STOCK-BASED COMPENSATION

The Company expenses the fair value of all stock awards over their respective vesting periods, ensuring that, the amount of cumulative compensation cost recognized at any date is at least equal to the portion of the grant-date value of the award that is vested at that date. The Company has elected to adjust compensation expense for an estimated forfeiture rate for those shares not expected to vest and to recognize compensation cost on a straight-line basis for awards that only have a service requirement with multiple vest dates.

The Company has granted the following types of stock awards to employees at management levels and above:

Time vesting stock awards ("Deferred Awards") are in the form of restricted stock units and only require each recipient to complete a service period for the awards to be earned. Deferred Awards generally vest over three years or in full after a three year period. The fair value of Deferred Awards is based on the closing price of the Company's common stock on the grant date and is reduced for estimated forfeitures of those awards not expected to vest due to employee turnover.


ii.	Stock option awards ("Option Awards") provide the recipient with the option to purchase a set number of shares at a stated exercise price over the term of the contract, which is 10 years for all Option Awards currently outstanding.

iii.

Performance-based stock awards ("Performance Awards") are in the form of restricted stock units and have, in addition to a service requirement, performance criteria that must be achieved for the awards to be earned. Performance Awards have annual vesting, but due to the performance criteria, are not eligible for straight-line expensing. Therefore, Performance Awards are amortized using a graded expense process. Similar to Deferred Awards, Performance Awards fair value is based on the closing price of the Company's common stock on the grant date and the compensation expense is reduced for estimated forfeitures of those awards not expected to vest due to employee turnover.

The following table summarizes the Company's stock-based compensation expense, which is included in Selling and administrative expense in the Consolidated Statements of Operations:



(in thousands)	Fiscal 2017		Fiscal 2016		Fiscal 2015
Deferred Awards	$	3,212	$	1,599	$	1,534
Option Awards	651		—		—
Performance Awards	88		631		861
Total stock-based compensation expense	$	3,951	$	2,230	$	2,395

The following table provides a summary of the activities for stock awards for Fiscal 2017:



	Deferred Awards				Option Awards			Performance Awards
(in thousands, except per share amounts)	Number of Shares		Weighted Average Grant Date Fair Value per Share		Number of Shares	Weighted Average Grant Date Fair Value per Share		Number of Shares		Weighted Average Grant Date Fair Value per Share
Unvested Deferred Awards, as of January 27, 2017	252		$	24.42	—	$	—	69		$	26.38
Granted	422		21.49		343	8.73		—		—
Vested	(70	)	22.66		—	—		(41	)	28.33
Exercised	—		—		—	—		—		—
Forfeited or expired	(107	)	24.85		—	—		(13	)	25.20
Unvested Deferred Awards, as of February 2, 2018	497		22.07		343	8.73		15		21.94

The following table provides a summary of the activities for stock awards for Fiscal 2016:



	Deferred Awards				Option Awards			Performance Awards
(in thousands, except per share amounts)	Number of Shares		Weighted Average Grant Date Fair Value per Share		Number of Shares	Weighted Average Grant Date Fair Value per Share		Number of Shares		Weighted Average Grant Date Fair Value per Share
Unvested Deferred Awards, as of January 29, 2016	175		$	30.87	—	$	—	109		$	26.81
Granted	242		23.93		—	—		—		—
Vested	(27	)	33.53		—	—		(30	)	27.84
Exercised	—		—		—	—		—		—
Forfeited or expired	(138	)	30.05		—	—		(10	)	26.73
Unvested Deferred Awards, as of January 27, 2017	252		24.42		—	—		69		26.38

Total unrecognized stock-based compensation expense related to unvested Deferred Awards was approximately $7.3 million as of February 2, 2018, which is expected to be recognized ratably over a weighted average period of 2.3 years. Deferred Awards granted to various employees during Fiscal 2017 generally vest ratably for a period between fifteen months to four years.

There was no unrecognized stock-based compensation expense related to unvested Performance Awards as of February 2, 2018.

Total unrecognized stock-based compensation expense related to unvested Option Awards was approximately $2.3 million as of February 2, 2018, which is expected to be recognized ratably over a weighted average period of 3.1 years. The Option Awards vest ratably over 4.0 years and the contract to buy Option Awards extends for another 6.0 years. The fair value of each Option Award was estimated on the grant date using the Black-Scholes option pricing model. No Option Awards were exercisable as of February 2, 2018.

The fair value of Option Awards is determined on the grant date utilizing a Black-Scholes option pricing model. The following assumptions were utilized in deriving the fair value for Option Awards granted during Fiscal 2017:



Assumption	Low		High
Risk-free interest rate	1.82%	-	1.90%
Expected dividend yield	—%	-	—%
Volatility	45.59%	-	46.12%
Expected life (in years)	6.25	-	6.25
Weighted average exercise price per share	$18.10	-	$22.00

The simplified method was used to calculate the Expected life (in years) to be utilized in the Black-Scholes option pricing model applied to Option Awards granted in Fiscal 2017. The simplified method was used as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term of the Option Awards due to the limited period of time since the Company began publicly issuing shares.