Stock-Based Compensation (Notes)

6 Months Ended

Aug. 03, 2019

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation

STOCK-BASED COMPENSATION

Stock-based compensation expense by type of grant for each period presented was as follows (in thousands):

	Three Months Ended					Six Months Ended
	August 3, 2019			August 4, 2018		August 3, 2019		August 4, 2018
Non-vested stock	$	515		$	1,079	$	1,296	$	2,266
Restricted stock units	68			259		246		751
Stock-settled performance share units	121			412		289		783
Cash-settled performance share units	(51		)	96		28		150
Total stock-based compensation expense	653			1,846		1,859		3,950
Related tax benefit	—			—		—		—
Stock-based compensation expense, net of tax	$	653		$	1,846	$	1,859	$	3,950

As of August 3, 2019, we have estimated unrecognized compensation cost of $5.5 million related to stock-based compensation awards granted, which is expected to be recognized over a weighted average period of 2.3 years.

Non-vested Stock

We grant shares of non-vested stock to our employees and non-employee directors. Shares of non-vested stock awarded to employees vest 25% annually over a period of four years from the grant date. Shares of non-vested stock awarded to non-employee directors cliff vest after one year. At the end of the vesting period, shares of non-vested stock convert one-for-one to common stock. Certain non-vested stock awards have shareholder rights, including the right to vote and to receive dividends. The fair value of non-vested stock awards with dividend rights is based on the closing share price of our common stock on the grant date. The fair value of non-vested stock awards that do not have dividend rights is discounted for the present value of expected dividends during the vesting period. Compensation expense is recognized ratably over the vesting period.

The following table summarizes non-vested stock activity for the six months ended August 3, 2019:

Non-vested Stock	Number of Shares		Weighted Average Grant  Date Fair Value
Outstanding at February 2, 2019	1,379,616		$	4.43
Granted	954,670		0.96
Vested	(630,901	)	5.40
Forfeited	(39,664	)	6.89
Outstanding at August 3, 2019	1,663,721		2.01

The weighted-average grant date fair value for non-vested stock granted during the six months ended August 3, 2019 and August 4, 2018 was $0.96 and $2.41, respectively. The aggregate intrinsic value of non-vested stock that vested during the six months ended August 3, 2019 and August 4, 2018, was $0.4 million and $1.6 million, respectively. The payment of employees’ tax liabilities for a portion of the vested shares was satisfied by withholding shares with a fair value equal to the tax liabilities. As a result, the actual number of shares issued during the six months ended August 3, 2019 was 582,980.

Restricted Stock Units (“RSUs”)

We grant RSUs to our employees, which vest 25% annually over a period of four years from the grant date.  Each vested RSU is settled in cash in an amount equal to the fair market value of one share of our common stock on the vesting date, not to exceed five times the per share fair market value of our common stock on the grant date. Unvested RSUs have the right to receive a dividend equivalent payment equal to cash dividends paid on our common stock. RSUs are accounted for as a liability in accordance with accounting guidance for cash settled stock awards. The liability for RSUs is remeasured based on the closing share price of our common stock at each reporting period until the award vests. Compensation expense is recognized ratably over the vesting period and adjusted with changes in the fair value of the liability.

The following table summarizes RSU activity for the six months ended August 3, 2019:

Restricted Stock Units	Number of Units		Weighted Average Grant  Date Fair Value
Outstanding at February 2, 2019	1,740,314		$	2.16
Granted	1,615,000		0.98
Vested	(482,814	)	2.17
Forfeited	(562,500	)	1.61
Outstanding at August 3, 2019	2,310,000		1.47

Stock-settled Performance Share Units (“Stock-settled PSUs”)

We grant stock-settled PSUs as a means of rewarding management for our long-term performance based on total shareholder return relative to a specific group of companies over a performance cycle of three years. These awards cliff vest following a performance cycle of three years, and if earned, are settled in shares of our common stock, unless otherwise determined by our Board of Directors (“Board”), or its Compensation Committee. The actual number of shares of our common stock that may be earned ranges from zero to a maximum of twice the number of target units awarded to the recipient. Grant recipients do not have any shareholder rights on unvested or unearned stock-settled PSUs. The fair value of these PSUs is estimated using a Monte Carlo simulation, based on the expected term of the award, a risk-free rate, expected dividends, expected volatility, and share price of our common stock and the specified peer group. The expected term is estimated based on the vesting period of the awards, the risk-free rate is based on the yield on U.S. Treasury securities matching the vesting period, and the volatility is based on the historical volatility over the expected term. Compensation expense is recognized ratably over the corresponding vesting period for stock-settled PSUs.

The following table summarizes stock-settled PSU activity for the six months ended August 3, 2019:

Period Granted	Target PSUs Outstanding at February 2, 2019	Target PSUs Granted	Target PSUs Forfeited		Target PSUs Outstanding at August 3, 2019	Weighted Average Grant Date Fair Value per Target PSU
2017	470,000	—	(50,000	)	420,000	$	1.80
2018	280,000	—	—		280,000	3.05
2019	—	375,000	—		375,000	1.39
Total	750,000	375,000	(50,000	)	1,075,000	1.98

The weighted-average grant date fair value for stock-settled PSUs granted during the six months ended August 3, 2019 and August 4, 2018 was $1.39 and $3.05, respectively. No stock-settled PSUs vested during the six months ended August 3, 2019 and August 4, 2018.

Cash-settled Performance Share Units (“Cash-settled PSUs”)

We grant cash-settled PSUs as a means of rewarding management for our long-term performance based on total shareholder return relative to a specific group of companies over a performance cycle of three years. These awards cliff vest following a performance cycle of three years, and if earned, are settled in cash. The amount of settlement ranges from zero to a maximum of twice the number of target units awarded multiplied by the fair market value of one share of our common stock on the vesting date. Grant recipients do not have any shareholder rights on unvested or unearned cash-settled PSUs. Cash-settled PSUs are accounted for as a liability in accordance with accounting guidance for cash settled stock awards. The liability for cash-settled PSUs is remeasured based on their fair value at each reporting period until the award vests, which is estimated using a Monte Carlo simulation. Assumptions used in the valuation include the expected term of the award, a risk-free rate, expected dividends, expected volatility, and share price of our common stock and the specified peer group. The expected term is estimated based on the vesting period of the awards, the risk-free rate is based on the yield on U.S. Treasury securities matching the vesting period, and the volatility is based on the historical volatility over the expected term. Compensation expense is recognized ratably over the corresponding vesting period and adjusted with changes in the fair value of the liability.

The following table summarizes cash-settled PSU activity six months ended August 3, 2019:

Period Granted	Target PSUs Outstanding at February 2, 2019	Target PSUs Granted	Target PSUs Forfeited		Target PSUs Outstanding at August 3, 2019	Weighted Average Grant Date Fair Value per Target PSU
2018	300,000	—	(50,000	)	250,000	$	3.05
2019	—	530,000	(50,000	)	480,000	$	1.39
Total	300,000	530,000	(100,000	)	730,000	$	1.96