In January 2006 the stockholders of the Company approved the adoption of the 2005 Equity Incentive Plan (as amended and restated, the “2005 Plan”) and, subsequently, have approved amendments to increase the number of issuable shares. Under the 2005 Plan, employees, directors, consultants and other individuals who provide services to the Company may be granted awards in the form of stock options, stock appreciation rights, restricted stock, restricted stock units or deferred stock units. Up to 3,550,000 shares of the Company’s common stock may be issued in respect of awards under the 2005 Plan, as amended, with no more than 2,250,000 of those shares permitted to be issued in respect of restricted stock, restricted stock units, or deferred stock units granted under the 2005 Plan. Awards of stock options to purchase the Company’s common stock will have exercise prices as determined by the Compensation Committee of the Board of Directors (the “Compensation Committee”), but such exercise prices may not be lower than the fair market value of the stock on the date of grant.

The majority of stock options granted under the 2005 Plan vest ratably over four-year periods and expire ten years from the date of grant, and restricted stock awards and restricted stock units granted generally have restrictions that lapse ratably over four years. However, awards with respect to up to 177,500 shares of common stock may be granted under the 2005 Plan with a vesting period of less than one year. The non-executive chairman of the Company’s Board of Directors is granted 6,000 shares of restricted stock and each non-employee director of the Company’s Board of Directors, other than the non-executive chairman and Christopher B. Morgan, is granted 4,000 shares of restricted stock on an annual basis that will vest within one year from the date of grant. The Company issues new shares of common stock upon exercise of vested stock options. As of February 3, 2019, there were 797,159 shares of the Company’s common stock available for grants of awards under the 2005 Plan.

	Outstanding Stock Options (in thousands)			Weighted Average Exercise Price		Weighted Average Remaining Life (in years)		Aggregate Intrinsic Value (in thousands)
Balance as of February 3, 2018		544		$	11.26
Granted		484			3.07
Exercised		—			—
Forfeited		(589	)		8.42
Expired		—			—
Balance as of February 2, 2019		439		$	6.06		8.4	$	71
Exercisable as of February 2, 2019		105		$	12.90		6.0	$	—

During fiscal 2018, 2017 and 2016 the total intrinsic value of stock options exercised was $1,000, $0 and $6,000, respectively, and the total cash received was $500, $0 and $6,000, respectively.

The weighted-average fair value of stock options granted during fiscal 2018 and 2016 was estimated to be $1.78 and $2.96 per option share, respectively. There were no stock options granted in fiscal 2017. The weighted-average fair value of each option granted is calculated on the date of grant using the Black-Scholes option pricing model.

Year Ended

February 2, 2019

February 3, 2018

January 28, 2017

Expected dividend yield

N/A

Expected price volatility

65.2%

N/A

45.0%

Risk-free interest rate

2.8%

N/A

1.3%

Expected life

5.2 years

N/A

5.3 years

Expected volatility was determined using a weighted average of the historic volatility of the Company’s common stock as of the option grant date measured over a period equal to the expected life of the grant. Risk-free interest rates were based on the United States Treasury yield curve in effect at the date of the grant. Expected lives were determined using a weighted average of the historic lives of previously issued grants of the Company’s stock options.

The following table summarizes information about stock options outstanding as of February 2, 2019:

	Stock Options Outstanding						Stock Options Exercisable
Range of Exercise Prices	Number Outstanding (in thousands)		Weighted Average Remaining Life		Weighted Average Exercise Price		Number Exercisable (in thousands)		Weighted Average Exercise Price
$ 2.65 to $ 5.00		222		9.3	$	2.70		—	$	—
5.01 to 10.00		143		8.5		6.38		36		7.49
10.01 to 31.38		74		5.5		15.51		69		15.70
$ 2.65 to $31.38		439		8.4		6.06		105	$	12.90

The following table summarizes information about restricted stock and restricted stock unit activity for the 2005 Plan and includes grants of 113,326 performance-based restricted stock units, which is the number of shares of common stock that would be delivered upon vesting assuming that the target level of performance is achieved. If performance was achieved at the maximum level, 226,652 shares of common stock would be delivered in respect of such performance-based restricted stock units.

	Outstanding Restricted Shares and Restricted Stock Units (in thousands)			Weighted Average Grant Date Fair Value
Unvested as of February 3, 2018		853		$	3.16
Granted		596			3.36
Vested		(171	)		7.38
Forfeited		(672	)		2.93
Unvested as of February 2, 2019		606		$	3.34

During fiscal 2018, 2017 and 2016, the Company’s Board of Directors received a cumulative total of 14,000, 22,000 and 13,867 shares of restricted stock, respectively, as compensation for their services. The awards will vest at the earlier of 1) one year from the grant date, 2) one day prior to the next annual meeting of stockholders, 3) the end of the grantee’s Board service other than via resignation, or 4) a change in control of the Company (as defined in the 2005 Plan). During fiscal 2016, 10,974 deferred stock units were awarded to members of the Company’s Board of Directors in lieu of cash retainers totaling $75,000.

Stock-based compensation expense in fiscal 2018, 2017 and 2016 was $971,000, $1,154,000, and $1,801,000 respectively. As of February 2, 2019, $2,247,000 of total unrecognized compensation cost related to all non-vested equity awards is expected to be recognized over a weighted-average period of 1.6 years.

During fiscal 2018, 2017 and 2016, certain stock option exercises and vesting restricted stock awards were net-share settled by the Company such that the Company withheld shares of the Company’s common stock, which had a fair market value equivalent to the minimum statutory obligation for the applicable income and employment taxes for the awards, and the Company remitted the cash value to the appropriate taxing authorities. The total shares withheld in connection with tax obligations, which were 43,053, 19,149 and 7,408 respectively, during fiscal 2018, 2017 and 2016, are reflected as repurchases of common stock in the accompanying financial statements and were based on the value of the Company’s common stock on the exercise or vesting date. The remaining shares, net of those withheld, were delivered to the award holders. Total payments for tax obligations to the tax authorities were $165,000, $57,000 and, $54,000 for fiscal 2018, 2017 and 2016, respectively.