C.	Net Income per Share

The Company calculates net income per share using the two-class method which requires the Company to allocate net income to its Class A Common Shares, Class B Common Shares and unvested share-based payment awards that participate in dividends with common stock, in the calculation of net income per share.

The Class A Common Stock has no voting rights, except (1) as required by law, (2) for the election of Class A Directors, and (3) that the approval of the holders of the Class A Common Stock is required for (a) certain future authorizations or issuances of additional securities which have rights senior to Class A Common Stock, (b) certain alterations of rights or terms of the Class A or Class B Common Stock as set forth in the Articles of Organization of the Company, (c) other amendments of the Articles of Organization of the Company, (d) certain mergers or consolidations with, or acquisitions of, other entities, and (e) sales or dispositions of any significant portion of the Company’s assets.

The Class B Common Stock has full voting rights, including the right to (1) elect a majority of the members of the Company’s Board of Directors and (2) approve all (a) amendments to the Company’s Articles of Organization, (b) mergers or consolidations with, or acquisitions of, other entities, (c) sales or dispositions of any significant portion of the Company’s assets, and (d) equity-based and other executive compensation and other significant corporate matters. The Company’s Class B Common Stock is not listed for trading. Each share of the Class B Common Stock is freely convertible into one share of Class A Common Stock, upon request of any Class B holder, and participates equally in dividends.

The Company’s unvested share-based payment awards include unvested shares (1) issued under the Company’s investment share purchase program which permits employees who have been with the Company for at least one year to purchase shares of Class A Common Stock and to purchase those shares at a discount ranging from 20% to 40% below market value based on years of employment starting after two years of employment, and (2) awarded as restricted stock awards at the discretion of the Company’s Board of Directors. The investment shares and restricted stock awards generally vest over five years in equal number of shares. The unvested shares participate equally in dividends. See Note I for a discussion of the current year unvested stock awards and issuances.

Included in the computation of net income per diluted common share are dilutive outstanding stock options that are vested or expected to vest. At its discretion, the Board of Directors grants stock options to senior management and certain key employees. The terms of the employee stock options are determined by the Board of Directors at the time of grant. To date, stock options granted to employees vest over various service periods and/or based on the attainment of certain performance criteria and generally expire after ten years. The Company also grants stock options to its non-employee directors upon election or re-election to the Board of Directors. The number of option shares granted to non-employee directors is calculated based on a defined formula and these stock options vest immediately upon grant and expire after ten years.

Net Income per Common Share - Basic

The following table sets forth the computation of basic net income per share using the two-class method:


	Thirteen weeks ended				Twenty-six weeks ended
	June 27.		June 28,		June 27.		June 28,
	2015		2014		2015		2014
	(in thousands, except per share data)				(in thousands, except per share data)
Net Income	$	29,932	$	25,428	$	43,675	$	33,743

Allocation of net income for basic:
Class A Common Stock	$	21,870	$	17,935	$	31,740	$	23,600
Class B Common Stock		7,923		7,353		11,729		9,955
Unvested participating shares		139		140		206		188

	$	29,932	$	25,428	$	43,675	$	33,743

Weighted average number of shares for basic:
Class A Common Stock		9,748		9,196		9,673		9,097
Class B Common Stock*		3,532		3,770		3,575		3,837
Unvested participating shares		62		72		63		73

		13,342		13,038		13,311		13,007
Net income per share for basic:
Class A Common Stock	$	2.24	$	1.95	$	3.28	$	2.59

Class B Common Stock	$	2.24	$	1.95	$	3.28	$	2.59

*	Change in Class B Common Stock resulted from the conversion of 150,000 shares to Class A Common Stock on May 6, 2015, with the 26-week number of shares reflecting the weighted average for the period.

Net Income per Common Share - Diluted

The Company calculates diluted net income per share for common stock using the more dilutive of (1) the treasury stock method, or (2) the two-class method, which assumes the participating securities are not exercised.

The following table sets forth the computation of diluted net income per share, assuming the conversion of all Class B Common Stock into Class A Common Stock and using the two-class method for unvested participating shares:


	Thirteen weeks ended June 27,						Thirteen weeks ended June 28,
	2015						2014
	Earnings to						Earnings to
	Common		Common				Common		Common
	Shareholders		Shares		EPS		Shareholders		Shares		EPS
	(in thousands, except per share data)
As reported - basic	$	21,870		9,748	$	2.24	$	17,935		9,196	$	1.95
Add: effect of dilutive potential common shares
Share-based awards		—		387				—		520
Class B Common Stock		7,923		3,532				7,353		3,770
Net effect of unvested particpating shares		4		—				5		—

Net income per common share - diluted	$	29,797		13,667	$	2.18	$	25,293		13,486	$	1.88


	Twenty-six weeks ended June 27,						Twenty-six weeks ended June 28,
	2015						2014
	Earnings to						Earnings to
	Common		Common				Common		Common
	Shareholders		Shares		EPS		Shareholders		Shares		EPS
	(in thousands, except per share data)
As reported - basic	$	31,740		9,673	$	3.28	$	23,600		9,097	$	2.59
Add: effect of dilutive potential common shares
Share-based awards		—		402				—		527
Class B Common Stock		11,729		3,575				9,955		3,837
Net effect of unvested particpating shares		6		—				7		—

Net income per common share - diluted	$	43,475		13,650	$	3.18	$	33,562		13,461	$	2.49

During the thirteen and twenty-six weeks ended June 27, 2015, weighted-average stock options to purchase approximately 6,000 and 5,000 shares, respectively, of Class A Common Stock were outstanding but not included in computing diluted income per common share because their effects were anti-dilutive. During the thirteen and twenty-six weeks ended June 28, 2014, weighted-average stock options to purchase approximately 2,000 and 1,000 shares, respectively, of Class A Common Stock were outstanding but not included in computing diluted income per common share because their effects were anti-dilutive. Additionally, performance-based stock options to purchase 37,000 and 47,000 shares of Class A Common Stock were outstanding as of June 27, 2015 and June 28, 2014, respectively, but not included in computing diluted income per common share because the performance criteria of these stock options was not met as of the end of the reporting period.

Of the performance-based stock options to purchase 37,000 shares of Class A Common Stock that were excluded from computing diluted net income per common share as of June 27, 2015, 30,000 shares were granted in 2009 to two key employees. The vesting of these shares requires annual depletions, or sales by distributors to retailers, of certain of the Company’s brands to attain various thresholds during the period from 2015 to 2018. The remaining 7,000 shares were granted in 2015 to executive officers and the vesting of these shares requires annual depletions to attain various thresholds during 2015.

On January 1, 2008, the Company granted the Chief Executive Officer a stock option to purchase 753,864 shares of its Class A Common Stock, which vests over a five-year period, commencing on January 1, 2014, at the rate of 20% per year. The exercise price is determined by multiplying $42.00 by the aggregate change in the DJ Wilshire 5000 Index from and after January 1, 2008 through the close of business on the trading date next preceding each date on which the option is exercised. The exercise price will not be less than $37.65 per share and the excess of the fair value of the Company’s Class A Common Stock cannot exceed $70 per share over the exercise price. At June 27, 2015 and June 28, 2014, 452,319 shares and 603,092 shares of the stock option remained outstanding, respectively. If the outstanding shares at June 27, 2015 were exercised on that date, the exercise price would have been $167.62 per share. If the outstanding shares at June 28, 2014 were exercised on that date, the exercise price would have been $152.33 per share.