Note 10 - Stock-based Compensation

12 Months Ended

Apr. 27, 2024

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

10. STOCK-BASED COMPENSATION

Our stock-based compensation program is a broad-based program designed to attract and retain personnel while also aligning participants’ interests with the interests of the shareholders.

The 1991 Omnibus Incentive Plan (the “Omnibus Plan”) provides for compensatory awards consisting of (i) stock options or stock awards for up to 9,600,000 shares of common stock, (ii) stock appreciation rights, dividend equivalents, other stock-based awards in amounts up to 9,600,000 shares of common stock and (iii) performance awards consisting of any combination of the above. The Omnibus Plan is designed to provide an incentive to officers and certain other key employees and consultants by making available to them an opportunity to acquire a proprietary interest or to increase such interest in National Beverage. The number of shares or options which may be issued under stock-based awards to an individual is limited to 3,360,000 during any year. Awards may be granted for no cash consideration or such minimal cash consideration as may be required by law. Options generally have an exercise price equal to the fair market value of our common stock on the date of grant, vest over a five-year period and expire after ten years.

The Special Stock Option Plan provides for the issuance of stock options to purchase up to an aggregate of 3,600,000 shares of common stock. Options may be granted for such consideration as determined by the Board of Directors. The vesting schedule and exercise price of these options are tied to the recipient’s ownership level of common stock, the terms generally allow for the reduction in exercise price upon each vesting period and the options generally expire after ten years. Also, the Board of Directors authorized the issuance of options to purchase up to 100,000 shares of common stock to be issued at the direction of the Chairman.

The Key Employee Equity Partnership Program (“KEEP Program”) provides for the granting of stock options to purchase up to 480,000 shares of common stock to key employees, consultants, directors and officers. Participants who purchase shares of stock in the open market receive grants of stock options equal to 50% of the number of shares purchased, up to a maximum of 12,000 shares in any two-year period. Options under the KEEP Program are forfeited in the event of the sale of shares used to acquire such options. Options are granted at an initial exercise price of 60% of the purchase price paid for the shares acquired, the exercise price reduces to the par value of the common stock at the end of the six-year vesting period and the options generally expire after ten years.

Stock options are accounted for under the fair value method of accounting using a Black-Scholes valuation model to estimate the stock option fair value at date of grant. The fair value of stock options is amortized to expense over the vesting period. The Company estimates expected forfeitures based upon historical experience. No stock options were granted in Fiscal 2024 or Fiscal 2023. In Fiscal 2022, stock options for 30,000 shares were granted with a weighted-average grant date fair value of $6.91. The weighted average Black-Scholes fair value assumptions for stock options granted in Fiscal 2022 were as follows: weighted average expected life of 6.5 years; weighted average expected volatility of 20.74%; weighted average risk-free interest rate of .82%; and expected dividend yield of 2.48%. The expected life of stock options was estimated based on historical experience.  The expected volatility was estimated based on historical stock prices for a period consistent with the expected life of stock options. The risk-free interest rate was based on the U.S. Treasury constant maturity interest rate whose term is consistent with the expected life of stock options.

The following is a summary of stock option activity for Fiscal 2024:

	Number of Shares			Price (a)
Options outstanding, beginning of year		521,300		$	18.13
Granted		-			-
Exercised		(215,000	)	$	6.12
Forfeited or cancelled		(6,400	)	$	31.49
Options outstanding, end of year		299,900		$	25.48
Options vested and exercisable, end of year		164,580		$	23.40

^(a) Weighted average exercise price.

Stock-based compensation expense was $0.9 million, $0.7 million, $0.7 million for Fiscal 2024, Fiscal 2023 and Fiscal 2022, respectively. The total income tax benefits related to stock-based compensation were $1.7 million, $0.2 million and $0.4 million for Fiscal 2024, Fiscal 2023 and Fiscal 2022, respectively. Stock-based income tax benefits realized from stock option exercises aggregated $1.5 million, $0.1 million and $0.3 million for Fiscal 2024, Fiscal 2023 and Fiscal 2022, respectively.

The total intrinsic value for stock options exercised was $9.1 million, $0.4 million and $1.4 million for Fiscal 2024, Fiscal 2023 and 2022, respectively. Cash proceeds from the exercise of stock options were $1.3 million, $0.3 million and $0.3 million for Fiscal 2024, Fiscal 2023 and Fiscal 2022, respectively.

At April 27, 2024, unrecognized compensation expense related to the unvested portion of stock options was $1.4 million, which is expected to be recognized over a remaining weighted average period of 1.6 years. The weighted average remaining contractual term and the aggregate intrinsic value for options outstanding at April 27, 2024 was 5.4 years and $5.5 million, respectively. The weighted average remaining contractual term and the aggregate intrinsic value for options exercisable at April 27, 2024 was 4.7 years and $3.3 million, respectively.