Stock Options and Stock Awards

9 Months Ended

Nov. 30, 2019

Stock Option and Stock Award Plans

Stock Options and Stock Awards

13. Stock Options and Stock Awards

The Company recognizes share-based compensation expense over the requisite service period of the award, net of an estimate for the impact of forfeitures. Operating results for the thirty-nine week periods ended November 30, 2019

and December 1, 2018 include $13,598 and $11,563, respectively, of compensation costs related to the Company’s stock-based compensation arrangements.

During fiscal 2018, the Company issued performance units to certain of its associates. The performance units will be settled in cash based on the actual performance of the Company relative to certain financial performance goals and the stock price upon vesting. During the thirty-nine week periods ended November 30, 2019 and December 1, 2018, the Company incurred a benefit of $715 compared to expense of $2,235 related to these performance based incentive plans, respectively, which is recorded as a component of stock-based compensation expense.

The total number and type of newly awarded grants and the related weighted average fair value for the thirty-nine week periods ended November 30, 2019 and December 1, 2018 are as follows:

	November 30, 2019			December 1, 2018
	Shares	Weighted Average Fair Value		Shares	Weighted Average Fair Value
Stock options granted	612	$	3.66	—	$	N/A
Restricted stock awards granted	1,345	$	7.70	25	$	33.40
Total awards	1,957			25

Typically, stock options granted vest, and are subsequently exercisable in equal annual installments over a four-year period for employees. Restricted stock awards typically vest in equal annual installments over a three-year period.

The Company calculates the fair value of stock options using the Black- Scholes-Merton option pricing model. The following assumptions were used in the Black-Scholes-Merton option pricing model:

	Thirty-Nine Week Period Ended
	November 30,	December 1,
	2019	2018
Expected stock price volatility	56%	N/A
Expected dividend yield	0%	N/A
Risk-free interest rate	1.5%	N/A
Expected option life	5.5 years	N/A

As of November 30, 2019, the total unrecognized pre-tax compensation costs related to unvested stock options and restricted stock awards granted, net of estimated forfeitures and the weighted average period of cost amortization are as follows:

	November 30, 2019
	Unvested		Unvested		Unvested
	stock		restricted		performance
	options		stock		shares
Unrecognized pre-tax costs	$	2,066	$	12,649	$	70
Weighted average amortization period		3.5 years		2.1 years		0.3 years