(

)

Stock Incentive Plans

2004,

the Company adopted the Build-A-Bear Workshop, Inc.

2004

Stock Incentive Plan which the Company amended and restated in

2009

and

2014

(collectively, the Incentive Plans).

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

“2017

Plan”). On

May 11, 2017,

at the Company’s

2017

Annual Meeting of Stockholders, the Company’s stockholders approved the

2017

Plan. The

2017

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

2017

Plan. The Board

may

amend, modify or terminate the

2017

Plan at any time, except as otherwise provided in the

2017

Plan. The

2017

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

2017

Plan is

1,000,000,

plus shares of stock subject to outstanding awards made under the Incentive Plans that on or after

March 21, 2017

may

be forfeited, expire or be settled for cash.

April 2019,

our board of directors approved amendments to the

2017

Restricted Stock & Non-Qualified Stock Option Agreement and the

2018

Restricted Stock Agreement as a result of the unanticipated consolidated pre-tax loss in fiscal year

2018.

For the

2017

awards, the agreement amended the calculation of the fiscal

2019

performance section to increase the pre-tax income achievement levels for the Performance-Based Restricted Stock Award. The modification of this award affected the

six

employees who received the award,

none

of whom had forfeited their award as of

February 1, 2020.

For the

2018

award, the agreement increased the pre-tax income achievement levels for the fiscal

2019

and provided that in the event the Company incurred a pre-tax loss in fiscal

2019,

the fiscal

2020

pre-tax income achievement levels would likewise be increased. The modification of this award affected the

one

employee who received the award and who had

not

forfeited the award as of

February 1, 2020.

There was

incremental cost to the modification of either award.

(a)

Stock Options

The following table is a summary of the balance and activity for the Plans related to stock options for the periods presented:

	Options
	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value (in thousands)
Outstanding, February 2, 2019		950,678			9.67
Granted		-			-
Exercised		(5,980	)		4.90
Expired		(21,444	)		7.19
Outstanding, February 1, 2020		923,254		$	9.76		3.9	$	-

Options Exercisable as of:
February 1, 2020		686,353		$	10.15		4.1	$	-

There were

options granted during fiscal

2019

. The expense recorded related to options granted during fiscal

2018

was determined using the Black-Scholes option pricing model and the provisions of SAB

107

and

110,

which allow the use of a simplified method to estimate the expected term of “plain vanilla” options.

The assumptions used in the option pricing model during fiscal

2018

were:

	2018

Dividend yield		0	%
Historical volatility		50	%
Risk-free rate		2	%
Expected life		3.5
Weighted average grant date fair value	$	3.31

The total grant date fair value of options exercised in fiscal

2019

and

2018

was less than

$0.1

million and approximately $

0.2

million, respectively. The total intrinsic value of options exercised in fiscal

2019

and

2018

was less than

$0.1

million and approximately $

0.2

million, respectively. The Company generally issues new shares to satisfy option exercises.

Future total shares available for option, non-vested stock and restricted stock grants were

366,109

and

529,098

at the end of

2019

and

2018

, respectively.

(b)

Restricted Stock

The Company granted restricted stock awards that vest over a

one

three

-year period. Recipients of time-based restricted stock awards have the right to vote and receive dividends as to all unvested shares. Recipients of performance-based restricted stock awards have the right to vote and receive dividends upon satisfaction of the performance criteria and certain of these awards’ dividend rights are also subject to time-based vesting. The following table is a summary of the balance and activity for the Plans related to unvested time-based and performance-based restricted stock granted as compensation to employees and directors for the periods presented:

	Time-Based Restricted Stock					Performance-Based Restricted Stock
	Shares			Weighted Average Grant Date Fair Value		Shares		Weighted Average Grant Date Fair Value
Outstanding, February 2, 2019		379,778		$	9.31		167,153	$	8.73
Granted		319,831			5.64		95,811		5.61
Vested		(217,972	)		9.76		-		-
Forfeited		(28,234	)		6.04		-		-
Outstanding, February 1, 2020		453,403		$	6.71		262,964	$	7.59

In fiscal

2019

, the Company awarded

three

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

2019,

2020,

and

2021.

The target number of shares awarded was

95,811

with a weighted average grant date fair value of $

5.61

per share. This performance-based restricted stock award had a payout opportunity ranging from

25%

200%

of the target number of shares. Based on the Company’s pre-tax income results for fiscal

2019

, the Company currently estimates the minimum number of shares that will be earned is approximately

12,460,

assuming

forfeitures. The Company is currently unable to estimate the total number of these shares expected to be earned.

In fiscal

2018,

the Company awarded

three

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

2018,

2019

and

2020.

The target number of shares awarded was

62,500

with a weighted average grant date fair value of

$8.60

per share. 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.

The target number of shares awarded was

20,756

with a weighted average grant date fair value of

$8.60

per share. Both of these performance-based restricted stock awards had a payout opportunity ranging from

25%

200%

of the target number of shares. Based on the Company’s financial results for fiscal

2018

and

2019,

the Company currently estimates the minimum number of shares that will be earned is approximately

16,260

assuming

forfeitures. The Company is currently unable to estimate the total number of these shares expected to be earned.

In fiscal

2017,

the Company awarded

three

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

2017,

2018

and

2019.

The target number of shares awarded was

83,897

with a weighted average grant date fair value of

$8.85

per share. These shares of performance-based restricted stock had a payout opportunity ranging from

25%

200%

of the target number of shares. Based on the Company’s pre-tax income results for fiscal

2017,

2018

and

2019,

the number of shares expected to be earned is

28,189,

assuming

forfeitures, resulting in

55,708

shares being cancelled on the vesting date.

e vesting date fair value of shares that vested in fiscal

2019

and

2018

was $

2.1

million and $

2.2

million, respectively.