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Note K - Stock-based Compensation

12 Months Ended

Sep. 28, 2024

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 501,000 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 2024, 2023, and 2022 employees purchased 18,243, 17,231 and 16,274 shares at average purchase prices of $140.15, $121.53, and $124.94, respectively. ESPP expense of $0.5 million, $0.6 million, and $0.3 million was recognized for fiscal years 2024, 2023, and 2022, respectively.

Stock Options

A summary of the status of our stock option plans as of fiscal years 2024, 2023, and 2022 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 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
Granted			-				-				-				-
Exercised			(53,300	)			144.24				(50,247	)			122.16
Canceled			(58,470	)			158.50				(15,158	)			161.87

Balance, September 28, 2024			160,051				144.49				145,973				145.01


Exercisable Options September 28, 2024			82,376				155.91				137,448				145.79

There were no incentive stock option grants in fiscal years 2024 or 2023. The weighted-average fair value of incentive stock options granted during fiscal year ended September 24, 2022 was $23.36. There were no non-qualified stock options grants in fiscal years 2024 or 2023. The weighted-average fair value of non-qualified stock options granted during the fiscal year ended September 24, 2022 was $23.36. The total intrinsic value of stock options exercised was $3.4 million, $2.1 million and $4.1 million in fiscal years 2024, 2023, and 2022, respectively.

The total cash received from these option exercises was $13.2 million, $13.1 million and $14.1 million in fiscal years 2024, 2023, and 2022, respectively; and the actual tax benefit realized from the tax deductions from these option exercises was $0.6 million, $0.1 million and $0.7 million in fiscal years 2024, 2023, and 2022, respectively.

At September 28, 2024, the Company has unrecognized compensation expense of approximately $0.5 million related to stock options to be recognized over the next fiscal year.

The following table summarizes information about incentive stock options outstanding as of September 28, 2024:

				Options Outstanding												Options Exercisable
				Number				Weighted-								Number
				Outstanding				Average				Weighted-				Outstanding				Weighted-
				at				Remaining				Average				at				Average
Range of				September 28,				Contractual				Exercise				September 28,				Exercise
Exercise Prices				2024				Life				Price				2024				Price

$125.83	-	$153.04			98,476				2.3			$	131.14				20,801			$	126.49
$165.56	-	$192.13			61,575				1.6			$	165.85				61,575			$	165.85
Total options					160,051												82,376				155.91

The following table summarizes information about nonqualified stock options outstanding as of September 28, 2024:

				Options Outstanding												Options Exercisable
				Number				Weighted-								Number
				Outstanding				Average				Weighted-				Outstanding				Weighted-
				at				Remaining				Average				at				Average
Range of				September 28,				Contractual				Exercise				September 28,				Exercise
Exercise Prices				2024				Life				Price				2024				Price

$117.85	-	$132.38			72,055				2.0			$	124.13				63,530			$	123.03
$150.89	-	$191.40			73,918				4.6			$	165.36				73,918			$	165.36
Total options					145,973												137,448				145.79

Restricted Stock Units

A summary of our service share units (“RSU”)’s as of fiscal years 2024, 2023, and 2022 and the changes during the years ended on those dates is represented below.

						Weighted-
						Average
		Number of				Grant-Date				Weighted-
		Restricted				Fair Value				Average Remaining				Aggregate
		Stock Units				Per Share				Contractual Life				Intrinsic Value
														(in thousands)
Nonvested at September 25, 2021			-				-
Granted			9,200				154.85
Vested			-				-
Canceled			-				-

Nonvested at September 24, 2022			9,200				154.85				2.1
Granted			21,864				154.32
Vested			(3,165	)			154.94
Canceled			-				-

Nonvested at September 30, 2023			27,899				154.46				2.2
Granted			25,957				166.10
Vested			(6,390	)			155.26
Canceled			(2,270	)			158.14

Nonvested at September 28, 2024			45,196				157.32				1.9				7,722

As of September 28, 2024, the Company has unrecognized compensation expense of approximately $4.1 million related to the RSU’s.

Performance Share Units

A summary of our performance share units (“PSU”)’s as of fiscal years 2024, 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.

						Weighted-
						Average
		Number of				Grant-Date				Weighted-
		Performance				Fair Value				Average Remaining				Aggregate
		Share Units				Per Share				Contractual Life				Intrinsic Value
														(in thousands)
Nonvested at September 25, 2021			-				-
Granted			8,868				155.01
Vested			-				-
Canceled			-				-

Nonvested at September 24, 2022			8,868				155.01				2.1
Granted			21,260				155.29
Vested			-				-
Canceled (1)			(8,868	)			-

Nonvested at September 30, 2023			21,260				155.29				2.2
Granted			14,476				167.44
Vested			-				-
Canceled (1)			(4,752	)			163.28

Nonvested at September 28, 2024			30,984				160.47				1.6				5,294

(1)	Includes adjustments for performance achievement.

As of September 28, 2024, the Company has unrecognized compensation expense of approximately $2.8 million related to the PSU’s.