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Stock-Based Compensation | 9 Months Ended
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Oct. 29, 2022
Share-Based Payment Arrangement [Abstract] |
Stock-Based Compensation | 6. Stock-Based Compensation The Company has one active stock-based compensation plan: the 2016 Incentive Compensation Plan (the “2016 Plan”). The initial share reserve under the 2016 Plan was 5,725,538 shares of common stock. A grant of a stock option award or stock appreciation right will reduce the outstanding reserve on a one-for-one basis, meaning one share for every share granted. A grant of a full-value award, including, but not limited to, restricted stock, restricted stock units and deferred stock, will reduce the outstanding reserve by a fixed ratio of 1.9 shares for every share granted. The Company’s shareholders approved amendments to increase the share reserve by 2,800,000 shares on August 8, 2019, an additional 1,740,000 shares on August 12, 2020 and an additional 4,855,000 on August 5, 2021. At October 29, 2022, the Company had 3,975,145 shares available under the 2016 Plan. In accordance with the terms of the 2016 Plan, any shares outstanding under the previous 2006 Incentive Compensation Plan (the “2006 Plan”) at August 4, 2016 that subsequently terminate, expire or are cancelled for any reason without having been exercised or paid are added back and become available for issuance under the 2016 Plan, with stock options being added back on a one-for-one basis and full-value awards being added back on a 1 to 1.9 basis. At October 29, 2022, 263,341 stock options remained outstanding under the 2006 Plan. The 2016 Plan is administered by the Compensation Committee. The Compensation Committee is authorized to make all determinations with respect to amounts and conditions covering awards. Options are not granted at a price less than fair value on the date of the grant. Except with respect to 5% of the shares available for awards under the 2016 Plan, no award will become exercisable unless such award has been outstanding for a minimum period of one year from its date of grant. The following tables summarize the share activity and stock option activity for the first nine months of fiscal 2022:
|  | RSUs (1) |  |  | Deferred shares (2) |  |  | Performance Share Units (3) |  |  | Fully-Vested Shares (4) |  |  | Total number of shares |  |  | Weighted- average grant-date fair value |
Shares |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Outstanding non-vested shares at beginning of year |  |  | 515,291 |  |  |  | 435,568 |  |  |  | 240,000 |  |  |  | — |  |  |  | 1,190,859 |  |  | $ | 1.57 |
Shares granted |  |  | 563,691 |  |  |  | — |  |  |  | — |  |  |  | 27,386 |  |  |  | 591,077 |  |  | $ | 5.09 |
Shares vested and/or issued |  |  | (584,359 | ) |  |  | — |  |  |  | — |  |  |  | (27,386 | ) |  |  | (611,745 | ) |  | $ | 3.52 |
Shares forfeited |  |  | (23,617 | ) |  |  |  |  |  |  |  |  |  |  |  | (23,617 | ) |  | $ | 3.89 |
Outstanding non-vested shares at end of quarter |  |  | 471,006 |  |  |  | 435,568 |  |  |  | 240,000 |  |  |  | — |  |  |  | 1,146,574 |  |  | $ | 2.30 |
(1) During the first nine months of fiscal 2022, the Company granted RSUs for the achievement of performance metrics under the 2019-2021 LTIP that were subject to additional vesting through August 31, 2022 and time-based RSUs under its 2022-2024 LTIP. See Note 5, Long-Term Incentive Plans. As a result of net share settlements, of the 584,359 RSUs that vested, only 419,542 shares of common stock were issued. (2) The outstanding deferred shares will be issued upon the director’s separation from service. (3) Represents the remaining performance stock units (“PSUs”) granted to Mr. Kanter in February 2019. The 240,000 PSUs will vest when the trailing 90-day volume-weighted average closing stock price (“VWAP”) is $8.00. The PSUs will expire on April 1, 2023 if the $8.00 VWAP is not achieved by that date. (4) Represents compensation, with a fair value of $121,485, to certain directors, who are required to receive shares, in lieu of cash, in order to satisfy their minimum equity ownership under the Non-Employee Director Plan. Voluntary shares received, in lieu of cash, are reported below under Non-Employee Director Compensation Plan.
|  | 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 |  |  | 4,621,550 |  |  | $ | 0.90 |  |  | 8.2 years |  |  | $ | 16,066,914 |
Options granted |  |  | 15,747 |  |  | $ | 5.41 |  |  |  | — |  |  |  | 1,262 |
Options exercised (1) |  |  | (752,938 | ) |  | $ | 0.71 |  |  |  |  |  |  | 3,636,343 |
Options expired and canceled |  |  | (177,454 | ) |  | $ | 1.18 |  |  |  | — |  |  |  | 804,868 |
Outstanding options at end of quarter |  |  | 3,706,905 |  |  | $ | 0.95 |  |  | 7.4 years |  |  | $ | 21,505,348 |
Options exercisable at end of quarter |  |  | 1,242,201 |  |  | $ | 1.56 |  |  | 6.3 years |  |  | $ | 6,447,396 |
(1) As a result of net share settlements, of the 752,938 shares underlying stock options that were exercised during the first nine months of fiscal 2022, only 527,712 shares of common stock were issued. For the first nine months of fiscal 2022, the Company granted stock options to purchase an aggregate of 15,747 shares of common stock, 563,691 restricted stock units and 27,386 fully-vested shares. For the first nine months of fiscal 2021, the Company granted stock options to purchase an aggregate of 1,518,154 shares of common stock and 8,054 restricted stock units. Non-Employee Director Compensation Plan The Company granted 57,307 shares of common stock, with a fair value of approximately $254,218, to certain of its non-employee directors as compensation in lieu of cash in the first nine months of fiscal 2022. These shares are in addition to any shares that may be granted under the 2016 Plan related to the requirement to receive equity if a director has not yet satisfied his or her minimum equity ownership requirement under the Non-Employee Director Compensation Plan. Stock Compensation Expense The Company recognized total stock-based compensation expense of $1.1 million and $0.9 million for the first nine months of fiscal 2022 and fiscal 2021, respectively. The total compensation cost related to time-vested stock options and RSU awards not yet recognized as of October 29, 2022 was approximately $2.2 million, net of estimated forfeitures, which will be expensed over a weighted average remaining life of 32 months.

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