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Note 5 - Share-based Compensation and Post-retirement Benefits

6 Months Ended

Mar. 30, 2024

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

Note 5

Share-Based Compensation and Post-Retirement Benefits

At March 30, 2024, the Company has three stock-based employee compensation plans. Share-based compensation expense was recognized as follows:

		Three months ended								Six months ended
		March 30,				March 25,				March 30,				March 25,
		2024				2023				2024				2023
		(in thousands)								(in thousands)

Stock options		$	364			$	559			$	727			$	1,179
Stock purchase plan			139				197				238				424
Stock issued to outside directors			34				27				74				27
Service share units issued to employees			444				193				826				374
Performance share units issued to employees			372				171				647				243
Total share-based compensation		$	1,353			$	1,147			$	2,512			$	2,247

The above compensation is net of tax benefits		$	375			$	166			$	696			$	305

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 six months ended March 30, 2024 or during the six months ended March 25, 2023.

During the three and six months ended March 30, 2024, the Company issued 1,795 and 11,546 service share units (“RSU”)’s, respectively. During the six months ended March 25, 2023, the Company issued 9,900 RSU’s. Each RSU entitles the awardee to one share of common stock upon vesting. 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. No such RSU’s were issued in the three months ended March 25, 2023.

During the three and six months ended March 30, 2024, the Company also issued 1,795 and 11,538 performance share units (“PSU”)’s, respectively. During the six months ended March 25, 2023, the Company issued 18,641 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. No such PSU’s were issued in the three months ended March 25, 2023.