Stock Options and Stock Awards

9 Months Ended

Dec. 02, 2017

Stock Options and Stock Awards

Stock Options and Stock Awards

11. Stock Options and Stock Awards

The Company recognizes share-based compensation expense over the requisite service period of the award, net of an estimate for the impact of forfeitures. Operating results for the thirty-nine week periods ended December 2, 2017 and November 26, 2016 include $22,549 and $36,766, respectively, of compensation costs related to the Company’s stock-based compensation arrangements.

Beginning in fiscal 2015, the Company provided certain of its associates with performance based incentive plans under which the associates will receive a certain number of shares of the Company’s common stock based on the Company meeting certain financial and performance goals. During fiscal 2018, the Company issued performance units to certain of its associates. The performance units will be settled in cash based on the actual performance of the Company relative to certain financial performance goals and the stock price upon vesting. During the thirty-nine week periods ended December 2, 2017 and November 26, 2016, the Company incurred $3,482 and $14,448 related to these performance based incentive plans, respectively, which is recorded as a component of stock-based compensation expense.

The total number and type of newly awarded grants and the related weighted average fair value for the thirty-nine week periods ended December 2, 2017 and November 26, 2016 are as follows:

	December 2, 2017			November 26, 2016
	Shares	Weighted Average Fair Value		Shares	Weighted Average Fair Value
Stock options granted	1,000	$	1.08	—	$	N/A
Restricted stock awards granted	13,856	$	2.82	3,613	$	7.73
Total awards	14,856			3,613

Typically, stock options granted vest, and are subsequently exercisable in equal annual installments over a four-year period for employees. Restricted stock awards typically vest in equal annual installments over a three-year period.

The Company calculates the fair value of stock options using the Black- Scholes-Merton option pricing model. The following assumptions were used in the Black-Scholes-Merton option pricing model:

	Thirty-Nine Week Period Ended
	December 2, 2017		November 26, 2016
Expected stock price volatility	58	%	N/A
Expected dividend yield	0	%	N/A
Risk-free interest rate	1.9	%	N/A
Expected option life	5.5 years		N/A

As of December 2, 2017, the total unrecognized pre-tax compensation costs related to unvested stock options and restricted stock awards granted, net of estimated forfeitures and the weighted average period of cost amortization are as follows:

	December 2, 2017
	Unvested stock options		Unvested restricted stock		Unvested performance shares
Unrecognized pre-tax costs	$	7,057	$	38,971	$	12,253
Weighted average amortization period	1.62 years		2.1 years		2.3 years