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Note 6 - Stock-based Compensation

6 Months Ended

Aug. 31, 2025

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

6.	STOCK-BASED COMPENSATION

As of August 31, 2025, the Company had a 2018 Stock Option Plan (the “2018 Plan”) and no other stock-based compensation plan. The 2018 Plan was adopted by the Board of Directors of the Company on May 8, 2018, approved by the shareholders of the Company at the Annual Meeting of Shareholders of the Company on July 24, 2018, and amended by the shareholders of the Company on July 18, 2024 and provides for the grant of options to purchase up to 1,550,000 shares of common stock of the Company. Prior to the 2018 Plan, the Company had the 2002 Stock Option Plan (the “2002 Plan”) which had been approved by the Company’s shareholders and provided for the grant of stock options to directors and key employees of the Company. All options granted under the 2018 Plan and 2002 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 such Plans, 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 Plans 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. Upon termination of employment or service as a director, all options held by the optionee that have not previously become exercisable shall terminate and all other options held by such optionee may be exercised, to the extent exercisable on the date of such termination, for a limited time after such termination. Any shares of common stock subject to an option under the 2018 Plan, which expires or is terminated unexercised as to such shares, shall again become available for issuance under the 2018 Plan.

During the 26 weeks ended August 31, 2025, the Company granted options to its directors and certain of its employees under the 2018 Plan to purchase a total of 148,700 shares of common stock. The future compensation expense to be recognized in earnings before income taxes is $476 and will be recorded on a straight-line basis over the requisite service period. The weighted average fair value of the granted options was $3.32 per share using the Black-Scholes option pricing model with the following assumptions: risk-free interest rate of 4.10%-4.35%; expected volatility factor of 24.0%-27.3%; expected dividend yield of 3.57%; and estimated option term of 5.9-9.2 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 terms 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 13 weeks and 26 weeks ended August 31, 2025. The estimated term of the options was based on evaluations of the historical and expected future employee exercise behavior.

The future compensation expense to be recognized in earnings before income taxes for options outstanding at August 31, 2025 was $970, which is expected to be recognized ratably over a weighted average vesting period of 1.47 years.

The following is a summary of option activity for the 26 weeks ended August 31, 2025:

Outstanding Options

Weighted Average Exercise Price

Weighted Average Remaining Contractual Term (in years)

Aggregate Intrinsic Value

Balance, March 2, 2025

718,950

$

12.15

Granted

148,700

14.00

Exercised

(70,110

)

9.48

Terminated or expired

(24,475

)

12.88

Balance, August 31, 2025

773,065

$

12.73

6.94

$

4,648

Vested and exercisable, August 31, 2025

450,748

$

12.26

5.57

$

2,919