Share-Based Compensation Plans

For the first quarter of fiscal 2019 and 2018, the Company recognized share-based compensation expense of $0.1 million and $0.4 million, respectively, in Selling, administrative and other operating costs in the Company’s Consolidated Statements of Operations.

Liability Awards

During fiscal 2018, the Company granted performance share units (“PSUs”) and restricted stock units (“RSUs”) that are classified as a liability at fair value and re-measured periodically based on the effect that the market condition has on these awards. The liability and corresponding expense are adjusted accordingly until the awards are settled.

The PSUs and RSUs had a total grant date fair value of approximately $0.9 million and $1.6 million, respectively. As of the first quarter ended January 27, 2019, the current fair value for these PSUs and RSUs approximate the grant date fair value of $3.38 and $3.20, respectively, which was computed using a Monte Carlo simulation.

Vesting of the PSUs is dependent on the achievement of target stock prices at the end of each of the one-year, two-year and three-year performance periods. The ending stock price is the average price of the last 20 trading days prior to and including the final day of each performance period. The payout percentages can range from 0% to 200%. The RSUs vest in equal annual tranches over three years, provided the employees remain employed with the Company on each of those vesting dates.

Upon vesting, the PSUs and RSUs may be settled in either cash or stock at the Company’s election, with any stock settlement being subject to the Company having a sufficient number of shares then available under its equity incentive plan to satisfy such awards. Any awards settled in cash will be capped at two times the Company’s closing stock price on the grant date, multiplied by the number of awards vesting.

In fiscal 2017, the Company has granted phantom units in the form of cash-settled RSUs to certain senior management level employees. The total fair value at the grant date was approximately $0.3 million with a weighted average fair value per unit of $4.35. The units vest in equal annual tranches over three years provided the employees remain employed on each of those vesting dates. These awards are classified as a liability and re-measured at the end of each reporting period based on the change in fair value of one share of the Company’s common stock. As of the first quarter ended January 27, 2019 and the fourth quarter ended October 28, 2018, 13,661 phantom units were outstanding.

Equity Awards

For RSUs granted in the prior fiscal years that are classified as equity awards, the grant date fair value is measured using the closing stock price on the grant date. For stock options granted in the prior fiscal years, the fair value of the option grants was estimated using the Black-Scholes option-pricing model. These awards vest in equal annual tranches over three years, provided the employees remain employed with the Company on each of those vesting dates.

The following tables summarizes the activities related to the Company’s share-based liability and equity awards for the three months ended January 27, 2019:



Performance Share Units	Number of		Weighted Average
	shares		Grant Date Fair Value
Outstanding at October 28, 2018	276,396		$	3.38
Forfeited	(58,299	)	$	3.38
Outstanding at January 27, 2019	218,097		$	3.38



Restricted Stock Units	Number of		Weighted Average
	shares		Grant Date Fair Value
Outstanding at October 28, 2018	582,831		$	3.53
Forfeited	(88,597	)	$	3.66
Vested	(11,962	)	$	4.60
Outstanding at January 27, 2019	482,272		$	3.48



Stock Options	Number of Shares		Weighted Average Exercise Price		Weighted Average Contractual Life (in years)	Aggregate Intrinsic Value (in thousands)
	Number of Shares		Weighted Average Exercise Price		Weighted Average Contractual Life (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding at October 28, 2018	1,600,040		$	5.25	7.27	$	3,126
Forfeited	(223,583	)	$	5.89	—	—
Expired	(4,601	)	$	6.01	—	—
Outstanding at January 27, 2019	1,371,856		$	5.54	6.97	$	2,542

For the three months ended January 27, 2019, there was no issuance of any share-based payment awards or any exercise of stock options. As of January 27, 2019, total unrecognized compensation expense of $1.6 million related to PSUs, stock options, RSUs and phantom units will be recognized over the remaining weighted average vesting period of 1.8 years, of which $0.9 million, $0.5 million, and $0.2 million is expected to be recognized in fiscal 2019, 2020 and 2021, respectively.