Stock-based Compensation

March 14, 2017,

the Company’s Board of Directors (the Board) adopted, subject to stockholder approval, the Build-A-Bear Workshop, Inc.

2017

Omnibus Incentive Plan (the Incentive Plan). On

May 11, 2017,

at the Company’s

2017

Annual Meeting of Stockholders, the Company’s stockholders approved the Incentive Plan. The Incentive Plan, which is administered by the Compensation and Development Committee of the Board, permits the grant of stock options (including both incentive and non-qualified stock options), stock appreciation rights, restricted stock, cash and other stock-based awards, some of which

may

be performance-based pursuant to the terms of the Incentive Plan. The Board

may

amend, modify or terminate the Incentive Plan at any time, except as otherwise provided in the Incentive Plan. The Incentive Plan will terminate on

March 14, 2027,

unless earlier terminated by the Board. The number of shares of the Company’s common stock authorized for issuance under the Incentive Plan is

1,000,000,

plus shares of stock subject to outstanding awards made under the Company’s Third Amended and Restated

2004

Stock Incentive Plan that on or after

March 21, 2017

may

be forfeited, expire or be settled for cash.

For the

thirteen

and

thirty-nine

weeks ended

November 3, 2018

, selling, general and administrative expense includes

$0.9

million and

$2.6

million, respectively, of stock-based compensation expense. For the

thirteen

and

thirty-nine

weeks ended

October 28, 2017

, selling, general and administrative expense includes

$0.8

million and

$2.8

million, respectively, of stock-based compensation expense. As of

November 3, 2018

, there was

$3.9

million of total unrecognized compensation expense related to unvested restricted stock and option awards which is expected to be recognized over a weighted-average period of

1.4

years.

The following table is a summary of the balances and activity for stock options for the

thirty-nine

weeks ended

November 3, 2018

	Options
	Shares			Weighted Average Exercise Price
Outstanding, February 4, 2018		791,567		$	9.67
Granted		213,687			8.60
Exercised		(53,040	)		5.20
Forfeited		—			-
Canceled or expired		—			-
Outstanding, November 3, 2018		952,214		$	9.68

The following table is a summary of the balances and activity related to time-based and performance-based restricted stock for the

thirty-nine

weeks ended

November 3, 2018

	Restricted Stock					Performance Shares
	Shares			Weighted Average Grant Date Fair Value		Shares			Weighted Average Grant Date Fair Value
Outstanding, February 4, 2018		357,412		$	10.96		289,615		$	13.66
Granted		205,434			8.67		83,256			8.60
Vested		(177,960	)		11.82		(6,323	)		20.58
Forfeited		(1,391	)		13.64		(1,280	)		13.69
Canceled or expired		—			—		(50,000	)		20.80
Outstanding, November 3, 2018		383,495		$	9.33		315,268		$	11.05

The total fair value of shares vested during the

thirty-nine

weeks ended

November 3, 2018

and

October 28, 2017

was

$2.2

million and

$2.3

million, respectively.

March 2018,

the Company awarded

three

-year performance-based restricted stock subject to the achievement of pre-established consolidated total pre-tax income growth objectives for fiscal

2018,

2019

and

2020.

In addition, the Company awarded

three

-year performance-based restricted stock subject to the achievement of pre-established consolidated revenue growth objectives for fiscal

2018,

2019

and

2020.

These shares have a payout opportunity ranging from

25%

200%

of the target number of shares. In

2017,

the Company awarded

three

-year performance-based restricted stock subject to the achievement of pre-established pre-tax income growth objectives for

2017,

2018

and

2019.

2016,

the Company awarded

three

-year performance-based restricted stock subject to the achievement of pre-established cumulative total revenue goals for fiscal

2016,

2017

and

2018.

The outstanding performance shares as of

November 3, 2018

consist of the following:

	Performance Shares

Unearned shares subject to performance-based restrictions at target:
2016 - 2018 consolidated cumulative total revenues		148,115
2017 - 2019 consolidated pre-tax income growth objectives		83,897
2018 - 2020 consolidated total revenue growth objectives		20,756
2018 - 2020 consolidated pre-tax income growth objectives		62,500
Performance shares outstanding, November 3, 2018		315,268