Stock-Based Compensation Stock-Based Compensation (Notes)

6 Months Ended

Oct. 29, 2022

Share-Based Payment Arrangement [Abstract]

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

Note 10. 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 29, 2022, we granted the following awards:

•82,628 restricted stock units ("RSU") awards and 11,804 restricted stock ("RS") awards with a one year vesting period to the Board of Directors ("BOD") members for annual compensation.

•878,247 restricted stock units ("RSU") awards to employees with a three year vesting period.

•322,495 stock options with an exercise price of $2.36 per stock option, which was the fair market value on the date of grant (Stock Option Grant #1) and 348,723 stock options with an exercise price of $4.86 per stock option, which was above the fair market value on the date of grant, (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	$	2.36		$	4.86
Valuation method utilized	Black-Scholes			Monte Carlo
Risk-free interest rate	3.28		%	3.28		%
Expected option term	6.3 years			10.0 years
Company volatility	74		%	74		%
Dividend yield	—		%	—		%
Grant date fair value per award	$	1.61		$	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.

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

	13 weeks ended				26 weeks ended
	October 29, 2022		October 30, 2021		October 29, 2022		October 30, 2021
Stock-based awards
Restricted stock expense	$	64	$	119	$	158	$	207
Restricted stock units expense	990		931		2,013		1,661
Performance share units expense	—		29		10		63
Stock option expense	665		399		1,329		669
Sub-total stock-based awards:	$	1,719	$	1,478	$	3,510	$	2,600
Cash settled awards
Phantom share units expense	$	66	$	2,452	$	268	$	4,924
Total compensation expense for long-term incentive awards	$	1,785	$	3,930	$	3,778	$	7,524

Total unrecognized compensation cost related to unvested awards as of October 29, 2022 was $13,077 and is expected to be recognized over a weighted-average period of 2.3 years.