESPP”) whereby employees purchase stock by making contributions through payroll deductions for six-month periods. The purchase price of the stock is 85% of the lower of the market price of the stock at the beginning of the six-month period or the end of the six-month period. In fiscal years 2023, 2022 and 2021 employees purchased 17,231, 16,274 and 11,988 shares at average purchase prices of $121.53, $124.94, and $116.03, respectively. ESPP expense of $0.6 million, $0.3 million, and $0.6 million was recognized for fiscal years 2023, 2022 and 2021, respectively. Stock Options A summary of the status of our stock option plans as of fiscal years 2023, 2022 and 2021 and the changes during the years ended on those dates is represented below:
|  | Incentive Stock Options |  |  | Nonqualified Stock Options |
|  |  |  |  |  | Weighted- |  |  |  |  |  |  | Weighted- |
|  | Stock |  |  | Average |  |  | Stock |  |  | Average |
|  | Options |  |  | Exercise |  |  | Options |  |  | Exercise |
|  | Outstanding |  |  | Price |  |  | Outstanding |  |  | Price |
Balance, September 26, 2020 |  |  | 470,420 |  |  |  | 136.62 |  |  |  | 346,442 |  |  |  | 122.04 |
Granted |  |  | 111,862 |  |  |  | 165.53 |  |  |  | 43,970 |  |  |  | 160.14 |
Exercised |  |  | (102,976 | ) |  |  | 120.83 |  |  |  | (55,453 | ) |  |  | 120.92 |
Canceled |  |  | (31,684 | ) |  |  | 143.74 |  |  |  | (41,222 | ) |  |  | 95.95 |
Balance, September 25, 2021 |  |  | 447,622 |  |  |  | 146.98 |  |  |  | 293,737 |  |  |  | 132.29 |
Granted |  |  | 103,405 |  |  |  | 132.38 |  |  |  | 11,545 |  |  |  | 132.38 |
Exercised |  |  | (67,782 | ) |  |  | 131.35 |  |  |  | (60,581 | ) |  |  | 107.17 |
Canceled |  |  | (49,886 | ) |  |  | 150.85 |  |  |  | (16,383 | ) |  |  | 151.50 |
Balance, September 24, 2022 |  |  | 433,359 |  |  |  | 146.98 |  |  |  | 228,318 |  |  |  | 132.29 |
Granted |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Exercised |  |  | (83,401 | ) |  |  | 140.30 |  |  |  | (11,294 | ) |  |  | 137.81 |
Canceled |  |  | (78,137 | ) |  |  | 143.96 |  |  |  | (5,646 | ) |  |  | 153.04 |
Balance, September 30, 2023 |  |  | 271,821 |  |  |  | 147.45 |  |  |  | 211,378 |  |  |  | 140.79 |
Exercisable Options September 30, 2023 |  |  | 102,158 |  |  |  | 145.91 |  |  |  | 161,128 |  |  |  | 136.55 |
There were no incentive stock option grants in fiscal year 2023. The weighted-average fair value of incentive stock options granted during fiscal years ended September 24, 2022 and September 25, 2021 was $23.36 and $31.20, respectively. There were no non-qualified stock options grants in fiscal year 2023. The weighted-average fair value of non-qualified stock options granted during the fiscal years ended September 24, 2022 and September 25, 2021 was $23.36 and $29.76, respectively. The total intrinsic value of stock options exercised was $2.1 million, $4.1 million and $6.0 million in fiscal years 2023, 2022 and 2021, respectively. The total cash received from these option exercises was $13.1 million, $14.1 million and $18.7 million in fiscal years 2023, 2022 and 2021, respectively; and the actual tax benefit realized from the tax deductions from these option exercises was $0.1 million, $0.7 million and $1.2 million in fiscal years 2023, 2022 and 2021, respectively. At September 30, 2023, the Company has unrecognized compensation expense of approximately $2.1 million related to stock options to be recognized over the next three fiscal years. The following table summarizes information about incentive stock options outstanding as of September 30, 2023:
|  |  |  | Options Outstanding |  |  | Options Exercisable |
|  |  |  | Number |  |  | Weighted- |  |  |  |  |  |  | Number |  |  |  |  |
|  |  |  | Outstanding |  |  | Average |  |  | Weighted- |  |  | Outstanding |  |  | Weighted- |
|  |  |  | at |  |  | Remaining |  |  | Average |  |  | at |  |  | Average |
Range of |  | September 30, |  |  | Contractual |  |  | Exercise |  |  | September 30, |  |  | Exercise |
Exercise Prices |  | 2023 |  |  | Life |  |  | Price |  |  | 2023 |  |  | Price |
$125.83 | - | $158.97 |  |  | 136,548 |  |  |  | 3.0 |  |  | $ | 130.26 |  |  |  | 48,508 |  |  | $ | 126.27 |
$163.29 | - | $192.13 |  |  | 135,273 |  |  |  | 1.8 |  |  | $ | 164.81 |  |  |  | 53,650 |  |  | $ | 163.67 |
Total options |  |  |  |  | 271,821 |  |  |  |  |  |  |  |  |  |  |  | 102,158 |  |  |  | 145.91 |
The following table summarizes information about nonqualified stock options outstanding as of September 30, 2023:
|  |  |  | Options Outstanding |  |  | Options Exercisable |
|  |  |  | Number |  |  | Weighted- |  |  |  |  |  |  | Number |  |  |  |  |
|  |  |  | Outstanding |  |  | Average |  |  | Weighted- |  |  | Outstanding |  |  | Weighted- |
|  |  |  | at |  |  | Remaining |  |  | Average |  |  | at |  |  | Average |
Range of |  | September 30, |  |  | Contractual |  |  | Exercise |  |  | September 30, |  |  | Exercise |
Exercise Prices |  | 2023 |  |  | Life |  |  | Price |  |  | 2023 |  |  | Price |
$94.24 | - | $119.44 |  |  | 60,000 |  |  |  | 2.0 |  |  | $ | 110.51 |  |  |  | 60,000 |  |  | $ | 110.51 |
$125.83 | - | $153.65 |  |  | 91,544 |  |  |  | 4.5 |  |  | $ | 139.28 |  |  |  | 61,784 |  |  | $ | 135.71 |
$163.29 | - | $191.40 |  |  | 59,834 |  |  |  | 3.1 |  |  | $ | 173.46 |  |  |  | 39,344 |  |  | $ | 177.58 |
Total options |  |  |  |  | 211,378 |  |  |  |  |  |  |  |  |  |  |  | 161,128 |  |  |  | 136.55 |
Restricted Stock Units A summary of our service share units (“RSU”)’s as of fiscal years 2023 and 2022 and the changes during the years ended on those dates is represented below. No RSU’s were granted, vested, or cancelled in fiscal 2021.
|  |  |  |  |  | Weighted- |  |  | Weighted- |  |  |  |  |
|  |  |  |  |  | Average |  |  | Average |  |  |  |  |
|  | Number of |  |  | Grant-Date |  |  | Remaining |  |  | Aggregate |
|  | Performance |  |  | Fair Value |  |  | Contractual |  |  | Intrinsic |
|  | Share Unites |  |  | Per Share |  |  | Life |  |  | Value |
Balance, September 25, 2021 |  |  | - |  |  |  | - |  |  |  | - |  |  |  |  |
Granted |  |  | 9,200 |  |  |  | 154.85 |  |  |  |  |  |  |  |  |
Vested |  |  | - |  |  |  | - |  |  |  |  |  |  |  |  |
Canceled |  |  | - |  |  |  | - |  |  |  |  |  |  |  |  |
Balance, September 24, 2022 |  |  | 9,200 |  |  |  | 154.85 |  |  |  | 2.1 |  |  |  |  |
Granted |  |  | 21,864 |  |  |  | 154.32 |  |  |  |  |  |  |  |  |
Vested |  |  | (3,165 | ) |  |  | 154.94 |  |  |  |  |  |  |  |  |
Canceled |  |  | - |  |  |  | - |  |  |  |  |  |  |  |  |
Balance, September 30, 2023 |  |  | 27,899 |  |  |  | 154.46 |  |  |  | 2.2 |  |  |  | 4,566 |
As of September 30, 2023, the Company has unrecognized compensation expense of approximately $2.5 million related to the RSU’s. Performance Share Units A summary of our performance share units (“PSU”)’s as of fiscal years 2023 and 2022 and the changes during the years ended on those dates is represented below. The shares are represented at the target award amounts based upon the respective performance share agreements. Actual shares that will vest depend on the level of attainment of the performance-based criteria. No PSU’s were granted, vested, or canceled in fiscal 2021.
|  |  |  |  |  | Weighted- |  |  | Weighted- |  |  |  |  |
|  |  |  |  |  | Average |  |  | Average |  |  |  |  |
|  | Number of |  |  | Grant-Date |  |  | Remaining |  |  | Aggregate |
|  | Performance |  |  | Fair Value |  |  | Contractual |  |  | Intrinsic |
|  | Share Unites |  |  | Per Share |  |  | Life |  |  | Value |
Balance, September 25, 2021 |  |  | - |  |  |  | - |  |  |  | - |  |  |  |  |
Granted |  |  | 8,868 |  |  |  | 155.01 |  |  |  |  |  |  |  |  |
Vested |  |  | - |  |  |  | - |  |  |  |  |  |  |  |  |
Canceled |  |  | - |  |  |  | - |  |  |  |  |  |  |  |  |
Balance, September 24, 2022 |  |  | 8,868 |  |  |  | 155.01 |  |  |  | 2.1 |  |  |  |  |
Granted |  |  | 21,260 |  |  |  | 155.29 |  |  |  |  |  |  |  |  |
Vested |  |  | - |  |  |  | - |  |  |  |  |  |  |  |  |
Canceled (1) |  |  | (8,868 | ) |  |  | 155.01 |  |  |  |  |  |  |  |  |
Balance, September 30, 2023 |  |  | 21,260 |  |  |  | 155.29 |  |  |  | 2.2 |  |  |  | 3,479 |
(1) Includes adjustments for performance achievement. As of September 30, 2023, the Company has unrecognized compensation expense of approximately $2.4 million related to the PSU’s.

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