STOCK-BASED COMPENSATION AND STOCK OWNERSHIP PLANS

The Company’s current stock ownership plans provide for issuance of options to acquire shares of Class A common stock by key executives and non-employee directors. Current plans also allow for issuance of shares of restricted stock, restricted stock units or stock appreciation rights in lieu of options.

Under the Company’s 2010 Long-Term Stock Incentive Plan and the 2012 Non-Employee Director Stock Ownership Plan there were 612,570 shares of the Company’s Class A common stock available for grant to key executives and non-employee directors at September 29, 2017. Shares issued pursuant to the exercise of stock options or grants of restricted stock are typically issued first out of treasury stock to the extent that treasury shares are available.

The Company recognized tax benefits from the exercise of stock options and the vesting of restricted stock of $404, $112 and $482 for 2017, 2016 and 2015, respectively. In 2017, this amount was recorded as a component of income tax expense. In 2016 and 2015, these amounts were recorded as increases in additional paid-in capital on the consolidated balance sheets and as cash from financing activities on the consolidated statements of cash flows. The Company recognizes forfeitures of equity awards as incurred.

Stock Options

All stock options have been granted at a price not less than fair market value at the date of grant and are currently exercisable. Stock options generally have a term of 10 years.

All of the Company’s stock options outstanding are fully vested, with no further compensation expense to be recorded. There were no grants of stock options in 2017, 2016 or 2015. There were no stock options outstanding during 2017 or 2016.

The intrinsic values of the stock received upon exercise of such options at their date of exercise during 2017, 2016 and 2015 were $0, $0 and $221, respectively.

The Company received cash proceeds from stock option exercises totaling $0, $0 and $118 for the years ending September 29, 2017, September 30, 2016 and October 2, 2015, respectively.

Non-Vested Stock

All shares of non-vested stock awarded by the Company have been granted at their fair market value on the date of grant and vest within five years after the grant date. The fair value at date of grant is based on the number of shares granted and the average of the Company’s high and low Class A common stock price on the date of grant or, if the Company’s shares did not trade on the date of grant, the average of the Company’s high and low Class A common stock price on the last preceding date on which the Company’s shares traded.

A summary of non-vested stock activity for the two year period ended September 29, 2017 related to the Company’s stock ownership plans is as follows:



	Shares		Weighted Average Grant Price
Non-vested stock at October 2, 2015	214,027		$	21.43
Non-vested stock grants	54,850		24.16
Non-vested stock forfeited	(7,885	)	18.52
Restricted stock vested	(98,520	)	19.18
Non-vested stock at September 30, 2016	162,472		24.49
Non-vested stock grants	8,846		43.12
Restricted stock vested	(76,250	)	20.54
Non-vested stock September 29, 2017	95,068		27.68

Non-vested stock grantees may elect to reimburse the Company for withholding taxes due as a result of the vesting of shares by tendering a portion of the vested shares back to the Company. Shares tendered back to the Company were 17,832 and 19,973 during 2017 and 2016, respectively. The fair value of restricted stock vested during 2017, 2016 and 2015 was approximately $3,219, $2,348 and $3,294, respectively.

Stock compensation expense, net of forfeitures, related to non-vested stock was $941, $1,252 and $1,287 during 2017, 2016 and 2015, respectively. The tax benefit recognized during 2017, 2016 and 2015 related to stock based compensation was $358, $476 and $598, respectively. Unrecognized compensation cost related to non-vested stock as of September 29, 2017 was $733, which amount will be amortized to expense through November 2021 or adjusted for changes in future estimated or actual forfeitures.

Restricted Stock Units

All restricted stock units awarded by the Company during fiscal 2017 and in prior years have been granted at their fair market value on the date of grant. The fair value at date of grant is based on the number of units granted and the average of the Company’s high and low Class A common stock trading price on the date of grant or, if the Company’s shares did not trade on the date of grant, the average of the Company’s high and low Class A common stock trading price on the last preceding date on which the Company’s shares traded. The vesting period for RSUs is generally one year from the date of grant for RSUs granted to directors and three years from the date of the grant for RSUs granted to employees.

A summary of RSU activity follows:



	Number of RSUs		Weighted Average Grant Price
RSUs at October 2, 2015	7,336		$	33.40
RSUs granted	48,456		23.64
RSUs forfeited	(2,045	)	24.16
RSUs vested	(7,336	)	33.40
RSUs at September 30, 2016	46,411		23.62
RSUs granted	28,301		40.64
RSUs vested	(14,070	)	22.39
RSUs at September 29, 2017	60,642		31.85

Stock compensation expense, net of forfeitures, related to restricted stock units was $1,011, $547 and $286 for the years ended September 29, 2017, September 30, 2016 and October 2, 2015, respectively. Unrecognized compensation cost related to non-vested restricted stock units as of September 29, 2017 was $791, which amount will be amortized to expense through September 2019 or adjusted for changes in future estimated or actual forfeitures.

Compensation expense related to units earned by employees is based upon the attainment of certain financial goals related to cumulative net sales and cumulative operating profit over a three-year performance period. Awards are only paid if at least 80% of the target levels are met and maximum payouts are made if 120% of more of target levels are achieved. The payouts for achievement of the threshold levels of performance are equal to 50% of the target award amount. The payouts for achievement of maximum levels of performance are equal to 150% of the target award amount. To the extent earned, awards are issued in shares of Company common stock after the end of the three year performance period.

Employee Stock Purchase Plan

The 2009 Employees’ Stock Purchase Plan (the “Purchase Plan”) provides for the issuance of shares of Class A common stock at a purchase price of not less than 85% of the fair market value of such shares on the date of grant or at the end of the offering period, whichever is lower.

The Company issued 1,414, 7,732 and 8,062 shares of Class A common stock under the Purchase Plan during the years 2017, 2016 and 2015, respectively, and recognized expense of $34, $33 and $33 in 2017, 2016 and 2015, respectively.