Shareholders' Equity and Share-Based Compensation

12 Months Ended

Dec. 26, 2024

Shareholders’ Equity and Share-Based Compensation

8. Shareholders’ Equity and Share-Based Compensation

Shareholders may convert their shares of Class B Common Stock into shares of Common Stock at any time. Class B Common Stock shareholders are substantially restricted in their ability to transfer their Class B Common Stock. Holders of Common Stock are entitled to cash dividends per share equal to 110% of all dividends declared and paid on each share of the Class B Common Stock. Holders of Class B Common Stock are entitled to ten votes per share while holders of Common Stock are entitled to one vote per share on any matters brought before the shareholders of the Company. Liquidation rights are the same for both classes of stock.

Through December 26, 2024, the Company’s Board of Directors has approved the repurchase of up to 11,687,500 shares of Common Stock to be held in treasury. The Company intends to reissue these shares upon the exercise of stock options and the issuance of restricted stock, restricted stock units and performance stock units. The Company repurchased 713,456,

94,508 and 134,694 shares pursuant to these authorizations during fiscal 2024, fiscal 2023 and fiscal 2022, respectively. At December 26, 2024, there were 1,714,682 shares available for repurchase under these authorizations.

In fiscal 2024, the Company discontinued its Associate Stock Purchase Plan and amended its Dividend Reinvestment Plan. Under the amended plan, the Company’s Board of Directors has authorized the issuance of up to 250,000 shares of Common Stock. At December 26, 2024, there were 245,330 shares available under this authorization.

Shareholders have approved the issuance of up to 7,437,500 shares of Common Stock under various equity incentive plans. At December 26, 2024, there were 159,370 shares available for grants of various equity awards under the current plan, each discussed below.

Total pre-tax share-based compensation expense was $8,206, $6,394 and $8,170 in fiscal 2024, fiscal 2023 and fiscal 2022, respectively. The recognized tax benefit on share-based compensation was $1,879, $1,000 and $1,338 in fiscal 2024, fiscal 2023 and fiscal 2022, respectively.

Stock Options

Stock options granted under the plans to employees generally become exercisable either 40% after two years, 60% after three years, 80% after four years and 100% after five years of the date of grant, or 50% after two years, 75% after three years and 100% after four years of the date of grant, depending on the date of grant. The options generally expire ten years from the date of grant as long as the optionee is still employed with the Company. The Company ceased issuing stock options beginning in fiscal 2024.

A summary of the Company’s stock option activity and related information follows (shares in thousands):


	Year Ended
	December 26, 2024			December 28, 2023				December 29, 2022
	Options	Weighted- Average Exercise Price		Options		Weighted- Average Exercise Price		Options		Weighted- Average Exercise Price
Outstanding at beginning of period	3,173	$	22.69	2,866		$	23.76	2,533		$	24.84
Granted	—	—		525		15.96		501		16.99
Exercised	(129)	15.34		(83)		13.05		(68)		13.15
Forfeited	(160)	18.94		(135)		25.11		(100)		24.89
Outstanding at end of period	2,884	23.22		3,173		22.69		2,866		23.76
Exercisable at end of period	2,125	$	25.48	1,989		$	25.53	1,613		$	25.70
Weighted-average fair value of options granted during the period	n/a			$	7.86			$	7.71

Exercise prices for options outstanding as of December 26, 2024 ranged from $12.71 to $41.90. The weighted-average remaining contractual life of those options is 5.4 years. The weighted-average remaining contractual life of options currently exercisable is 4.6 years. There were 2,868,580 options outstanding, vested and expected to vest as of December 26, 2024, with a weighted-average exercise price of $23.26 and an intrinsic value of $6,723. Additional

information as of December 26, 2024 related to options outstanding segregated by exercise price range is as follows (shares in thousands):


	Exercise Price Range
	$12.71 to $17.05		$17.06 to $27.00		$27.01 to $41.90
Options outstanding	1,095		943		846
Weighted-average exercise price of options outstanding	$	15.97	$	22.61	$	33.30
Weighted-average remaining contractual life of options outstanding	7.4		4.0		4.2
Options exercisable	422		857		846
Weighted-average exercise price of options exercisable	$	15.46	$	22.70	$	33.30

The intrinsic value of options outstanding at December 26, 2024 was $6,804 and the intrinsic value of options exercisable at December 26, 2024 was $3,155. The intrinsic value of options exercised was $725, $171 and $164 during fiscal 2024, fiscal 2023 and fiscal 2022, respectively. As of December 26, 2024, total remaining unearned compensation cost related to stock options was $1,582, which will be amortized to expense over the remaining weighted-average life of 1.8 years.

Restricted Stock

Awarded shares of restricted stock cumulatively vest either 25% after three years of the grant date, 50% after five years of the grant date, 75% after ten years of the grant date and 100% upon retirement, or 50% after two years of the grant date and 100% after four years of the grant date, or 50% after two years of the grant date and 100% after three years of the grant date, depending on the date of grant. A special long-term incentive and retention award of restricted stock with a vesting period of 100% after four years of the grant date, or upon retirement after three years of the grant date, was awarded to certain executives in fiscal 2024. The restricted stock may not be sold, transferred, pledged or assigned, except as provided by the vesting schedule included in the Company’s equity incentive plan. During the period of restriction, the holder of the restricted stock has voting rights and is entitled to receive all dividends and other distributions paid with respect to the stock. Restricted stock awards may be issued from previously acquired treasury shares. The Company expenses the cost of restricted stock awards over the vesting period based on the fair value of the award at the date of grant.

A summary of the Company’s restricted stock activity and related information follows (shares in thousands):


	Year Ended
	December 26, 2024			December 28, 2023			December 29, 2022
	Shares	Weighted- Average Fair Value		Shares	Weighted- Average Fair Value		Shares	Weighted- Average Fair Value
Outstanding at beginning of period	238	$	17.41	212	$	21.07	357	$	23.32
Granted	476	15.18		107	15.68		100	17.63
Vested	(47)	21.37		(81)	23.77		(242)	22.95
Forfeited	—	—		—	—		(3)	22.93
Outstanding at end of period	667	$	15.54	238	$	17.41	212	$	21.07

As of December 26, 2024, total remaining unearned compensation cost related to restricted stock was $4,565, which will be amortized over the weighted-average remaining service period of 2.9 years.

Restricted Stock Units

Restricted stock units (RSUs) cumulatively vest 50% after two years of the grant date and 100% after three years of the grant date. RSU awards are payable in common stock upon vesting. The Company expenses the cost of RSU awards over the vesting period based on the fair value of the awards at the date of grant.

A summary of the Company’s RSU activity and related information follows (shares in thousands):


	RSUs
	Shares	Weighted- Average Fair Value
December 28, 2023	—	$	—
Granted	52	14.79
Vested	(5)	14.84
Forfeited	—	—
December 26, 2024	47	$	14.79

As of December 26, 2024, total remaining unearned compensation cost related to RSUs was $500, which will be amortized over the weighted-average remaining service period of 2.2 years.

Performance Stock Units

Performance stock units (PSUs) vest subject to the Company’s achievement of performance goals expressed in terms of (i) earnings before interest, taxes, depreciation and amortization, or EBITDA, growth rate ranking relative to the Russell 2000 Index with respect to 25% of the total number of performance stock unit awards, and (ii) the Company’s average return on invested capital, or ROIC, ranking relative to the Russell 2000 Index with respect to 75% of the total number of performance stock unit awards. For grants awarded in fiscal 2024, the PSU performance goals relate to the three-year performance period from fiscal 2024-2026. PSU awards are payable at the end of their respective performance period in common stock, and the number of PSUs awarded can range from zero to 150% depending on the Company’s achievement of the relative performance metrics. The Company expenses the cost of PSU awards based on the fair value of the awards at the date of grant and the estimated achievement of the performance metric, ratable over the performance period of three fiscal years.

A summary of the Company’s PSU activity and related information follows (shares in thousands):


	PSUs
	Shares	Weighted- Average Fair Value
December 28, 2023	—	$	—
Granted	143	14.84
Vested	—	—
Forfeited	(4)	14.84
December 26, 2024	139	$	14.84

As of December 26, 2024, total remaining unearned compensation cost related to PSUs was $1,375, which will be amortized over the weighted-average remaining service period of 2.0 years.