Note 5 - Stock-Based Compensation

12 Months Ended

Mar. 02, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

5. STOCK-BASED COMPENSATION

As of March 2, 2014, the Company had a 2002 Stock Option Plan (the “Plan”), and no other stock-based compensation plan. The Plan has been approved by the Company’s shareholders and provides for the grant of stock options to directors and key employees of the Company. All options granted under the Plan have exercise prices equal to the fair market value of the underlying common stock of the Company at the time of grant, which, pursuant to the terms of the Plan, is the reported closing price of the common stock on the New York Stock Exchange on the date preceding the date the option is granted. Options granted under the Plan become exercisable 25% one year after the date of grant, with an additional 25% exercisable each succeeding anniversary of the date of grant, and expire 10 years after the date of grant. Options to purchase a total of 1,800,000 shares of common stock were authorized for grant under the Plan. At March 2, 2014, 1,548,330 shares of common stock of the Company were reserved for issuance upon exercise of stock options under the Plan, and 467,213 options were available for future grant under the Plan.

The compensation expense for stock options includes an estimate for forfeitures and is recognized on a straight line basis over the requisite service period.

The future compensation expense to be recognized in earnings before income taxes for options outstanding at March 2, 2014 was $3,227, which is expected to be recognized ratably over a weighted average vesting period of 2.06 years.

The Company records its stock-based compensation at fair value. The weighted average fair value for options was estimated at the dates of grants, using the Black-Scholes option pricing model. The following table represents the weighted average fair value and valuation assumptions used for options granted in the 2014, 2013 and 2012 fiscal years:

	Fiscal Year
	2014			2013			2012
Weighted average fair value of option grants		$8.79			$8.56			$6.96
Risk-free interest rates	1.64	-	2.15%	1.50	-	1.80%		1.90%
Expected stock price volatility	32.80	-	34.00%	35.02	-	37.06%		35.40%
Expected dividend yields	1.46	-	1.67%	1.54	-	1.65%	1.50	-	1.80%
Estimated option terms (years)	6.1	-	8.1	5.7	-	6.9	5.4	-	6.5

The risk-free interest rates are based on U.S. Treasury rates at the date of grant with maturity dates approximately equal to the estimated term of the options at the date of the grant. Volatility factors are based on historical volatility of the Company’s common stock. The expected dividend yields are based on the regular quarterly cash dividend per share most recently declared by the Company and on the exercise price of the options granted during the 2014 fiscal year. The estimated terms of the options are based on evaluations of the historical and expected future employee exercise behavior.

During the fourth quarter of the 2014 fiscal year, the Company’s Board of Directors approved a reduction of $2.50 per share in the exercise price of all outstanding options as a result of the special cash dividend of $2.50 per share paid by the Company in February 2014. The reduction in the exercise price was treated as a modification of the stock options for accounting purposes. The modification, based on the fair value of the options both immediately before and after the modification, resulted in a total of incremental compensation expense of $731 during the 2014 fiscal year, which was recorded in selling, general and administrative expenses.

Information with respect to stock option activity follows:

	Outstanding Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Balance, February 27, 2011		802,089		$	26.05
Granted		198,750			22.53
Exercised		(73,412	)		24.65
Terminated or expired		(11,476	)		25.75
Balance, February 26, 2012		915,951		$	25.40
Granted		205,520			25.60
Exercised		(35,987	)		21.16
Terminated or expired		(107,701	)		25.91
Balance, March 3, 2013		977,783		$	25.54
Granted		193,600			27.20
Exercised		(51,266	)		23.44
Terminated or expired		(39,000	)		26.07
Granted under option modification		902,517			23.13
Cancelled under option modification		(902,517	)		25.63
Balance, March 2, 2014		1,081,117		$	23.84		6.09	$	5,029
Exercisable, March 2, 2014		664,329		$	23.46		4.26	$	3,343

The aggregate intrinsic values realized (the market value of the underlying shares on the date of exercise, less the exercise price, times the number of shares acquired) from the exercise of options during the 2014, 2013 and 2012 fiscal years were $249, $227 and $402, respectively.

A summary of the status of the Company’s non-vested options at March 2, 2014, and changes during the fiscal year then ended, is presented below:

	Shares Subject to Options			Weighted Average Grant Date Fair Value
Nonvested, beginning of year		363,708		$	8.07
Granted		193,600			8.79
Vested		(122,422	)		8.08
Terminated or expired		(18,098	)		7.81
Nonvested, end of year		416,788		$	8.41