Stock-Based Compensation Stock-Based Compensation (Notes)

6 Months Ended

Oct. 31, 2020

Share-based Payment Arrangement [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Note 12. Long-Term Incentive Plan Compensation Expense

We recognize compensation expense for restricted stock awards and performance share awards ratably over the requisite service period of the award, which is generally three years. We recognize compensation expense for these awards based on the number of awards expected to vest, which includes an estimated average forfeiture rate. We calculate the fair value of these awards based on the closing stock price on the date the award was granted. For those awards with market conditions, we have determined the grant date fair value using the Monte Carlo simulation model and compensation expense is recognized ratably over the requisite service period regardless of whether the market condition is satisfied.

For stock options granted with an "at market" exercise price, we determined the grant fair value using the Black-Scholes model and for stock options granted with "a premium" exercise price, we determined the grant date fair value using the Monte Carlo simulation model. The fair value models for stock options use assumptions that include the risk-free interest rate, expected volatility, expected dividend yield and expected term of the options.

During the 26 weeks ended October 31, 2020, we granted the following awards:

•243,905 restricted stock units ("RSU") awards and 146,343 restricted stock ("RS") awards with a one year vesting period to the Board of Directors ("BOD") members for annual compensation.

•1,250,518 stock options with an exercise price of $2.46 per stock option, which was the fair market value on the date of grant (Stock Option Grant #1) and 1,250,518 stock options with an exercise price of $5.00 per stock option (Stock Option Grant #2) granted to employees. The stock options are exercisable in four equal annual installments commencing one year after the date of grant and have a ten year term. Holders are not entitled to receive dividends (if any) prior to vesting and exercise of the options. The following summarizes the stock option fair value assumptions:

	Stock Option Grant #1			Stock Option Grant #2
Exercise Price	$	2.46		$	5.00
Valuation method utilized	Black-Scholes			Monte Carlo
Risk-free interest rate	0.27		%	0.68		%
Expected option term	6.2 years			10.0 years
Company volatility	73		%	73		%
Dividend yield	—		%	—		%
Grant date fair value per award	$	1.58		$	1.28

The risk-free interest rate is based on United States Treasury yields in effect at the date of grant for periods corresponding to the expected stock option term. For Stock Option Grant #1, we are permitted to use the simplified approach to estimate the expected term of the stock options, which typically assumes exercise occurs at the mid-point between the end of the vesting period and the expiration date. The simplified approach is not allowed for premium-priced options (Stock Option Grant #2), which were estimated using a stock price multiple, as there is no option exercise history which to base an early exercise option. The expected stock option term represents the weighted average period of time that stock options granted are expected to be outstanding, based on vesting schedules and the contractual term of the stock options. Volatility is based on the historical volatility of the Company’s common stock over a period of time corresponding to the expected stock option term.

•2,345,528 phantom share units granted to employees. Each phantom share represents the economic equivalent to one share of the Company's common stock and will be settled in cash based on the fair market value of a share of common stock at each vesting date in an amount not to exceed $7.38 per share. The phantom shares vest and will be settled in three equal installments commencing one year after the date of grant. The fair value of the phantom shares was determined using the closing stock price on the date of the award less the fair value of the call option which was

estimated using the Black-Scholes model. The average fair value on the date of grant was $1.88 per phantom share using risk-free rates ranging from 0.12%-0.15% for the three tranches and annual volatility ranging from 86%-114% for the three tranches. The fair value of the liability for the cash-settled phantom share unit awards will be remeasured at the end of each reporting period through settlement to reflect current risk-free rate and volatility assumptions. As of October 31, 2020, we recorded a liability of $224 (Level 2 input) which is reflected in accrued liabilities and other long-term liabilities on the condensed consolidated balance sheet.

We recognized compensation expense for long-term incentive plan awards in selling and administrative expenses as follows:

	13 weeks ended				26 weeks ended
	October 31, 2020		October 26, 2019		October 31, 2020		October 26, 2019
Stock-based awards
Restricted stock expense	$	20	$	30	$	50	$	60
Restricted stock units expense	976		1,722		2,335		3,712
Performance shares expense	—		—		—		12
Performance share units expense	73		108		205		397
Stock option expense	111		—		111		—
Sub-total stock-based awards:	$	1,180	$	1,860	$	2,701	$	4,181
Cash settled awards
Phantom share units expense	$	224	$	—	$	224	$	—
Total compensation expense for long-term incentive awards	$	1,404	$	1,860	$	2,925	$	4,181

Total unrecognized compensation cost related to unvested awards as of October 31, 2020 was $12,261 and is expected to be recognized over a weighted-average period of 2.5 years.