In March 2011, the 2011 Stock Option Plan of Needle Holdings was adopted authorizing Needle Holdings to provide certain team members with options to purchase Needle Holdings common shares. In October 2012, as part of the formation of the Holding Company, the Stock Option Plan, dated October 16, 2012 (the “2012 Plan”), formerly known as the 2011 Stock Option Plan of Needle Holdings, was assumed by the Holding Company. With the approval of the JOANN Inc. 2021 Equity Incentive Plan, as discussed below, no additional grants will be made under the 2012 Plan.

In connection with its initial public offering, the Company adopted the JOANN Inc. 2021 Equity Incentive Plan (“2021 Plan”). The 2021 Plan provides for the grant of stock options, restricted stock units and other stock-based awards to team members and non-employee directors. The maximum number of shares of the Company's common stock available for issuance under the 2021 Plan is equal to 2,000,000 shares of the Company's common stock subject to an annual automatic increase equal to 4% of the total number of shares outstanding on the last day of the immediately preceding fiscal year or a lesser number as determined by the Company’s board of directors. As of January 29, 2022, there were 1,243,712 awards available to be issued under the 2021 Plan.

Stock options expire ten years after the date of grant. The options vest and become exercisable based on continued service to the Company. Stock options granted under the 2012 Plan vest over five years at 40 percent after the first two years and 20 percent each year thereafter. Stock options granted under the 2021 Plan have a graded vesting period of four years whereby one-fourth of the awards vest on each of the anniversaries of the grant date.

The following is a summary of stock option activity for fiscal 2022:


	Number of Options			Weighted-Average Exercise Price Per Option		Weighted-Average Remaining Contractual Term		Aggregate Intrinsic Value (in millions)
Outstanding at beginning of period		3,086,467		$	6.11
Granted		656,656		$	12.00
Exercised		(482,332	)	$	4.83
Cancelled		(419,339	)	$	5.49
Outstanding at end of period		2,841,452		$	7.78		7.0	$	8.4
Exercisable at end of period		1,105,349		$	8.64		5.2	$	1.9

The total intrinsic value of stock options exercised was $3.0 million and $0.6 million in fiscal 2022 and fiscal 2020, respectively. There were no stock options exercised in fiscal 2021, and as such, there was no intrinsic value to be calculated and no cash proceeds received. Cash proceeds from the exercise of stock option awards were $1.8 million and $0.3 million in fiscal 2022 and fiscal 2020, respectively.

The weighted-average fair value of options granted was estimated on the grant date using the Black-Scholes option-pricing model with the following assumptions:


	Fiscal Year Ended
	January 29, 2022			January 30, 2021			February 1, 2020
Weighted-average fair value per option	$	4.02		$	0.50		$	5.01
Expected volatility rate		48.00	%		41.25	%		39.01	%
Risk free interest rate		1.04	%		0.68	%		2.53	%
Expected term of options	6.3 years			7.0 years			7.0 years
Expected dividend yield		3.3	%		0.0	%		0.0	%

Expected stock price volatility was estimated using the historical volatility for industry peers based on daily price observations over a period equivalent to the expected term of the awards. The risk-free interest rate was determined using an interest rate based on U.S. Treasury zero-coupon notes with terms consistent with the expected term. The expected term was determined using a simplified approach, calculated as the mid-point between the graded vesting period and the contractual life of the award. The Company determined the dividend yield by dividing the expected annual dividend on the Company's stock by the option exercise price. The Company accounts for forfeiture of non-vested options as they occur.

The Company issued restricted stock units to certain team members, which have a vesting period of three years whereby one-third of the awards vest on each of the three anniversaries of the grant date. The Company also issued restricted stock units to non-employee members of its board of directors, all of which vest on the first anniversary of the grant date. The fair value for restricted stock units is calculated based on the stock price on the date of grant.

The following is a summary of restricted stock unit activity for fiscal 2022:


	Number of Restricted Stock Units			Weighted-Average Grant Date Fair Value
Unvested at beginning of period		—		$	—
Granted		216,838		$	12.83
Forfeited		(20,555	)	$	12.63
Unvested at end of period		196,283		$	12.85

The Company's ESPP allows eligible team members to purchase shares of the Company's common stock at a discount through payroll deductions. The ESPP consists of six-month offering periods, with a new offering period commencing on the first trading day on or after January 1 and July 1 of each year. Team members may purchase shares in each offering period at 85% of the market value of the Company's common stock at either the beginning of the offering period or the end of the offering period, whichever price is lower. The maximum number of shares of the Company's common stock available for issuance under the ESPP is equal to 400,000 shares subject to an annual automatic increase equal to the least of 1% of the total number of shares outstanding on the last day of the immediately preceding calendar year, 400,000 shares or a lesser number as determined by the Company’s board of directors. As of January 29, 2022, the Company had 800,000 shares of common stock available for issuance under the ESPP.

The following table shows the expense recognized by the Company for stock-based compensation:


	Fiscal Year Ended
	January 29, 2022		January 30, 2021		February 1, 2020
	(Dollars in millions)
Stock-based compensation expense	$	2.5	$	1.5	$	1.2