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Employee Benefit Plans
12 Months Ended
Jun. 03, 2023
Employee Benefit Plans [Abstract]  
Employee Benefit Plans
Note 9 - Employee Benefit Plans
The Company maintains a medical plan that is qualified under Section
 
401(a) of the Internal Revenue Code and is not subject to
tax under present income tax laws. The plan is funded by contributions from the Company and its employees. Under its plan, the
Company
 
self-insures
 
its
 
portion
 
of
 
medical
 
claims
 
for
 
substantially
 
all
 
full-time
 
employees. The
 
Company
 
uses
 
stop-loss
insurance
 
to
 
limit
 
its
 
portion
 
of
 
medical
 
claims
 
to
 
$
275,000
 
per
 
occurrence. The
 
Company's
 
expenses
 
including
 
accruals
 
for
incurred but not
 
reported claims were approximately
 
$
21.9
 
million, $
24.6
 
million, and $
21.7
 
million in fiscal years
 
2023, 2022,
and 2021, respectively.
 
The liability recorded
 
for incurred but
 
not reported claims
 
was $
2.9
 
million and $
2.8
 
million as of
 
June
3,
 
2023
 
and
 
May 28,
 
2022,
 
respectively
 
and
 
are classified
 
within
 
“Accrued
 
expenses
 
and
 
other
 
liabilities”
 
in
 
the
 
Company’s
Consolidated Balance Sheets.
The Company
 
has a KSOP
 
plan that
 
covers substantially
 
all employees
 
(the “Plan”). The
 
Company makes
 
contributions to
 
the
Plan at a rate of
3
% of participants eligible compensation, plus an additional amount determined at the discretion of the Board of
Directors. Contributions
 
can be
 
made
 
in cash
 
or
 
the Company’s
 
Common
 
Stock,
 
and vest
 
immediately. The
 
Company’s
 
cash
contributions to the Plan were $
4.3
 
million, $
3.9
 
million, and $
3.8
 
million in fiscal years 2023, 2022 and 2021, respectively. The
Company did
no
t make direct contributions of the Company’s
 
Common Stock in fiscal years 2023, 2022, or 2021. Dividends on
the Company’s Common Stock are paid to the Plan in cash. The Plan acquires the Company’s Common Stock, which is listed on
the NASDAQ, by
 
using the dividends
 
and the Company’s
 
cash contribution to
 
purchase shares in
 
the public markets.
 
The Plan
sells Common Stock on the NASDAQ to pay benefits to Plan participants. Participants may make contributions to the Plan up to
the maximum allowed by the Internal Revenue Service regulations.
 
The Company does not match participant contributions.
Deferred Compensation Plans
The
 
Company
 
has
 
deferred
 
compensation
 
agreements
 
with
 
certain
 
officers
 
for
 
payments
 
to
 
be
 
made
 
over
 
specified
 
periods
beginning when the officers
 
reach age
65
 
or over as specified in the
 
agreements. Amounts accrued for the
 
agreements are based
upon
 
deferred
 
compensation
 
earned
 
over
 
the
 
estimated
 
remaining
 
service
 
period
 
of
 
each officer.
 
Payments
 
made
 
under
 
these
agreements
 
were
 
$
170
 
thousand in
 
fiscal
 
years
 
2023,
 
2022
 
and
 
2021. The
 
liability
 
recorded
 
related
 
to
 
these
 
agreements
 
was
$
1.0
 
million
 
and
 
$
1.1
 
million
 
at
 
June
 
3,
 
2023
 
and
 
May
 
28,
 
2022,
 
respectively
 
and
 
are
 
classified
 
within
 
“Other
 
noncurrent
liabilities” in the Company’s Consolidated
 
Balance Sheets.
The
 
Company
 
sponsors
 
an
 
unfunded,
 
non-qualified
 
deferred
 
compensation
 
plan,
 
which
 
was
 
amended
 
and
 
restated
 
effective
December 1, 2021 (the “Amended DC Plan”) to expand eligibility for participation from named officers only to a select group of
management or highly
 
compensated employees of
 
the Company,
 
expand the investment options
 
available and add the
 
ability of
participants
 
to
 
make
 
elective
 
deferrals.
 
Participants
 
may
 
be
 
awarded
 
long-term
 
incentive
 
contributions
 
(“Awards”)
 
under
 
the
Amended DC Plan.
 
Awards
 
vest on December 31
st
 
of the fifth year
 
after such contribution is
 
credited to the
 
Amended DC Plan
or, if earlier, the participant’s attainment of age
60
 
with
5
 
years of service. Awards issued under the Amended DC
 
Plan were $
388
thousand, $
340
 
thousand, and $
279
 
thousand in fiscal
 
2023, 2022,
 
and 2021, respectively.
 
Payments made
 
under the
 
Amended
DC Plan were $
410
 
thousand, $
480
 
thousand and $
55
 
thousand in fiscal 2023,
 
2022 and 2021, respectively. The liability recorded
for the Amended DC Plan was $
4.6
 
million, $
4.5
 
million and $
4.1
 
million at June 3, 2023, May 28, 2022 and 2021, respectively
and is classified within “Other noncurrent liabilities” in the Company’s
 
Consolidated Balance Sheets.
Deferred compensation expense for
 
both plans totaled $
346
 
thousand, $
258
 
thousand and $
1.6
 
million in fiscal 2023, 2022,
 
and
2021,
 
respectively.
Other Postretirement Employee Benefits
The Company
 
maintains an
 
unfunded postretirement
 
medical plan to
 
provide limited
 
health benefits to
 
certain qualified
 
retired
employees
 
and officers.
 
Retired non-officers
 
and
 
spouses are
 
eligible for
 
coverage
 
until attainment
 
of Medicare
 
eligibility,
 
at
which time coverage
 
ceases. Retired officers
 
and spouses
 
are eligible for
 
lifetime benefits under
 
the plan. Officers,
 
who retired
prior to May 1, 2012 and their spouses must participate in Medicare
 
Plans A and B. Officers, who retire on or after May 1, 2012
and their spouses must participate in Medicare Plans A, B, and D.
 
The plan is accounted for
 
in accordance with ASC
 
715, Compensation – Retirement Benefits (“ASC
 
715”), whereby an employer
recognizes the funded status of a defined benefit postretirement plan as
 
an asset or liability, and recognizes changes in the funded
status in the year the change occurs through comprehensive income. Additionally,
 
this expense is recognized on an accrual basis
over the employees’ approximate period of employment. The liability associated with the plan was $
2.7
 
million and $
3.4
 
million
at
 
June
 
3,
 
2023
 
and
 
May
 
28,
 
2022,
 
respectively. The
 
remaining
 
disclosures
 
associated
 
with
 
ASC
 
715
 
are
 
immaterial
 
to
 
the
Company’s financial statements.
Effective
 
March 1,
 
2023,
 
the Company
 
adopted
 
a non-qualified
 
supplemental
 
executive retirement
 
plan
 
(“SERP”) and
 
a split
dollar life insurance plan (“Split Dollar Plan”) designed
 
to provide deferred compensation and a pre-retirement
 
death benefit for
a
 
select
 
group
 
of
 
management
 
or
 
highly
 
compensated
 
employees
 
of
 
the
 
Company.
 
Provided
 
the
 
vesting
 
conditions
 
are
 
met,
participants in the SERP are eligible to receive an aggregate retirement benefit of $
500,000
, which is paid in annual installments
of $
50,000
 
for
10 years
. A participant
 
becomes vested in
 
the retirement benefit
 
over
five years
 
of plan participation
 
at
20
% per
year. If a participant becomes disabled, attains the retirement age of 65, or the Company experiences a change in control, vesting
will be
 
accelerated to
100
%. If
 
a participant
 
dies while
 
employed, he
 
or she
 
will not
 
receive any
 
benefits under
 
the SERP,
 
but
their beneficiaries
 
will instead be
 
entitled to the
 
life insurance benefit
 
provided under
 
the Split Dollar
 
Plan, which
 
is $500,000.
 
The liability recorded
 
for these plans was
 
$
63
 
thousand at June 3,
 
2023 and is classified
 
within “Other noncurrent
 
liabilities” in
the Company’s Consolidated Balance
 
Sheets.