Common Stock

12 Months Ended

Mar. 03, 2012

Common Stock

10. Common Stock

At March 3, 2012, shares of the Company’s stock outstanding consisted of Class A and Class B Common Stock. Class A and Class B Common Stock have identical rights with respect to dividends and liquidation preference. However, Class A and Class B Common Stock differ with respect to voting rights, convertibility and transferability.

Holders of Class A Common Stock are entitled to one vote for each share held of record, and holders of Class B Common Stock are entitled to ten votes for each share held of record. The Class A Common Stock and the Class B Common Stock vote together as a single class on all matters submitted to a vote of shareholders (including the election of directors), except that, in the case of a proposed amendment to the Company’s Articles of Incorporation that would alter the powers, preferences or special rights of either Class A Common Stock or the Class B Common Stock, the class of Common Stock to be altered shall vote on the amendment as a separate class. Shares of Class A and Class B Common Stock do not have cumulative voting rights.

While shares of Class A Common Stock are not convertible into any other series or class of the Company’s securities, each share of Class B Common Stock is freely convertible into one share of Class A Common Stock at the option of the Class B Shareholders.

Shares of Class B Common Stock may not be transferred to third parties (except for transfer to certain family members of the holders and in other limited circumstances). All of the shares of Class B Common Stock are held by the founding shareholders, their family members, directors, officers and other key employees.

At the 2009 Annual Meeting of Shareholders of the Company held July 23, 2009 (the “Annual Meeting”), the Company’s shareholders voted to amend and restate the Company’s Restated Articles of Incorporation (as amended, the “Restated Articles”) to effect a number of amendments relating to the Company’s dual class stock structure. The main objective of the amendments effected by the Restated Articles is the transition to a more customary corporate governance structure for the Company.

The Restated Articles provide for the conversion of all outstanding high voting Class B Common Shares into Class A Common Shares as of the day after the Company’s annual shareholders’ meeting to be held in 2012 (which is currently scheduled for July 19, 2012), and eliminate the prior provision in the Company’s restated articles of incorporation which automatically converted all Class B Common Shares into Class A Common Shares on a one-to-one basis only once they constituted less than 5% of the total common shares outstanding as of a record date for an annual meeting.

The Restated Articles also contain an amendment limiting the aggregate voting power of the Company’s Class B Common Shares. Under this provision, if at any time the holders of all Class B Common Shares hold greater than 41% of the total voting power of the Company’s shares as of the record date for any shareholders’ meeting, then the number of votes per share of each holder of Class B Common Shares will automatically be reduced (on a proportionate basis) so that the holders of Class B Common Shares hold in the aggregate no more than 41% of the Company’s total voting power. The Restated Articles further provide for the automatic conversion of Class B Common Shares issued to Company employees or directors into Class A Common Shares upon each such person’s death or termination of employment or service.

On July 17, 2008, the Company’s Board of Directors authorized the 2008 stock repurchase program to repurchase up to 5,000,000 shares of the Company’s Class A common stock outstanding through December 31, 2011. Throughout the term of the 2008 stock repurchase program, the Company purchased 4,660,697 shares at an average price of $16.06 per share for an aggregate amount of $74,833,000. The 2008 stock repurchase program was terminated on July 21, 2011 and superseded by the 2011 stock repurchase program, which became effective as of the same date.

Under the 2011 stock repurchase program, the Company’s Board of Directors authorized the repurchase of up to 5,000,000 shares of the Company’s Class A common stock outstanding through December 31, 2014. Under the 2011 stock repurchase program the Company purchased 1,199,900 shares at an average price of $19.70 per share for an aggregate amount of $23,638,000 in 2012. Under both the 2008 and 2011 stock repurchase programs, the Company purchased 2,884,603 shares at an average price of $20.93 per share for an aggregate amount of $60,368,000 during 2012. As of March 3, 2012, there are 3,800,100 shares remaining available to repurchase under the 2011 stock repurchase program. As of March 3, 2012, the Company holds as treasury shares 8,043,936 shares of its Class A Common Stock at an average price of $15.94 per share for an aggregate purchase amount of $128,211,000. The treasury shares may be issued upon the exercise of employee stock options, issuance of shares for the Employee Stock Purchase Plan, issuance of restricted stock, or for other corporate purposes. Further purchases will occur from time to time as market conditions warrant and as the Company deems appropriate when judged against other alternative uses of cash.

On January 18, 2012, the Company’s Board of Directors increased its quarterly cash dividend to $0.06 per share from $0.05 per share of Class A and Class B common stock. The Company declared dividends of $10,967,000, $9,092,000 and $7,124,000 during 2012, 2011 and 2010, respectively. As of March 3, 2012 and February 26, 2011, dividends declared but not paid were $3,108,000 and $2,653,000, respectively. Further declarations of dividends remain at the discretion of the Company’s Board of Directors.