Note 6. Share-Based Compensation

Employee Stock Plans

Vince 2013 Incentive Plan

In connection with the IPO, the Company adopted the Vince 2013 Incentive Plan, which provides for grants of stock options, stock appreciation rights, restricted stock and other stock-based awards. The aggregate number of shares of common stock which may be issued or used for reference purposes under the Vince 2013 Incentive Plan or with respect to which awards may be granted may not exceed 340,000 shares, as adjusted to reflect the Reverse Stock Split. The shares available for issuance under the Vince 2013 Incentive Plan may be, in whole or in part, either authorized and unissued shares of the Company’s common stock or shares of common stock held in or acquired for the Company’s treasury. In general, if awards under the Vince 2013 Incentive Plan are cancelled for any reason, or expire or terminate unexercised, the shares covered by such award may again be available for the grant of awards under the Vince 2013 Incentive Plan. As of October 28, 2017, there were 148,103 shares under the Vince 2013 Incentive Plan available for future grants. Options granted pursuant to the Vince 2013 Incentive Plan typically vest in equal installments over four years, subject to the employees’ continued employment and expire on the earlier of the tenth anniversary of the grant date or upon termination as outlined in the Vince 2013 Incentive Plan. Restricted stock units granted vest in equal installments over a three-year period or vest in equal installments over four years, subject to the employees’ continued employment.

Employee Stock Purchase Plan

The Company maintains an employee stock purchase plan (“ESPP”) for its employees. Under the ESPP, all eligible employees may contribute up to 10% of their base compensation, up to a maximum contribution of $10 per year. The purchase price of the stock is 90% of the fair market value, with purchases executed on a quarterly basis. The plan is defined as compensatory, and accordingly, a charge for compensation expense is recorded to selling, general and administrative expense for the difference between the fair market value and the discounted purchase price of the Company’s Stock. During the nine months ended October 28, 2017, 4,244 shares of common stock were issued under the ESPP. During the nine months ended October 29, 2016, the activity under the ESPP was not significant. As of October 28, 2017, there were 94,979 shares available for future issuance under the ESPP, as adjusted to reflect the Reverse Stock Split.

Stock Options

A summary of stock option activity for both employees and non-employees for the nine months ended October 28, 2017 is as follows:

	Stock Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (in thousands)
Outstanding at January 28, 2017		225,812		$	45.27		8.9	$	—
Granted		17,150		$	10.36
Exercised		—		$	—
Forfeited or expired		(70,323	)	$	42.76
Outstanding at October 28, 2017		172,639		$	42.83		8.3	$	—

Vested and exercisable at October 28, 2017		71,575		$	44.77		8.1	$	—

Of the above outstanding shares, 101,064 are expected to vest.

As permitted by new accounting guidance that became effective for the Company on January 29, 2017, the Company has elected to account for forfeitures as they occur, which resulted in an increase of $84 to accumulated deficit within the Condensed Consolidated Balance Sheet.

Restricted Stock Units

A summary of restricted stock unit activity for the nine months ended October 28, 2017 is as follows:

	Restricted Stock Units			Weighted Average Grant Date Fair Value
Nonvested restricted stock units at January 28, 2017		10,771		$	65.52
Granted		7,500		$	6.00
Vested		(2,743	)	$	71.03
Forfeited		(882	)	$	59.80
Nonvested restricted stock units at October 28, 2017		14,646		$	34.35

Share-Based Compensation Expense

The Company recognized share-based compensation expense of $429 and $638 (including expense of $296 related to non-employees) during the three months ended October 28, 2017 and October 29, 2016, respectively. The Company recognized share-based compensation expense of $912 and $1,383 (including expense of $709 related to non-employees) during the nine months ended October 28, 2017 and October 29, 2016, respectively.