Common and Preferred Stock

12 Months Ended

Dec. 30, 2023

Stockholders' Equity Note [Abstract]

Common and Preferred Stock

COMMON AND PREFERRED STOCK

(a)    Shares Authorized

At December 30, 2023 and December 31, 2022, the company had 95,000,000 authorized shares of common stock and 2,000,000 authorized shares of non-voting preferred stock.

(b)    Treasury Stock

In November 2017, the company's Board of Directors approved a stock repurchase program authorizing the company to repurchase in the aggregate up to 2,500,000 shares of its outstanding common stock. In May 2022, the company's Board of Directors approved the company to repurchase an additional 2,500,000 shares of its outstanding common stock under the current program. During 2022, the company repurchased 1,553,961 shares of its common stock under the program for $249.0 million, including applicable commissions, which represented an average price of $160.27. During 2023, the company repurchased 397,738 shares of its common stock under the program for $55.6 million, including applicable commissions and excise tax, which represented an average price of $139.68. As of December 30, 2023, 3,116,364 shares had been purchased under the 2017 stock repurchase program and 1,883,636 remain authorized for repurchase.

The company also treats shares withheld for tax purposes on behalf of employees in connection with the vesting of restricted share grants as common stock repurchases because they reduce the number of shares that would have been issued upon vesting. During 2022, the company repurchased 90,243 shares of its common stock that were surrendered to the company for withholding taxes related to restricted stock vestings for $15.8 million. During 2023, the company repurchased 126,704 shares of its common stock that were surrendered to the company for withholding taxes related to restricted stock vestings for $19.8 million.   

(c)    Share-Based Awards

The company maintains an incentive plan under which the company's Board of Directors grants share-based awards to key employees. On May 10, 2021, the 2021 Stock Incentive Plan (the "2021 Plan") was approved, which included a maximum amount of 1,350,000 shares allowed to be awarded plus the shares remaining for future grants under the 2011 Stock Incentive Plan (the "2011 Plan") as of the approval date and any shares outstanding that are subsequently forfeited or expired. Thus, no further shares are available to grant under the 2011 Plan and the maximum amount of shares available for future grants under the 2021 Plan as of December 30, 2023 is 987,922.

Non-cash share-based compensation of $51.0 million, $58.4 million and $42.3 million was recognized for fiscal 2023, 2022 and 2021, respectively, associated with restricted share grants and restricted stock units. The company recorded a related tax benefit of $0.8 million, $1.3 million and less than $0.4 million in fiscal 2023, 2022 and 2021, respectively.

Restricted share grants:

The company has issued restricted share grant awards, which are generally time and performance based and were not subject to market conditions. The fair value of restricted share grants represents the closing share price of the company's stock as of the date of the grant and is recognized over the vesting period of the awards. The weighted average grant date fair value was $136.13, $188.31 and $181.31 per share for restricted share grants in fiscal 2023, 2022 and 2021 respectively, which represents the closing share price of the company’s stock as of the date of grant. The approximate fair value of restricted shares vested were $0.6 million, $29.1 million, $7.3 million for fiscal 2023, 2022 and 2021, respectively.

A summary of the company’s nonvested restricted share grant activity and their corresponding fair value on the date of grant for fiscal year ended December 30, 2023 is as follows:

 

	Shares	Weighted Average Grant-Date Fair Value
Nonvested shares at December 31, 2022	14,356	$	134.43
Granted	2,080	136.13
Vested	(3,840)	188.31
Forfeited	(10,516)	114.34
Nonvested shares at December 30, 2023	2,080	$	136.13

As of December 30, 2023, there was $0.1 million of total unrecognized compensation cost related to nonvested restricted share grant compensation arrangements, if all performance conditions are fully achieved. The remaining weighted average life is 0.3 years.    

Restricted stock units:

During 2020, the company began granting restricted stock units, which entitle the holder to shares of common stock subject to time vesting and the achievement of certain market and performance goals. The fair value for time-based units are valued at the closing share price of the company’s stock as of the date of the grant and the fair value for performance units are based upon valuations using the Monte Carlo Methodology. Compensation expense is recognized over the performance measurement period of the units in accordance with ASC 718 Stock Compensation for awards with market and performance vesting conditions.

Time vesting units vest equally over two or three years and performance units vest based on achievement of certain company performance criteria over the two or three year period, as set forth in the grant agreement ranging from 0 to 200% of the target shares granted. The weighted average grant date fair value was $147.13, $150.07 and $166.41 per share for restricted stock units in fiscal 2023, 2022 and 2021, respectively. The approximate fair value of restricted stock units vested were $30.1 million for fiscal 2023.

A summary of the company’s nonvested restricted stock unit activity at target shares and their corresponding fair value on the date of grant for fiscal year ended December 30, 2023 is as follows:

	Units	Weighted Average Grant-Date Fair Value
Nonvested shares at December 31, 2022	521,455	$	157.55
Granted	333,031	147.13
Vested	(194,690)	144.11
Forfeited	(8,065)	158.33
Nonvested shares at December 30, 2023	651,731	$	160.15

As of December 30, 2023, there was $70.8 million of total unrecognized compensation cost related to nonvested restricted stock unit compensation arrangements, if all performance conditions are fully achieved. The remaining weighted average life is 1.76 years.