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Note 6 - Share-based Compensation and Post-retirement Benefits
 3 Months Ended
Dec. 24, 2022
Notes to Financial Statements  
Share-Based Payment Arrangement [Text Block]

Note 6

Share-Based Compensation and Post-Retirement Benefits

 

At December 24, 2022, the Company has three stock-based employee compensation plans. Share-based compensation expense was recognized as follows:

 

   

Three months ended

  
   

December 24,

    

December 25,

  
   

2022

    

2021

  
   

(in thousands)

  
                 
                 

Stock options

   $ 620     $ 814  

Stock purchase plan

     227       60  

Stock issued to an outside director

     -       11  

Service share units issued to employees

     181       72  

Performance share units issued to employees

     72       39  

Total share-based compensation

   $ 1,100     $ 996  
                 

The above compensation is net of tax benefits

   $ 139     $ 87  

 

 

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 three months ended December 24, 2022 or during the three months ended December 25, 2021.

 

During the three months ended December 24, 2022, the Company issued 9,900 service share units (“RSU”)’s. Each RSU entitles the awardee to one share of common stock upon vesting. During the three months ended December 25, 2021, the Company issued 8,873 service share units (“RSU”)’s. The fair value of the RSU’s was determined based upon the closing price of the Company’s common stock on the date of grant.

 

During the three months ended December 24, 2022, the Company also issued 18,641 performance share units (“PSU”)’s. 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 three months ended December 25, 2021, the Company issued 8,868 performance share units (“PSU”)’s.