Note 6 - Share-based Compensation and Post-retirement Benefits

9 Months Ended

Jun. 24, 2023

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

Note 6 Share-Based Compensation and Post-Retirement Benefits

At June 24, 2023, the Company has two stock-based employee compensation plans. Share-based compensation expense was recognized as follows:

	Three months ended				Nine months ended
	June 24,		June 25,		June 24,		June 25,
	2023		2022		2023		2022
	(in thousands)				(in thousands)
Stock options	$	449	$	693	$	1,628	$	2,115
Stock purchase plan		118		90		542		240
Stock issued to outside directors		39		-		66		-
Restricted stock issued to employees		295		152		669		376
Performance stock issued to employees		177		83		420		204
Total share-based compensation	$	1,078	$	1,018	$	3,325	$	2,935
The above compensation is net of tax benefits	$	305	$	116	$	610	$	549

The fair value of each option grant is estimated on the date of grant using the Black-Scholes options-pricing model.

Expected volatility is based on the historical volatility of the price of our common shares over the past 51 months for 5-year options and 10 years for 10-year options. We use historical information to estimate expected life and forfeitures within the valuation model. The expected term of awards represents the period of time that options granted are expected to be outstanding. The risk-free rate for periods within the expected life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. Compensation cost is recognized using a straight-line method over the vesting or service period and is net of estimated forfeitures.

The Company did not grant any stock options during the nine months ended June 24, 2023.

During the fiscal year 2022 nine-month period ending June 25, 2022, the Company granted 115,700 stock options. The weighted-average grant date fair value of these options was $23.36.

The Company issued 11,964 service share units (“RSU”)’s in the three months ended June 24, 2023, and 21,864 RSU’s in the nine months ended June 24, 2023. Each RSU entitles the awardee to one share of common stock upon vesting. The fair value of RSU’s was determined based upon the closing price of the Company’s common stock on the date of grant. The Company issued 327 RSU’s in the three months ended June 25, 2022, and 9,200 RSU’s in the nine months ended June 25, 2022.

The Company issued 2,619 performance share units (“PSU”)’s in the three months ended June 24, 2023, and 21,260 PSU’s in the nine months ended June 24, 2023. Each PSU may result in the issuance of up to two shares of common stock upon vesting, dependent upon the level of achievement of the applicable Performance Goal. The fair value of the PSU’s was determined based upon the closing price of the Company’s common stock on the date of grant. Additionally, the Company applies a quarterly probability assessment in computing this non-cash compensation expense, and any change in estimate is reflected as a cumulative adjustment to expense in the quarter of the change. During the nine months ended June 25, 2022, the Company issued 8,868 PSU’s. No such PSU’s were issued in the three months ended June 25, 2022.