Stock-Based Compensation Plans |
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| Stock-Based Compensation Plans | Stock-Based Compensation Plans General The Company's stockholders approved the Resources Connection, Inc. 2020 Performance Incentive Plan (the “2020 Plan”) on October 22, 2020, which replaced and succeeded in its entirety the Resources Connection, Inc. 2014 Performance Incentive Plan (the “2014 Plan”). On October 17, 2024, the Company’s stockholders approved an amendment and restatement of the 2020 Plan, which increased the maximum number of shares of the Company’s common stock authorized for issuance under the 2020 Plan by 815,000 shares. Executive officers and certain employees, as well as non-employee directors of the Company and certain consultants and advisors are eligible to participate in the 2020 Plan. The maximum number of shares of the Company’s common stock that may be issued or transferred pursuant to awards under the 2020 Plan equals: (1) 815,000 shares, plus (2) 1,797,440 (which represents the number of shares that were available for additional award grant purposes under the 2014 Plan immediately prior to the termination of the authority to grant new awards under the 2014 Plan as of October 22, 2020), plus (3) the number of any shares subject to stock options granted under the 2014 Plan or the Resources Connection, Inc. 2004 Performance Incentive Plan (together with the 2014 Plan, the “Prior Plans”) and outstanding as of October 22, 2020 which expire, or for any reason are cancelled or terminated, after that date without being exercised, plus (4) the number of any shares subject to RSA and RSU awards granted under the Prior Plans that are outstanding and unvested as of October 22, 2020 which are forfeited, terminated, cancelled, or otherwise reacquired after that date without having become vested. Awards under the 2020 Plan may include, but are not limited to, stock options, stock appreciation rights, restricted stock, performance stock, stock units, stock bonuses and other forms of awards granted or denominated in shares of common stock or units of common stock, as well as certain cash bonus awards. Historically, the Company has granted RSA, RSUs and stock option awards under the 2020 Plan that typically vest in equal annual installments, and PSU awards under the 2020 Plan that vest upon the achievement of certain Company-wide performance targets at the end of the defined performance period. Stock option grants typically terminate ten years from the date of grant. Vesting periods for RSA, RSU and stock option awards range from to four years. The performance period for the PSU awards is three years. As of August 29, 2026, there were 1,122,422 shares available for further award grants under the 2020 Plan (with outstanding PSUs counted for this purpose based on the target number of shares granted). Stock-Based Compensation Expense The Company recognizes stock-based compensation expense on time-vesting equity awards ratably over the applicable vesting period based on the grant date fair value, net of estimated forfeitures. Expense related to the liability-classified awards reflects the change in fair value during the reporting period. The number of performance stock units earned at the end of the performance period may equal, exceed or be less than the targeted number of shares depending on whether the performance criteria are met, surpassed or not met. During each reporting period, the Company uses the latest forecasted results to estimate the number of shares to be issued at the end of the performance period. Any resulting changes to stock compensation expense are adjusted in the period in which the change in estimates occur. Stock-based compensation expense included in selling, general and administrative expenses was $1.4 million and $2.3 million for the three months ended August 29, 2026 and August 30, 2025, respectively. These amounts consisted of stock-based compensation expense related to employee stock options, RSAs, RSU awards and PSU awards under the 2020 Plan and Prior Plans, employee stock purchases made via the ESPP, and stock units credited under the Directors Deferred Compensation Plan. Stock Options The following table summarizes the stock option activity for the three months ended August 29, 2026 (in thousands, except weighted-average exercise price):
(1)As of August 29, 2026, all outstanding options have vested, and there was no unrecognized compensation cost related to unvested and outstanding employee stock options. Valuation and Expense Information for Stock Based Compensation Plans There were no employee stock options granted during the three months ended August 29, 2026. Employee Stock Purchase Plan On October 20, 2022, the Company’s stockholders approved an amendment and restatement of the ESPP that increased the number of shares authorized for issuance under the ESPP by 1,500,000, resulting in a maximum number of shares of the Company’s common stock authorized for issuance under the ESPP of 3,325,000 shares. The Company’s ESPP allows qualified employees (as defined in the ESPP) to purchase designated shares of the Company’s common stock at a price equal to 85% of the lesser of the fair market value of common stock at the beginning or end of each semi-annual stock purchase period. The Company issued 222,753 and 240,674 shares of common stock pursuant to the ESPP during the three months ended August 29, 2026 and August 30, 2025, respectively. There were 80,516 shares of common stock available for issuance under the ESPP as of August 29, 2026. Restricted Stock Awards The following table summarizes the activities for the RSAs for the three months ended August 29, 2026 (in thousands, except weighted-average grant-date fair value):
As of August 29, 2026, there was $0.8 million of total unrecognized compensation costs related to unvested RSAs. The cost is expected to be recognized over a weighted-average period of 1.67 years. There were no RSAs granted during the three months ended August 29, 2026. The weighted average estimated fair value per share of RSA granted during the three months ended August 30, 2025 was $5.46. Stock Units The Company may issue either equity-classified restricted stock units ("RSUs"), which are awards granted to employees under the 2020 Plan that settle in shares of the Company’s common stock, or liability-classified stock units, which are awards credited to Board of Director members under the Directors Deferred Compensation Plan that settle in cash. The Company also grants RSUs to its employees under the 2020 Plan, which are classified as equity awards. The following table summarizes the activities for the unvested stock units, including both equity-classified RSUs and liability- classified stock units ("Stock Units"), for the three months ended August 29, 2026 (in thousands, except weighted-average grant-date fair value):
(1)Dividend equivalents are included in the granted shares. As of August 29, 2026, there was $7.8 million of total unrecognized compensation costs related to unvested equity-classified RSUs. The cost is expected to be recognized over a weighted-average period of 1.57 years. As of August 29, 2026, there was $0.3 million of total unrecognized compensation costs related to unvested liability-classified Stock Units. The cost is expected to be recognized over a weighted-average period of 1.29 years. The weighted average estimated fair value per share of RSUs and Stock Units granted during the three months ended August 29, 2026 and August 30, 2025 was $4.43 and $5.07, respectively. Performance Stock Units The Company granted performance-based vesting restricted stock units ("PSUs") to certain members of management and other select employees. The total number of shares that will vest under the PSUs will be determined at the end of a three-year performance period based on the Company’s achievement of certain revenue and Adjusted EBITDA percentage targets over the performance period. The total number of shares that may be earned for these awards based on performance over the performance period ranges from zero to 150% of the target number of shares. The following table summarizes the activities for the unvested PSUs for the three months ended August 29, 2026 (in thousands, except weighted-average grant-date fair value):
(1)Shares are presented at the stated target, which represents the base number of shares that would vest. Actual shares that vest may be zero - 150% of the target based on the achievement of the specific company-wide performance targets. (2)Dividend equivalents are included in the granted shares. As of February 28, 2026, there was no unrecognized compensation costs related to unvested PSUs.
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