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STOCK-BASED COMPENSATION
 3 Months Ended
Aug. 29, 2025
STOCK-BASED COMPENSATION  
STOCK-BASED COMPENSATION

9. STOCK-BASED COMPENSATION

 

Stock-based compensation expense consists of expenses for stock options, restricted stock units (“RSUs”), performance RSUs (“PRSUs”), restricted shares, performance restricted shares and employee stock purchase plan (“ESPP”) purchase rights. Stock-based compensation expense for stock options and ESPP purchase rights is measured at each grant date, based on the fair value of the award using the Black-Scholes option valuation model, and is recognized as expense over the employee’s requisite service period. This model was developed for use in estimating the value of publicly traded options that have no vesting restrictions and are fully transferable. The Company’s employee stock options have characteristics significantly different from those of publicly traded options. For RSUs, PRSUs, restricted shares and performance restricted shares, stock-based compensation expense is based on the fair value of the Company’s common stock at the grant date and is recognized as expense over the employee’s requisite service period. All of the Company’s stock-based compensation is accounted for as equity instruments. See Note 12 in the Company’s Annual Report on Form 10-K for fiscal 2025 filed on July 28, 2025 for further information regarding the equity incentive plans and the ESPP.

 

The following table summarizes the stock-based compensation expense for the three months ended August 29, 2025 and August 30, 2024:

 

 

 

Three Months Ended

 

 

 

August 29,

 

 

August 30,

 

(In thousands)

 

2025

 

 

2024

 

Cost of sales

 

$159

 

 

$93

 

Research and development

 

 

365

 

 

 

208

 

Selling, general and administrative

 

 

1,147

 

 

 

569

 

 

 

$1,671

 

 

$870

 

 

Stock-based compensation expense totaling $0.4 million and $0.3 million was capitalized as part of inventory as of August 29, 2025 and May 30, 2025, respectively.

 

The Company’s nonvested RSU, PRSU and restricted shares activities during the three months ended August 29, 2025 were as follows:

 

 

 

 

 

 

Weighted

 

 

 

 

 

 

Average Grant

 

 

 

 

 

Date Fair

 

 

 

Shares

 

 

Value

 

 

 

(in thousands)

 

 

Per Share

 

Unvested, May 30, 2025

 

 

664

 

 

$16.89

 

Granted (1)

 

 

529

 

 

 

15.13

 

Vested

 

 

(61)

 

 

14.81

 

Forfeited

 

 

(4)

 

 

17.54

 

Unvested, August 29, 2025

 

 

1,128

 

 

$16.18

 

 

(1) Includes 241,000 performance-based awards, of which approximately 70,000 performance-based awards have target achievement goals whereby the grantee can earn up to 200% of the original award (up to 141,000 shares) if the maximum target goals are met. The remaining awards are earned at 100% if the target goals are achieved

 

There were no options granted during the three months ended August 29, 2025 and August 30, 2024. There were no ESPP purchase rights granted during the three months ended August 29, 2025 and August 30, 2024.