Share-Based Compensation

The Tillys 2012 Amended and Restated Equity and Incentive Award Plan, as amended in June 2014 (the "2012 Plan"), authorizes up to 4,413,900 shares for issuance of options, shares or rights to acquire our Class A common stock and allows for, among other things, operating income and comparable store sales growth targets as additional performance goals that may be used in connection with performance-based awards granted under the 2012 Plan. As of February 1, 2020, there were 1,042,027 shares available for future issuance under the 2012 Plan.

Options

We grant stock options to certain employees that gives them the right to acquire our Class A common stock under the 2012 Plan. The exercise price of options granted is equal to the closing price per share of our stock at the date of grant. The non-qualified options vest at a rate of 25% on each of the first four anniversaries of the grant date provided that the award recipient continues to be employed by us through each of those vesting dates, and expire ten years from the date of grant.

The following table summarizes our stock option activity for fiscal year 2019:



	Stock Options	Grant Date Weighted Average Exercise Price	Weighted Average Remaining Contractual Life (in Years)	Aggregate Intrinsic Value(1)
			(in years)	($ in thousands)
Outstanding at February 2, 2019	1,736,250	$9.47
Granted	733,500	$10.60
Exercised	(181,001)	$8.78
Forfeited	(120,967)	$10.11
Expired	(174,595)	$14.19
Outstanding at February 1, 2020	1,993,187	$9.50	7.2	$1,463
Exercisable at February 1, 2020	974,670	$8.85	5.4	$1,361


(1)	Intrinsic value for stock options is defined as the difference between the market price of our Class A common stock on the last business day of the fiscal year and the weighted average exercise price of in-the-money stock options outstanding at the end of each fiscal period. The market value per share was $8.50 at February 1, 2020.

The total intrinsic value of options exercised in fiscal years 2019, 2018 and 2017 was $0.5 million, $2.0 million and $1.3 million, respectively.

The total fair value of options vested in fiscal years 2019, 2018 and 2017 was $1.8 million, $1.6 million and $1.6 million, respectively.

The total proceeds received from the exercise of stock options in fiscal years 2019, 2018 and 2017 was $1.6 million, $3.7 million and $3.4 million, respectively. The tax benefit realized from stock options exercised in fiscal years 2019, 2018 and 2017 was $0.1 million, $0.5 million and $0.5 million, respectively.

The stock option awards were measured at fair value on the grant date using the Black-Scholes option valuation model. Key input assumptions used to estimate the fair value of stock options include the exercise price of the award, the expected option term, expected volatility of our stock over the option’s expected term, the risk-free interest rate over the option’s expected term and our expected annual dividend yield, if any. We will issue shares of Class A common stock when the options are exercised. The fair values of stock options granted in fiscal years 2019, 2018 and 2017 were estimated on the grant dates using the following assumptions:



	Fiscal Year Ended
	February 1, 2020	February 2, 2019	February 3, 2018
Weighted average grant-date fair value per option granted	$5.10	$5.45	$3.99
Expected option term (1)	5.0 years	5.0 years	5.0 years
Expected volatility factor (2)	53.8%	51.6%	50.3%
Risk-free interest rate (3)	2.1%	2.6%	1.93%
Expected annual dividend yield (4)	—%	—%	—%


(1)	We have limited historical information regarding expected option term. Accordingly, we determine the expected option term of the awards using the latest historical data available from comparable public companies and management’s expectation of exercise behavior.


(2)	Stock volatility for each grant is measured using the weighted average of historical daily price changes of our common stock over the most recent period equal to the expected option term of the awards.


(3)	The risk-free interest rate is determined using the rate on treasury securities with the same term as the expected life of the stock option as of the grant date.


(4)	We do not have a dividend policy and we do not anticipate paying any additional cash dividends on our common stock at this time.

Restricted Stock

Restricted stock awards ("RSAs") represent restricted shares issued upon the date of grant in which the recipient's rights in the stock are restricted until the shares are vested, whereas restricted stock units represent shares issuable in the future upon vesting. Under the 2012 Plan, we grant RSAs to independent members of our Board of Directors and restricted stock units to certain employees. RSAs granted to Board members vest at a rate of 50% on each of the first two anniversaries of the grant date provided that the respective award recipient continues to serve on our Board of Directors through each of those vesting dates. The restricted stock units granted to certain employees vest at a rate of 25% on each of the first four anniversaries of the grant date provided that the respective recipient continues to be employed by us through each of those vesting dates. We determine the fair value of restricted stock underlying the RSAs and restricted stock units based upon the closing price of our Class A common stock on the date of grant.

A summary of the status of non-vested restricted stock as of February 1, 2020 and changes during fiscal year 2019 are presented below:



	Shares	Weighted- Average Grant-Date Fair Value
Nonvested at February 2, 2019	60,901	$14.32
Granted	41,184	$7.77
Vested	(50,165)	$14.20
Nonvested at February 1, 2020	51,920	$9.24

The weighted-average grant-date fair value of restricted stock granted during the years ended February 2, 2019 and February 3, 2018 was $14.90 and $10.39, respectively.

The total fair value of restricted stock vested was $0.5 million, $0.9 million and $0.7 million in fiscal years 2019, 2018 and 2017, respectively.

Share-based compensation expense associated with stock options and restricted stock is recognized on a straight-line basis over the requisite service period. The following table summarizes share-based compensation recorded in the accompanying Consolidated Statements of Income (in thousands):



	Fiscal Year Ended
	February 1, 2020	February 2, 2019	February 3, 2018
Cost of goods sold	$482	$517	$612
Selling, general and administrative expenses	1,654	1,695	1,799
Total share-based compensation	$2,136	$2,212	$2,411

At February 1, 2020, there was $4.1 million of total unrecognized share-based compensation expense related to unvested stock options and restricted stock awards. This cost has a weighted average remaining recognition period of 2.8 years.