Note F - Stock-based Compensation

9 Months Ended

Mar. 29, 2024

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

F. Stock-Based Compensation

Performance Stock Awards (“PSA”)

During the first three quarters of fiscal 2024 and 2023, the Company granted a target number of 119.3 and 118.1 PSAs, respectively, to various employees of the Company, including executive officers. The fiscal 2024 PSAs will vest if the Company achieves performance-based target objectives relating to average return on invested capital and cumulative earnings before interest, taxes, depreciation, and amortization ("EBITDA", as defined in the PSA Grant Agreement), in the cumulative three fiscal year period ending June 30, 2026. These PSAs are subject to adjustment if the Company’s return on invested capital and cumulative EBITDA falls below or exceeds the specified target objective, and the maximum number of performance shares that can be awarded if the target objective is exceeded is 238.7.

The fiscal 2023 PSAs will vest if the Company achieves performance-based target objectives relating to average return on invested capital and cumulative EBITDA (as defined in the PSA Grant Agreement), in the cumulative three fiscal year period ending June 30, 2025. These PSAs are subject to adjustment if the Company’s return on invested capital and cumulative EBITDA falls below or exceeds the specified target objective, and the maximum number of performance shares that can be awarded if the target objective is exceeded is 234.2.

There were 329.9 and 437.9 unvested PSAs outstanding at March 29, 2024 and March 31, 2023, respectively. The fair value of the PSAs (on the date of grant) is expensed over the performance period for the shares that are expected to ultimately vest. Compensation expense of $326 and $307 was recognized for the quarters ended March 29, 2024 and March 31, 2023, respectively, related to PSAs. Compensation expense of $704 and $903 was recognized for the three quarters ended March 29, 2024 and March 31, 2023, respectively, related to PSAs. The weighted average grant date fair value of the unvested awards at March 29, 2024 was $11.48. At March 29, 2024, the Company had $1,652 of unrecognized compensation expense related to the unvested shares that would vest if the specified target objective was achieved for the fiscal 2024 and 2023 awards. The total fair value of PSAs vested as of March 29, 2024 and March 31, 2023 was $0.

Performance Stock Unit Awards (“PSUA”)

The PSUAs entitle an individual to shares of common stock of the Company or cash in lieu of shares of Company common stock if specific terms and conditions or restrictions are met through a specified date. During the first three quarters of fiscal 2024 and 2023 , the Company granted a target number of 10.5 and 0 PSUAs, respectively, to various individuals in the Company. The fiscal 2024 PSUAs will vest if the Company achieves performance-based target objectives relating to average return on invested capital and cumulative EBITDA (as defined in the PSUA Grant Agreement), in the cumulative three fiscal year period ending June 30, 2026. These PSUAs are subject to adjustment if the Company’s return on invested capital and cumulative EBITDA falls below or exceeds the specified target objective, and the maximum number of performance shares that can be awarded if the target objective is exceeded is 20.9.

There were 10.5 and 0 unvested PSUAs outstanding at March 29, 2024 and March 31, 2023, respectively. The fair value of the PSUAs (on the date of grant) is expensed over the performance period for the shares that are expected to ultimately vest. Compensation expense of $11 and $0 was recognized for the quarters ended March 29, 2024 and March 31, 2023, respectively, related to PSUAs. Compensation expense of $29 and $0 was recognized for the three quarters ended March 29, 2024 and March 31, 2023, respectively, related to PSUAs. The weighted average grant date fair value of the unvested awards at March 29, 2024 was $12.15. At March 29, 2024, the Company had $98 of unrecognized compensation expense related to the unvested shares that would vest if the specified target objective were achieved for the fiscal 2024 awards. The total fair value of PSUAs vested as of March 29, 2024 and March 31, 2023 was $0.

Restricted Stock Awards (“RS”)

The Company has unvested RS awards outstanding that will vest if certain service conditions are fulfilled. The fair value of the RS grants is recorded as compensation expense over the vesting period, which is generally 1 to 3 years. During the first three quarters of fiscal 2024 and 2023, the Company granted 117.2 and 180.0 service based restricted shares, respectively, to employees and non-employee directors. There were 246.6 and 308.6 unvested shares outstanding at March 29, 2024 and March 31, 2023, respectively. A total of 2.4 and 0 shares of restricted stock were forfeited during the three quarters ended March 29, 2024 and March 31, 2023, respectively. Compensation expense of $330 and $313 was recognized for the quarters ended March 29, 2024 and March 31, 2023, respectively. Compensation expense of $953 and $1,007 was recognized for the three quarters ended March 29, 2024 and March 31, 2023, respectively. The total fair value of restricted stock grants vested as of March 29, 2024 and March 31, 2023 was $2,196 and $1,699, respectively. As of March 29, 2024, the Company had $1,568 of unrecognized compensation expense related to restricted stock which will be recognized over the next three years.

Restricted Stock Unit Awards (“RSU”)

The RSUs entitles an individual to shares of common stock of the Company or cash in lieu of shares of Company common stock if specific terms and conditions or restrictions are met through a specified date, generally three years from the date of grant or when performance conditions have been met. The fair value of the RSUs (on the date of grant) is recorded as compensation expense over the vesting period. During the first three quarters of fiscal 2024 and 2023, the Company granted 7.1 and 72.4 of employment based RSUs, respectively. There were 135.0 and 130.2 unvested RSUs outstanding at March 29, 2024 and March 31, 2023, respectively. Compensation expense of $124 and $116 was recognized for the quarters ended March 29, 2024 and March 31, 2023, respectively. Compensation expense of $372 and $340 was recognized for the three quarters ended March 29, 2024 and March 31, 2023, respectively. The total fair value of RSUs vested as of March 29, 2024 and March 31, 2023 was $25 and $40, respectively. The weighted average grant date fair value of the unvested awards at March 29, 2024 was $10.97. As of March 29, 2024, the Company had $412 of unrecognized compensation expense related to RSUs which will be recognized over the next three years.