Note 11. Benefit Plans

401(k) Savings Plan

Kaspien offers a 401(k) plan, the Kaspien Inc. 401(K) Plan, which permits participants to contribute up to the maximum allowable by IRS regulations. The Company matches 100% of the first 6% of employee contributions after completing one year of service. Participants are immediately vested in their voluntary contributions plus actual earnings thereon. Participant vesting of the Company’s matching contribution is based on the years of service completed by the participant. Participants are fully vested upon the completion of three years of service. All participant forfeitures of non-vested benefits are used to reduce the Company’s contributions or fees in future years.

Total expense related to the matching contributions was approximately $266,000 and $303,000 in fiscal 2020 and fiscal 2019, respectively.

Stock Award Plans

As of January 30, 2021, there was approximately $0.4 million of unrecognized compensation cost related to stock option awards expected to be recognized as expense over a weighted average period of 3.5 years. The FYE Transaction in February 2020 constituted a change of control and vesting on all unvested options was accelerated. As a result, unrecognized compensation expense of $0.2 million was recognized in fiscal 2020. Total compensation expense related to stock awards recognized in fiscal 2020 was $0.3 million.

The Company has outstanding awards under three employee stock award plans, the 2005 Long Term Incentive and Share Award Plan, the Amended and Restated 2005 Long Term Incentive and Share Award Plan (the “Old Plans”); and the 2005 Long Term Incentive and Share Award Plan (as amended and restated April 5, 2017 (the “New Plan”). Collectively, these plans are referred to herein as the Stock Award Plans. The Company no longer issues stock options under the Old Plans.

Equity awards authorized for issuance under the New Plan total 250,000. As of January 30, 2021, of the awards authorized for issuance under the Stock Award Plans, approximately 133,356 were granted and are outstanding, 45,025 of which were vested and exercisable. Shares available for future grants of options and other share-based awards under the New Plan as of January 30, 2021 were 145,419.

The fair values of the options granted have been estimated at the date of grant using the Black - Scholes option pricing model with the following assumptions:

	2020			2019
Dividend yield		0	%		0	%
Expected stock price volatility		88.0-105.5	%		63.7-70.1	%
Risk-free interest rate		0.28%-0.56	%		1.35%-1.62	%
Expected award life ( in years)		4.93-7.12			5.64-6.98
Weighted average fair value per share of awards granted during the year	$	5.81		$	4.46

The following table summarizes stock option activity under the Stock Award Plans:

	Employee and Director Stock Award Plans

	Number of Shares Subject To Option			Stock Award Exercise Price Range Per Share		Weighted Average Exercise Price		Other Share Awards ⁽¹⁾			Weighted Average Grant Fair Value/ Exercise Price

Balance February 2, 2019		138,921		$	19.60-$97.40	$	55.00		13,571		$	33.60
Granted		5,750		$	3.51-$5.40		3.76		-			-
Cancelled/Forfeited		(15,475	)	$	34.60-$95.40		57.68		-			-
Exercised		-			-		-		(3,626	)		5.66
Balance February 1, 2020		129,196		$	3.51-$97.40	$	52.11		9,945		$	36.75
Granted		98,898		$	3.68 -$10.75		7.36		-			-
Cancelled/Forfeited		(94,738	)	$	7.12 -$97.40		51.84		-			-
Exercised		-			-		-		(9,945	)		(36.75	)
Balance January 30, 2021		133,356		$	3.51-$97.40	$	20.41		-		$	-

⁽¹⁾Other Share Awards include deferred shares granted to executives and directors.

As of January 30, 2021, the aggregate intrinsic value of all outstanding and vested awards based on the Company’s closing common stock price of $38.56 as of January 30, 2021 was $3.3 million and $0.4 million, respectively. The aggregate intrinsic value represents the value which would have been received by the award holders had all award holders under the Stock Award Plans exercised their awards as of that date.

During fiscal 2019, the Company recognized approximately $40,000 in expenses for deferred shares issued to non-employee directors. There were no exercises of non-restricted stock options during fiscal 2020 and fiscal 2019.

Defined Benefit Plans

The Company maintains a non-qualified Supplemental Executive Retirement Plan (“SERP”) for certain Executive Officers of the Company. The SERP, which is unfunded, provides eligible executives defined pension benefits that supplement benefits under other retirement arrangements. The annual benefit amount is based on salary and bonus at the time of retirement and number of years of service.

Prior to June 1, 2003, the Company had provided the Board of Directors with a noncontributory, unfunded retirement plan (“Director Retirement Plan”) that paid retired directors an annual retirement benefit. The final payments due under the director retirement plan were made in fiscal 2020.

For fiscal 2020 and 2019, net periodic benefit cost recognized under both plans totaled approximately $0.3 million and $0.6 million, respectively. The accrued pension liability for both plans was approximately $17.4 million and $17.5 million as of January 30, 2021 and February 1, 2020, respectively, and is recorded within other long-term liabilities on the Consolidated Balance Sheets. The accumulated benefit obligation for both plans was $17.4 million and $17.7 million as of the fiscal years ended January 30, 2021 and February 1, 2020, respectively.

The following is a summary of the Company’s defined benefit pension plans as of each fiscal year-end:

Obligation and Funded Status:

(amounts in thousands)	January 30, 2021			February 1, 2020
Change in Projected Benefit Obligation:
Benefit obligation at beginning of year	$	17,673		$	17,476
Service cost		-			55
Interest cost		355			568
Actuarial loss		535			773
Benefits paid		(1,192	)		(1,199	)
Benefit obligation at end of year	$	17,371		$	17,673

Fair value of plan assets at end of year	$	-		$	-

Funded status	$	(17,371	)	$	(17,673	)
Unrecognized net actuarial loss		1,077			529
Accrued benefit cost	$	(16,294	)	$	(17,144	)

Amounts recognized in the Consolidated Balance Sheets consist of:

	January 30, 2021			February 1, 2020
(amounts in thousands)
Current liability	$	(1,184	)	$	(1,199	)
Long term liability		(16,722	)		(17,247	)
Accumulated other comprehensive loss		535			773
Net amount recognized	$	(17,371	)	$	(17,673	)

Components of Net Periodic Benefit Cost and Other Amounts Recognized in Other Comprehensive Loss:

Net Periodic Benefit Cost:

	Fiscal Year
	2020		2019
Service cost	$	-	$	55
Interest cost		355		568
Amortization of actuarial net gain		-		(20	)
Net periodic benefit cost	$	355	$	603

Other Changes in Benefit Obligations Recognized in Other Comprehensive Loss:

	2020		2019
Net prior service cost recognized as a component of net periodic benefit cost	$	-	$	-
Net actuarial loss arising during the period		528		744
		528		744
Income tax effect		-		-
Total recognized in other comprehensive loss	$	528	$	744
Total recognized in net periodic benefit cost and other comprehensive loss	$	883	$	1,341

The pre-tax components of accumulated other comprehensive loss, which have not yet been recognized as components of net periodic benefit cost as of January 30, 2021 and February 1, 2020 and the tax effect are summarized below.

(amounts in thousands)	January 30,		February 1,
	2021		2020
Net unrecognized actuarial loss	$	528	$	744
Other actuarial adjustments		379		(365	)
Accumulated other comprehensive loss	$	907	$	379
Tax expense		1,100		1,100
Accumulated other comprehensive loss	$	2,007	$	1,479

	Fiscal Year
	2020			2019
Weighted-average assumptions used to determine benefit obligation:
Discount rate		1.94	%		2.31	%
Salary increase rate		0.00	%		0.00	%
Measurement date	Jan 31, 2021			Jan 31, 2020

	Fiscal Year
	2020			2019
Weighted-average assumptions used to determine net periodic benefit cost:
Discount rate		1.94	%		2.31	%
Salary increase rate		N/A			N/A

The discount rate is based on the rates implicit in high-quality fixed-income investments currently available as of the measurement date. The Citigroup Pension Discount Curve (CPDC) rates are intended to represent the spot rates implied by the high-quality corporate bond market in the U.S. The projected benefit payments attributed to the projected benefit obligation have been discounted using the CPDC mid-year rates and the discount rate is the single constant rate that produces the same total present value.

The following benefit payments over the next ten years are expected to be paid:

Year	Pension Benefits
(amounts in thousands)
2021		1,184
2022		1,149
2023		1,149
2024		1,149
2025		1,269
2026 – 2030		6,511