Shareholders' Equity (Deficit):

12 Months Ended

Dec. 25, 2021

Shareholders' Equity (Deficit):

Shareholders' Equity (Deficit):

5.     Shareholders’ Equity (Deficit):

Dividends

In 2021, the Company declared and paid quarterly cash dividends totaling $1.60 per share ($5.9 million) and a $7.50 per share special cash dividend (the “2021 Special Dividend”). The 2021 Special Dividend totaled $27.3 million and was paid by cash on hand.

In 2020, the Company declared and paid quarterly cash dividends totaling $0.80 per share ($3.0 million) and a $3.00 per share special cash dividend (the “2020 Special Dividend”). The 2020 Special Dividend totaled $11.3 million and was paid by cash on hand.

In 2019 the Company declared and paid quarterly cash dividends totaling $0.90 per share ($3.4 million).

Repurchase of Common Stock

In 2021, the Company purchased 225,839 shares of our common stock for an aggregate purchase price of $44.2 million.

In December 2019, the Company’s Board of Directors authorized the repurchase of up to 300,000 shares of our common stock for a price of $163.00 per share through a tender offer (the “2020 Tender Offer”). The 2020 Tender Offer began on the date of the announcement, December 17, 2019 and expired on January 16, 2020. Upon expiration, the Company purchased 300,000 shares for a total purchase price of approximately $49.0 million, including fees and expenses related to the Tender Offer. The 2020 Tender Offer was financed in part by net borrowings under the Line of Credit. (See Note 6 – “Debt”).

In February 2019, the Company’s Board of Directors authorized the repurchase of up to 150,000 shares of our common stock for a price of $159.63 per share through a tender offer (the “2019 Tender Offer”). The 2019 Tender Offer began on the date of the announcement, February 28, 2019 and expired March 28, 2019. Upon expiration, the Company accepted for payment 150,000 shares for a total purchase price of approximately $24.0 million, including fees and expenses related to the 2019 Tender Offer. The 2019 Tender Offer was financed in part by net borrowings under the Line of Credit. (See Note 6 – “Debt”).

Under a previous Board of Directors’ authorization, as of December 25, 2021 the Company has the ability to repurchase an additional 304,765 shares of its common stock. Repurchases may be made from time to time at prevailing prices, subject to certain restrictions on volume, pricing and timing.

Stock Option Plans and Stock-Based Compensation

The Company had authorized up to 750,000 shares of common stock for granting either nonqualified or incentive stock options to officers and key employees under the Company’s 2001 Stock Option Plan (the “2001 Plan”). The 2001 Plan expired on February 20, 2011. The Company had authorized up to 700,000 shares of common stock for granting either nonqualified or incentive stock options to officers and key employees under the Company’s 2010 Stock Option Plan (the “2010 Plan”). The 2010 Plan expired on February 24, 2020. The Company had also sponsored a Stock Option Plan for Nonemployee Directors (the “Nonemployee Directors Plan”), which had reserved a total of 350,000 shares for issuance to directors of the Company who are not employees.

At the April 29, 2020 Annual Shareholders Meeting, the Company’s shareholders approved a new stock option plan, the 2020 Stock Option Plan (the “2020 Plan”). The 2020 Plan (as described more completely in the Company’s definitive Proxy Statement filed with the United States Securities and Exchange Commission on March 10, 2020) provides for the issuance of up to 100,000 shares of common stock plus (i) the number of common stock authorized and unissued under the 2010 Plan (as of April 29, 2020, 125,465 shares), and (ii) the number of shares of common stock authorized and unissued under the Nonemployee Director Plan (as of April 29, 2020, 24,500 shares) in the form of either nonqualified or incentive stock option grants. Participants in the 2020 Plan may include employees, officers, directors, consultants and advisors of the Company.

Grants under the 2020 Plan are (as they were under the 2001 Plan, 2010 Plan and Nonemployee Directors Plan) made by the Compensation Committee of the Board of Directors at a price of not less than 100% of the fair market value on the date of grant. If an incentive stock option is granted to an individual who owns more than 10% of the voting rights of

the Company’s common stock, the option exercise price may not be less than 110% of the fair market value on the date of grant. The term of the options may not exceed 10 years, except in the case of nonqualified stock options, whereby the terms are established by the Compensation Committee. Options may be exercisable in whole or in installments, as determined by the Compensation Committee.

Stock option activity under the 2001 Plan, 2010 Plan, 2020 Plan and Nonemployee Directors Plan (collectively, the “Option Plans”) as of December 25, 2021 was as follows:

				Weighted Average
				Remaining
	Number of	Weighted Average		Contractual Life
	Shares	Exercise Price		(years)	Intrinsic Value
Outstanding, December 29, 2018	639,380	$	84.12	5.61	$	47,808,100
Granted	54,800		170.14
Exercised	(190,172)		57.41
Forfeited	(24,450)		138.13
Outstanding, December 28, 2019	479,558		101.78	5.79		45,283,200
Granted	45,100		163.87
Exercised	(108,170)		76.29
Forfeited	(23,000)		148.16
Outstanding, December 26, 2020	393,488		113.19	5.61		27,864,900
Granted	72,600		226.96
Exercised	(105,617)		78.78
Forfeited	(4,850)		158.48
Outstanding, December 25, 2021	355,621	$	146.03	6.32	$	39,320,571
Exercisable, December 25, 2021	219,266	$	114.16	4.73	$	28,004,239

The fair value of options granted under the Option Plans during 2021, 2020 and 2019 were estimated on the date of the grant using the Black-Scholes option pricing model with the following weighted average assumptions and results:

	Year Ended
	December 25, 2021			December 26, 2020			December 28, 2019
Risk free interest rate		1.13	%		0.45	%		1.85	%
Expected life (years)		6			6			6
Expected volatility		25.51	%		25.03	%		19.30	%
Dividend yield		3.13	%		2.33	%		1.38	%
Option fair value	$	37.90		$	28.25		$	30.96

The total intrinsic value of options exercised during 2021, 2020 and 2019 was $16.2 million, $8.4 million and $22.7 million, respectively. The total fair value of shares vested during 2021, 2020 and 2019 was $9.0 million, $9.1 million and $8.6 million, respectively.

All unexercised options at December 25, 2021 have an exercise price equal to the fair market value on the date of the grant.

Compensation expense of $1,435,500, $1,315,200 and $1,666,400 relating to the vested portion of the fair value of stock options granted was expensed to “Selling, General and Administrative Expenses” in 2021, 2020 and 2019, respectively. As of December 25, 2021, the Company had $4.0 million of total unrecognized compensation expense related to stock options that is expected to be recognized over the remaining weighted average vesting period of approximately 2.9 years.