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Benefit Plans
 12 Months Ended
Jan. 28, 2023
Benefit Plans [Abstract]  
Benefit Plans
Note 9. 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 $342,000 and $324,000 in fiscal 2022 and fiscal 2021, respectively.

Stock Award Plans

As of January 28, 2023, there was approximately $0.2 million of unrecognized compensation cost related to stock option awards expected to be recognized as expense over a weighted average period of 2.9 years and $0.3 million of unrecognized compensation cost related to restricted share awards expected to be recognized as expense over a weighted average period of 1.5 years. Total compensation expense related to stock awards recognized in fiscal 2022 was $0.2 million. Total compensation expense related to stock awards recognized in fiscal 2021 was $0.4 million.

The Company has outstanding awards under four 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 2005 Long Term Incentive and Share Award Plan (as amended and restated April 5, 2017 (the “Old Plans”); and Kaspien Holdings Inc. 2005 Long Term Incentive and Share Award Plan (as amended and restated on August 2, 2022) (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 500,000. As of January 28, 2023, of the awards authorized for issuance under the Stock Award Plans, approximately 143,142 were granted and are outstanding, 26,696 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 28, 2023 were 443,000.

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:

   
2022
    
2021
  
Dividend yield
    
0
 %    
0
 %
Expected stock price volatility
    
98.6%-140.2
%
    
100.6%-115.6
%
Risk-free interest rate
    
2.73-4.36
%
    
1.29%-1.46
%
Expected award life (in years)
    
4.93-7.12
      
4.93-6.98
  
Weighted average fair value per share of awards granted during the year
  
$
2.09
    
$
20.58
  

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 January 30, 2021
    
133,356
    
$
3.51-$97.40
    
$
20.41
      
-
    
$
-
  
Granted
    
6,637
    
$
20.41-$32.54
      
25.69
      
111,500
      
16.09
  
Cancelled/Forfeited
    
(51,625
)
  
$
7.12-$36.00
      
33.36
      
(12,500
)
    
(18.07
)
Exercised
    
(2,403
)
   $
7.12
      
7.12
      
(9,000
)
    
(20.41
)
Balance January 29, 2022
    
85,965
    
$
3.51-$97.40
    
$
13.41
      
90,000
    
$
15.39
  
Granted
    
82,500
    
$
0.85-$6.55
      
2.09
      
9,000
      
4.59
  
Cancelled/Forfeited
    
(44,823
)
  
$
0.85-$50.60
      
10.47
      
(62,750
)
    
(14.11
)
Exercised
    
-
    
$
-
      
-
      
(16,750
)
    
(10.92
)
Balance January 28, 2023
    
123,642
    
$
0.85-$97.40
    
$
6.00
      
19,500
    
$
18.35
  

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

As of January 28, 2023, the aggregate intrinsic value of all outstanding and vested awards based on the Company’s closing common stock price of $0.87 as of January 28, 2023 was $1,065 and $0, 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.

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.

For each of fiscal 2022 and 2021, net periodic benefit cost recognized under the SERP totaled approximately $0.4 million and $0.3 million, respectively. The accrued pension liability for both plans was approximately $12.8 million and $15.3 million as of January 28, 2023 and January 29, 2022, respectively, and is recorded within other long-term liabilities on the Consolidated Balance Sheets. The accumulated benefit obligation for both plans was $14.8 million and $15.4 million as of the fiscal years ended January 28, 2023 and January 29, 2022, 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 28,
2023
    
January 29,
2022
  
Change in Projected Benefit Obligation:
            
Benefit obligation at beginning of year
  
$
15,343
    
$
17,371
  
Service cost
    
-
      
-
  
Interest cost
    
556
      
252
  
Actuarial gain
    
(1,996
)
    
(1,096
)
Benefits paid
    
(1,150
)
    
(1,184
)
Benefit obligation at end of year
  
$
12,753
    
$
15,343
  
                 
Fair value of plan assets at end of year
  
$
-
    
$
-
  
                 
Funded status
  
$
(12,753
)
  
$
(15,343
)
Unrecognized net actuarial loss
    
(2,015
)
    
(19
)
Accrued benefit cost
  
$
(14,768
)
  
$
(15,362
)

Amounts recognized in the Consolidated Balance Sheets consist of:

   
January 28,
2023
    
January 29,
2022
  
(amounts in thousands)
            
Current liability
  
$
(1,158
)
  
$
(1,158
)
Long term liability
    
(11,604
)
    
(14,185
)
Accumulated other comprehensive loss
    
(2,006
)
    
(12
)
Net amount recognized
  
$
(14,768
)
  
$
(15,355
)

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

Net Periodic Benefit Cost:

   
Fiscal Year
  
   
2022
    
2021
  
Service cost
  
$
-
    
$
-
  
Interest cost
    
556
      
252
  
Amortization of actuarial net gain
    
-
      
-
Net periodic benefit cost
  
$
556
    
$
252
  

Other Changes in Benefit Obligations Recognized in Other Comprehensive Loss:

   
2022
    
2021
  
Net prior service cost recognized as a component of net periodic benefit cost
  
$
-
    
$
-
  
Net actuarial (gain) loss arising during the period
    
(1,796
)
    
(1,097
)
     
(1,796
)
    
(1,097
)
Income tax effect
    
-
      
-
  
Total recognized in other comprehensive loss
  
$
(1,796
)
  
$
(1,097
)
Total recognized in net periodic benefit cost and other comprehensive loss
  
$
(1,240
)
  
$
(844
)

(amounts in thousands)
  
January 28,
    
January 29,
  
   
2023
    
2022
  
Net unrecognized actuarial loss
  
$
(1,796
)
  
$
(1,097
)
Other actuarial adjustments
    
(190
)
    
907
  
Accumulated other comprehensive loss
  
$
(1,986
)
  
$
(190
)
Tax expense
    
1,100
      
1,100
  
Accumulated other comprehensive loss
  
$
(886
)
  
$
910
  

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 28, 2023 and January 29, 2022 and the tax effect are summarized below.

   
2022
    
2021
  
Weighted-average assumptions used to determine benefit obligation:
            
Discount rate
    
4.40
%
    
2.58
%
Salary increase rate
    
0.00
%
    
0.00
%
Measurement date
  
Jan 31, 2023
    
Jan 31, 2022
  

   
Fiscal Year
  
   
2022
    
2021
  
Weighted-average assumptions used to determine net periodic benefit cost:
            
Discount rate
    
4.40
%
    
2.58
%
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)
      
2023
    
1,149
  
2024
    
1,149
  
2025
    
1,269
  
2026
    
1,309
  
2027
    
1,309
  
2028 – 2032
    
6,376