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Stock-Based Compensation (Tables)

3 Months Ended

May 04, 2019

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

The fair value of each option granted is estimated on the date of grant using the Black-Scholes option-pricing model. There were no stock options granted in the first quarter of fiscal 2019. The following assumptions were used for grants for the first quarter of fiscal 2018:

	May 5, 2018
Expected volatility		48.9	%
Risk-free interest rate		2.55	%
Expected life	4.5 yrs
Dividend rate		—

Employee Stock Plan, 2006 Plan and 2016 Plan

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Summary of Restricted Stock Activity

The following tables summarize the share activity and stock option activity for the Company’s 2006 Plan and 2016 Plan, on a combined basis, for the first three months of fiscal 2019:

	Restricted shares			Restricted stock units ⁽¹⁾			Deferred shares ⁽²⁾			Fully-vested shares ⁽³⁾			Performance stock units ⁽⁴⁾		Total number of shares			Weighted-average grant-date fair value
Shares
Outstanding non-vested shares at beginning of year		30,000			1,372,628			204,040			—			—		1,606,668		$	2.93
Shares granted		—			390,299			19,371			29,410			720,000		1,159,080		$	1.83
Shares vested/issued		(10,000	)		(374,202	)		(2,575	)		(29,410	)		—		(416,187	)	$	3.39
Shares canceled		—			—			—			—			—		—		$	-
Outstanding non-vested shares at end of quarter		20,000			1,388,725			220,836			—			720,000		2,349,561		$	2.31

(1)

During the first quarter of fiscal 2019, the Company granted 150,299 RSUs in connection with the partial achievement of performance targets under the 2017-2018 LTIP, see Note 5, Long-Term Incentive Plans. In addition, the Company granted, as a signing award, 240,000 time-based RSUs to Mr. Kanter, which will vest equally over four years. As a result of net share settlement, of the 374,202 time-based RSUs which vested during the first quarter of fiscal 2019, only 295,788 shares of common stock were issued.

(2)

The 19,371 shares of deferred stock, with a fair value of $49,391, represent compensation to certain directors in lieu of cash, in accordance with their irrevocable elections. The shares of deferred stock will vest three years from the date of grant or at separation of service, based on the irrevocable election of each director.

(3)

During the first quarter of fiscal 2019, the Company granted 29,410 shares of stock, with a fair value of approximately $74,996, to certain directors as compensation in lieu of cash, in accordance with their irrevocable elections. Directors are required to elect 50% of their quarterly retainer in equity. Any shares in excess of the minimum required election are issued from the Company’s Fourth Amended and Restated Non-Employee Director Compensation Plan (“Non-Employee Director Compensation Plan”).

(4)

On February 19, 2019, the Company granted 720,000 shares of performance stock units (“PSUs”), with a fair value of $1.0 million, to Mr. Kanter. The PSUs vest in installments when the following milestones are met: one-third of the PSUs vest when the trailing 90-day volume-weighted average closing stock price (“VWAP”) is $4.00, one-third of the PSUs vest when the VWAP is $6.00 and one-third when the VWAP is $8.00. All PSUs will expire on April 1, 2023 if no performance metric is achieved. The $1.0 million is being expensed over the respective derived service periods of each tranche of 16 months, 25 months and 30 months, respectively. The respective fair value and derived service periods assigned to the PSUs were determined using a Monte Carlo model based on: the Company’s historical volatility of 55.9%, a term of 4.1 years, stock price on the date of grant of $2.50 per share, a risk-free rate of 2.5% and a cost of equity of 9.5%.

Stock Option Activity

	Number of shares		Weighted-average exercise price per option		Weighted-average remaining contractual term	Aggregate intrinsic value
Stock Options
Outstanding options at beginning of year		957,400	$	4.50	5.1 years	$	16,878
Options granted		—		—			—
Options expired and canceled		—		—			—
Options exercised		—		—			—
Outstanding options at end of quarter		957,400	$	4.50	4.8 years	$	2,850
Options exercisable at end of quarter		849,808	$	4.76	4.2 years	$	1,900