Note 6 - Stock-based Compensation

3 Months Ended

May. 31, 2015

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

STOCK-BASED COMPENSATION

As of May 31, 2015, 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.

On March 2, 2015, the Company granted options to purchase 171,100 shares of common stock to certain of its employees. The future compensation expense to be recognized in earnings before income taxes was $1,168 and will be recorded on a straight-line basis over the remaining requisite service period. The weighted average fair value of the granted options was estimated to be $7.56 per share using the Black-Scholes option pricing model with the following assumptions: risk free interest rate of 1.68% - 1.75%; expected volatility factors of 28.73% - 31.71%; expected dividend yield of 1.84%; and estimated option terms of 5.3 - 7.9 years.

The risk-free interest rates were 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 were based on historical volatility of the Company’s common stock. The expected dividend yields were 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 2016 fiscal year. The estimated terms of the options were based on evaluations of the historical and expected future employee exercise behavior.

The following is a summary of option activity for the 13 weeks ended May 31, 2015:

	Outstanding Options			Weighted Average Exercise Price
Balance, March 1, 2015		966,692		$	22.55
Granted		171,100			21.71
Exercised		(2,500	)		19.91
Terminated or expired		(750	)		23.28
Balance, May 31, 2015		1,134,542		$	22.43
Vested and exercisable, May 31, 2015		692,283		$	22.22