Share-Based Compensation Plans

For the three and six months ended April 28, 2019, the Company recognized share-based compensation expense of $0.6 million and $0.7 million, respectively. For the three and six months ended April 29, 2018, the Company recognized share-based compensation expense of $0.5 million and $1.0 million, respectively. These expenses are included 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, which is computed using a Monte Carlo simulation 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. As of the second quarter ended April 28, 2019, the total fair value of these PSUs and RSUs was approximately $1.0 million and $1.4 million, respectively.

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 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 second quarter ended April 28, 2019, the total fair value was $0.1 million and 12,022 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.

Summary of Equity and Liability Awards

The following tables summarize the activities related to the Company’s share-based liability and equity awards for the six months ended April 28, 2019:



Performance Share Units	Number of		Weighted Average
	Shares		Grant Date Fair Value
Outstanding at October 28, 2018	276,396		$3.38
Forfeited	(99,407	)	$3.38
Outstanding at April 28, 2019	176,989		$3.38



Restricted Stock Units	Number of		Weighted Average
	Shares		Grant Date Fair Value
Outstanding at October 28, 2018	582,831		$3.53
Forfeited	(146,938	)	$3.66
Vested	(15,048	)	$5.13
Outstanding at April 28, 2019	420,845		$3.43



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	$—
Exercised	(200,000	)	$4.35	—	—
Forfeited	(302,792	)	$5.54	—	—
Expired	(175,055	)	$6.36	—	—
Outstanding at April 28, 2019	922,193		$5.74	7.51	$343

For the six months ended April 28, 2019, there was no issuance of any share-based payment awards. As of April 28, 2019, total unrecognized compensation expense of $1.2 million related to PSUs, stock options, RSUs and phantom units will be recognized over the remaining weighted average vesting period of 1.7 years, of which $0.4 million, $0.6 million, and $0.2 million are expected to be recognized in fiscal 2019, 2020 and 2021, respectively.