Stock Compensation Plans

12 Months Ended

Feb. 03, 2024

Share-Based Payment Arrangement [Abstract]

Stock Compensation Plans

I. STOCK COMPENSATION PLANS

The Company has one active stock-based compensation plan: the 2016 Incentive Compensation Plan (as amended, the “2016 Plan”). A grant of a stock option award or stock appreciation right will reduce the outstanding reserve on a one-for-one basis, meaning one share for every share granted. A grant of a full-value award, including, but not limited to, restricted stock, restricted stock units and deferred stock, will reduce the outstanding reserve by a fixed ratio of 1.9 shares for every share granted. At February 3, 2024, 15,120,538 shares were authorized under the 2016 Plan, of which 2,177,876 shares remain available for grant.

In accordance with the terms of the 2016 Plan, any shares outstanding under the previous 2006 Incentive Compensation Plan (the “2006 Plan”) at August 4, 2016 that subsequently terminate, expire or are cancelled for any reason without having been exercised or paid are added back and become available for issuance under the 2016 Plan, with stock options being added back on a one-for-one basis and full-value awards being added back on a 1 to 1.9 basis. At February 3, 2024, there were 75,487 stock options that remain outstanding under the 2006 Plan.

The 2016 Plan is administered by the Compensation Committee. The Compensation Committee is authorized to make all determinations with respect to amounts and conditions covering awards. Options are not granted at a price less than fair value on the date of the grant. Except with respect to 5% of the shares available for awards under the 2016 Plan, no award will become exercisable or otherwise forfeitable unless such award has been outstanding for a minimum period of one year from its date of grant.

Stock Option Activity

The following tables summarize the stock option activity under the Company’s 2006 Plan and 2016 Plan, on an aggregate basis, for fiscal 2023:

	Number of Shares			Weighted-average exercise price per option		Weighted-average remaining contractual term	Aggregate intrinsic value (000's)
Stock Options
Outstanding options at beginning of year		3,556,434		$	0.83		$	23,239
Options granted		1,317			5.91			—
Options canceled or expired		(47,749	)		4.32			55
Options exercised		(329,263	)		1.12			1,147
Outstanding options at end of year		3,180,739		$	0.75	6.4 yrs.	$	10,962
Options exercisable at end of year		1,941,707		$	0.80	6.2 yrs.	$	6,609
Vested and expected to vest at end of year		3,180,739		$	0.75	6.4 yrs.	$	10,962

Non-Vested Share Activity

The following table summarizes activity for non-vested shares under the Company’s 2006 Plan, 2016 Plan and Inducement Awards, on an aggregate basis, for fiscal 2023:

	RSUs (1)			Deferred shares (2)		Performance share  units (3)			Fully-vest shares (4)			Total number of shares			Weighted-average grant-date fair value
Shares
Outstanding non-vested shares at beginning of year		520,008			435,568		240,000			—			1,195,576		$	2.51
Shares granted		607,142			—		573,000			29,650			1,209,792			4.47
Shares forfeited		(53,180	)		—		—			—			(53,180	)		7.22
Shares expired		—			—		(240,000	)		—			(240,000	)		1.07
Shares vested/issued		(537,685	)		—		—			(29,650	)		(567,335	)		4.07
Outstanding non-vested shares at end of year		536,285			435,568		573,000			—			1,544,853		$	3.53
Vested and expected to vest at end of year		536,285			435,568		—			—			971,853		$	3.14

(1)During fiscal 2023, the Company granted RSUs for the achievement of performance metrics under the 2020-2022 LTIP that were subject to additional vesting through August 31, 2023 and time-based RSUs under its LTIPs. See Note H, Long-Term Incentive Plans. As a result of net share settlements, of the 537,685 RSUs that vested, only 385,073 shares of common stock were issued.

(2)Represents compensation to certain directors, in lieu of cash, in accordance with their irrevocable elections. The outstanding deferred shares will be issued upon the director’s separation from service.

(3)On August 11, 2023, the Company granted 573,000 performance share units ("PSUs") in connection with the extension of Mr. Kanter's employment agreement. The award consists of nine tranches, with the first tranche vesting if and when the 30-day volume-weighted closing price of the Company's common stock is equal to or greater than $6.50 per share. Each subsequent tranche will vest upon achievement of the 30-day volume-weighted closing price of the Company's common stock in $0.25 installments with the ninth tranche vesting when such price is equal to or greater than $8.50 per share. The PSUs are subject to a one-year minimum vesting period, and any unvested PSUs will expire on August 11, 2026. The respective fair value and derived service period assigned to each tranche of the PSUs were determined using a Monte Carlo model based on: a weighted historical volatility of 57.8%, a term of 3 years, stock price on the date of grant of $4.98 per share, a risk-free rate of 4.6% and a cost of equity of 11.0%. The $2.4 million fair value is being expensed over the respective derived service periods of each tranche which range from 12 to 13 months.

(4)Represents compensation, with a fair value of $141,742, to certain directors, who are required to receive shares, in lieu of cash, in order to satisfy their minimum equity ownership under the Non-Employee Director Plan. Voluntary shares received, in lieu of cash, are reported below under Non-Employee Director Compensation Plan.

Non-Employee Director Compensation Plan

In January 2010, the Company established a Non-Employee Director Stock Purchase Plan to provide a convenient method for its non-employee directors to acquire shares of the Company’s common stock at fair market value by voluntarily electing to receive shares of common stock in lieu of cash for service as a director. The substance of this plan is now encompassed within the Company’s Seventh Amended and Restated Non-Employee Director Compensation Plan, as amended, the "Non-Employee Director Compensation Plan."

The plan requires a minimum equity ownership requirement which requires each director to receive at least 60% of their annual retainers in shares of common stock until the value of their equity ownership is equal to at least three times the annual retainer. Any shares issued to satisfy the minimum equity ownership were granted from the 2016 Plan. All other shares were granted under the Non-Employee Director Compensation Plan.

The following shares of common stock, with the respective fair value, were issued from the Non-Employee Director Compensation Plan to its non-employee directors as compensation for fiscal 2023, fiscal 2022 and fiscal 2021:

	Number of shares of common stock issued		Fair value of common stock issued
Fiscal 2023		59,532	$	301,578
Fiscal 2022		73,024	$	359,208
Fiscal 2021		232,910	$	374,227

At February 3, 2024, 634,534 shares remained available for grant under the Non-Employee Director Compensation Plan.