Stock-Based Compensation

9 Months Ended

Nov. 28, 2015

Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]

Note 11 – Stock-Based Compensation

Restricted Stock Units

During the thirty-nine weeks ended November 28, 2015, we granted 363,095 Restricted Stock Units (“RSUs”) to our President and Chief Executive Officer (the “CEO”), pursuant to the CEO’s employment agreement. The RSUs vest over three years, subject to the CEO’s continued employment, and settle in shares over a five-year period. Until shares are issued with respect to the RSU’s, the CEO will not have any rights as a shareholder with respect to the RSU’s and will not receive dividends or be able to vote the shares represented by the RSUs. We used the fair-market value of our common stock on the date the award was granted to value the grant.

On April 27, 2015, we issued 238,095 shares of common stock to the CEO to settle vested RSUs from previous RSU grants. In connection with that transaction, we repurchased/withheld (from the 238,095 shares issued) 132,904 shares to provide for the CEO’s withholding tax liability. In accordance with ASC Topic 718, Compensation-Stock Compensation, the repurchase or withholding of immature shares (i.e. shares held for less than six months) by us upon the vesting of a restricted share would ordinarily result in liability accounting. ASC 718 provides an exception, if the fair value of the shares repurchased or withheld is equal or less than the employer’s minimum statutory withholding requirements. The aggregate fair value of the shares repurchased/withheld (valued at the then current fair value of $8.00 per share) was in excess of the minimum statutory tax withholding requirements and as such we are required to account for the restricted stock awards as a liability. During the thirty-nine weeks ended November 28, 2015, we recorded an adjustment of $2.5 million to reclassify amounts previously recorded in additional paid-in-capital to a liability. We, at each reporting period, will re-measure the liability, until settled, with changes in the fair value being recorded as stock compensation expense in the statement of operations. Stock-based compensation expense recognized in the condensed consolidated statement of operations during the thirteen and thirty-nine weeks ended November 28, 2015 totaled $260,000 and $1.2 million, respectively, which is net of $546,000 and $2.7 million, respectively, capitalized as part of real estate under development. As of November 28, 2015, we have recorded a stock-based non-cash liability of $4.7 million.

Our RSU activity for the thirty-nine weeks ended November 28, 2015 was as follows:

	Number of Shares		Weighted Average Fair Value at Grant Date

Non-vested at beginning of period		1,244,463	$	6.48
Granted RSUs		393,095	$	7.02
Vested		(296,428)	$	6.26
Non-vested at end of period		1,341,130	$	6.68

During November 2015, we issued 250,000 shares of common stock to the CEO to settle vested RSUs from previous RSU grants in fiscal 2013. In connection with that transaction, we repurchased/withheld (from the 250,000 shares issued) 141,050 shares to provide for the CEO’s withholding tax liability at statutory withholding rates.