Stock-Based Compensation

12 Months Ended

Feb. 25, 2023

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

Share-Based Compensation

We have a 2019 Stock Incentive Plan and a 2019 Non-Employee Director Stock Plan (the Plans) that provide for the issuance of 1,150,000 and 150,000 shares, respectively, for various forms of stock-based compensation to employees and non-employee directors. We also have a 2009 Stock Incentive Plan and 2009 Non-Employee Director Stock Incentive Plan with shares reserved for issuance for outstanding unvested awards. Awards under these Plans may be in the form of incentive stock options (to employees only), nonstatutory options, stock-settled stock appreciation rights (SARs), or nonvested share awards and units, all of which are granted at a price or with an exercise price equal to the fair market value of the Company’s stock at the date of award. No additional awards can be made under the 2009 Stock Incentive Plan or the 2009 Non-Employee Director Stock Incentive Plan. Nonvested share awards and units generally vest over a two, three or four-year period.

Total stock-based compensation expense was $8.7 million in fiscal 2023, $6.3 million in fiscal 2022 and $8.6 million in fiscal 2021. We account for any forfeitures as they occur.

Stock Options

In June 2020, we granted 660,600 stock options which had a weighted average fair value per option at the date of grant of $5.01.

The fair value of each award grant is estimated on the date of grant using the binomial lattice option-pricing model with the following weighted-average assumptions used for grants issued in fiscal 2021.

	2021
Dividend yield	3.3		%
Expected volatility	40.0		%
Risk-free interest rate	0.7		%
Maximum price	$	35.70

The expected stock price volatility is based on historical experience. The risk-free rate for periods that coincide with the expected life of the options is based on the U.S. Treasury Department yield curve in effect at the time of grant.

Stock option and SAR activity for the current fiscal year is summarized below:

	Number of Shares	Weighted Average Exercise  Price		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value at Year-End
Outstanding at February 26, 2022	370,800	$	23.04
Awards exercised	(145,060)	23.04
Awards canceled	(67,740)	23.04
Outstanding at February 25, 2023	158,000	$	23.04	0.5 years	$	2,000,280
Vested or expected to vest at February 25, 2023	158,000	$	23.04	0.5 years	$	2,000,280

For the fiscal year ended February 25, 2023, there were no cash proceeds from the exercise of stock options as all stock options were exercised on a stock-for-stock basis. The aggregate intrinsic value of securities exercised (the amount by which the stock price on the date of exercise exceeded the stock price of the award on the date of grant) was $2.7 million. For the fiscal year ended February 26, 2022, cash proceeds from the exercise of stock options were $4.1 million. The aggregate intrinsic value of the securities exercised was $2.3 million.

Executive compensation program

In fiscal 2022, the Compensation Committee of the Board of Directors implemented an executive compensation program for certain key employees. In each of the first quarters of fiscal 2023 and fiscal 2022, we issued performance shares in the form of nonvested share unit awards, which give the recipient the right to receive shares earned at the end of the respective three-fiscal-year performance periods. The number of share units issued at grant is equal to the target number of performance shares and allows for the right to receive a variable number of shares dependent on achieving a defined performance goal of return on invested capital and being employed at the end of the performance period.

Nonvested Share Awards and Units

The following table summarizes nonvested share activity for fiscal February 25, 2023: 

	Number of Shares and Units	Weighted Average Grant Date Fair Value
February 26, 2022 (1)	488,944	$	30.14
Granted (2)	183,793	46.08
Vested	(171,485)	28.08
Canceled (3)	(46,473)	36.13
February 25, 2023 (4)	454,779	$	36.75

(1) Includes a total of 50,825 nonvested share units granted and outstanding at target level for the fiscal 2022-2024 performance period.

(2)Includes a total of 38,654 nonvested share units granted and outstanding at target level for the 2023-2025 performance period.

(3) Includes a total of 9,690 nonvested share units cancelled for the fiscal 2022-2024 and fiscal 2023-2025 performance periods.

(4)Includes a total of 45,207 and 34,492 nonvested share units granted and outstanding at target level for the 2022-2024 and 2023-2025 performance periods, respectively.

At February 25, 2023, there was $9.7 million of total unrecognized compensation cost related to nonvested share and nonvested share unit awards, which is expected to be recognized over a weighted average period of approximately 23 months. The total fair value of shares vested during fiscal February 25, 2023 was $4.5 million.