Note 6 - Capital Stock and Transactions With Related Parties

12 Months Ended

May 03, 2025

Notes to Financial Statements

Equity [Text Block]

6. CAPITAL STOCK AND TRANSACTIONS WITH RELATED PARTIES

The Company paid a special cash dividend of $3.25 per share on Common Stock aggregating $304.1 million on July 24, 2024.

The Company is a party to a management agreement with Corporate Management Advisors, Inc. (CMA), a corporation owned by its Chairman and Chief Executive Officer. This agreement was originated in 1991 for the efficient use of management of two public companies at the time.

Under the terms of the agreement, CMA provides, subject to the direction and supervision of the Board of Directors of the Company, (i) senior corporate functions (including supervision of the Company’s financial, legal, executive recruitment, internal audit and information systems departments) as well as the services of a Chief Executive Officer and Chief Financial Officer and (ii) services in connection with acquisitions, dispositions and financings by the Company, including identifying and profiling acquisition candidates, negotiating and structuring potential transactions and arranging financing for any such transaction. CMA, through its personnel, also provides, to the extent possible, the stimulus and creativity to develop an innovative and dynamic persona for the Company, its products and corporate image. In order to fulfill its obligations under the management agreement, CMA employs numerous individuals, who, acting as a unit, provide management, administrative and creative functions for the Company.

CMA and the Company are joint owners of a corporate aircraft and pursuant to a joint ownership agreement, each party agreed to pay certain expenses associated with the use of the aircraft. During the past three years, the joint operating costs have averaged approximately $1.1 million per year.

The management agreement provides that the Company will pay CMA an annual base fee equal to one percent of the consolidated net sales of the Company and further provides that the Compensation and Stock Option Committee and the Board of Directors may from time-to-time award additional incentive compensation to CMA or its personnel. The Board of Directors on various occasions contemplated incentive compensation to CMA, however, since the inception of this agreement, no incentive compensation has been paid. The Company incurred management fees to CMA of $12.0 million, $11.9 million and $11.7 million for Fiscal 2025, Fiscal 2024 and Fiscal 2023, respectively, which are recorded in general and administrative expenses. At May 3, 2025 and April 27, 2024, accounts payable included amounts due to CMA of $2.1 million and $3.0 million, respectively.