NOTE 5. STOCK-BASED COMPENSATION

The Company expenses the fair value of all stock awards over their requisite service period, ensuring that the amount of cumulative stock-based compensation expense recognized at any date is at least equal to the portion of the grant-date fair value of the award that is vested at that date. The Company has elected to adjust stock-based compensation expense for an estimated forfeiture rate for those shares not expected to vest and to recognize stock-based compensation expense on a straight-line basis for awards that only have a service requirement with multiple vest dates.

The Company has granted the following types of stock awards to employees at management levels and above, each of which are granted under the Company’s stockholder approved stock plans, other than inducement grants outside of the Company’s stockholder approved stock plans in accordance with Nasdaq Listing Rule 5635(c)(4):

Deferred Awards are in the form of restricted stock units and only require each recipient to complete a service period for the awards to be earned. Deferred Awards generally vest over three years. The fair value of Deferred Awards is based on the closing price of the Company’s common stock on the grant date. Stock-based compensation expense is recognized ratably over the service period and is reduced for estimated forfeitures of those awards not expected to vest due to employee turnover.

ii.

Performance Awards are in the form of restricted stock units and have, in addition to a service requirement, financial performance criteria, event criteria and/or stock performance criteria that must be achieved for the awards to be earned. For Performance Awards with financial performance criteria, the Target Shares earned can range from 50% to 200% (such result, the “Earned Shares”) once minimum thresholds have been reached and depend on the achievement of certain financial measures for the cumulative period comprised of three-consecutive fiscal years beginning with the fiscal year of the grant date. Performance Awards are also subject to limitations under the Company’s stockholder approved stock plans. The applicable percentage of the Target Shares, as determined by the applicable performance measure, vest after the completion of the applicable three-year performance period and upon determination of achievement of the performance measures by the Compensation Committee of the Board of Directors. Unearned Target Shares are forfeited.

For Performance Awards granted in Fiscal 2025 with event criteria, the award vests at 100% of the Target Shares upon the occurrence of the event within a specified amount of time, absent which the award expires unvested. For the Performance Awards granted in Fiscal 2025 and Fiscal 2024 with stock performance criteria, the Target Shares earned can range from 0% to 100% based on the Company’s highest average per share common stock closing price, measured over any 20 consecutive trading-day period from and after the date of grant and during the three-consecutive fiscal years beginning with the fiscal year of the grant date.

The Performance Awards granted in Fiscal 2023 are also subject to a relative total shareholder return (“TSR”) modifier which is based on the Company’s total return to stockholders over the measurement period relative to a custom peer group. The Fiscal 2023 Performance Award TSR modifier can result in an adjustment of 75% to 125% of the Earned Shares, subject to an overall cap of 200% of Target Shares and a modifier limitation to 100% of Target Shares in the event TSR is negative.

The grant date fair value of the Performance Awards granted in Fiscal 2025 and Fiscal 2024 with financial performance criteria and event criteria, are based on the closing price of the Company’s common stock on the grant date. The grant date fair value for the Performance Awards granted in Fiscal 2025 and Fiscal 2024 with stock performance criteria and the Performance Awards granted in Fiscal 2023 with a relative TSR modifier are based on the Monte Carlo simulation model.

iii.

Stock-based compensation expense, including awards with market conditions, is recognized ratably over the related service period, reduced for estimated forfeitures of those awards not expected to vest due to employee turnover and adjusted based on the Company’s estimate of the percentage of the aggregate Target Shares expected to be earned. The Company accrues for Performance Awards on the basis of a 100% payout unless it becomes probable that the outcome will be significantly different, or the performance can be accurately measured. Stock-based compensation expense for awards with event criteria is not recognized until the event becomes probable.

iv.

Option Awards provide the recipient with the option to purchase a set number of shares at a stated exercise price over the term of the contract, which is ten years for all Option Awards currently outstanding. Options are granted with a strike price equal to the stock price on the date of grant and vest over the requisite service period of the award. The fair value of each Option Award is estimated on the grant date using the Black-Scholes option pricing model.

The following table provides a summary of the Company’s stock-based compensation expense, which is included in Selling and administrative expense in the Consolidated Statements of Operations:


(in thousands)	Fiscal 2025		Fiscal 2024		Fiscal 2023
Deferred awards	$	3,381	$	3,541	$	3,491
Performance awards (1)		1,784		917		(87	)
Option awards		312		415		423
Total stock-based compensation expense	$	5,477	$	4,873	$	3,827

(1)

Net credit expense for Fiscal 2023 includes a reduction of the accrual for Performance Awards based on actual and projected results relative to performance measures and forfeitures.

Deferred Awards

The following table provides a summary of the Deferred Awards activity for Fiscal 2025, Fiscal 2024 and Fiscal 2023.


	Fiscal Year Ended
	January 30, 2026					January 31, 2025					February 2, 2024
(in thousands, except per share amounts)	Number of Shares			Weighted Average Grant Date Fair Value		Number of Shares			Weighted Average Grant Date Fair Value		Number of Shares			Weighted Average Grant Date Fair Value
Deferred Awards at beginning of year		757		$	10.63		959		$	11.44		906		$	16.46
Granted		332			11.27		314			11.40		844			8.53
Vested		(309	)		11.98		(284	)		14.32		(449	)		12.21
Forfeited		(121	)		9.62		(232	)		10.48		(342	)		16.53
Deferred Awards at end of year		659		$	10.51		757		$	10.63		959		$	11.44

Total unrecognized stock-based compensation expense related to unvested Deferred Awards was approximately $3.7 million as of January 30, 2026, which is expected to be recognized ratably over a weighted average period of 1.7 years. The total fair value of Deferred Awards vested during Fiscal 2025 and Fiscal 2024 was $3.7 million and $4.1 million, respectively. Deferred Awards granted to employees during Fiscal 2025 vest over a period of three years.

Performance Awards

The following table provides a summary of the Performance Awards activity for Fiscal 2025, Fiscal 2024 and Fiscal 2023:


	Fiscal Year Ended
	January 30, 2026					January 31, 2025					February 2, 2024
(in thousands, except per share amounts)	Number of Shares			Weighted Average Grant Date Fair Value		Number of Shares			Weighted Average Grant Date Fair Value		Number of Shares			Weighted Average Grant Date Fair Value
Performance Awards at beginning of year		692		$	10.99		607		$	13.14		355		$	24.39
Granted		714			10.39		264		10.30			567			9.74
Change in estimate - performance		—			—		(57	)		29.95		—			—
Vested		—			—		—			—		—			-
Forfeited		(157	)		10.00		(122	)		11.46		(315	)		19.68
Performance Awards at end of year		1,249		$	10.23		692		$	10.99		607		$	13.14

Total unrecognized stock-based compensation expense related to unvested Performance Awards was approximately $2.9 million as of Fiscal 2025 which is expected to be recognized ratably over a weighted average period of 1.9 years. Additionally, total unrecognized stock-based compensation expense related to Performance Awards with event criteria was approximately $3.6 million, which is not expected to be recognized unless and until the event is probable of occurring. The Performance Awards granted to employees during Fiscal 2025 vest, if earned, after completion of the applicable performance period. The fair value of the 133,984 Performance Awards with stock performance criteria granted during Fiscal 2025 was estimated at $7.81 per share on the grant date using a Monte Carlo simulation.

Options Awards

The following table provides a summary of the changes in outstanding Options Awards for Fiscal 2025, Fiscal 2024 and Fiscal 2023.


	Fiscal Year Ended
	January 30, 2026					January 31, 2025					February 2, 2024
	Option Awards			Weighted Average Exercise Price per Share		Option Awards			Weighted Average Exercise Price per Share		Option Awards		Weighted Average Exercise Price per Share
(in thousands, except per share amounts)
Option Awards outstanding at beginning of year		217		$	13.34		511		$	16.08		511	$	16.08
Granted		—			—		—			—		—		—
Vested		—			—		—			—		—		—
Exercised		(84	)		10.81		—			—		—		—
Forfeited		—			—		(294	)		18.1		—		—
Option Awards outstanding at end of year		133		$	14.93		217		$	13.34		511	$	16.08

The following table provides a summary of information about the Option Awards vested and expected to vest during the contractual term, as well as Option Awards exercisable, as of January 30, 2026:


	Option Awards		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Aggregate Intrinsic Value
(in thousands, except per share and contractual life amounts)
Option Awards vested and expected to vest		133		4.7	$	14.93		584
Option Awards exercisable		133		4.7	$	14.93		584

There is no unrecognized stock-based compensation expense related to Option Awards as of January 30, 2026.

Historical Timeline

Fiscal Year	Filed
2026	Mar 26, 2026	Showing above
2025	Mar 27, 2025

2024	Apr 3, 2024

2023	Apr 10, 2023

About Stock Compensation Disclosures

Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.

Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.

LANDS' END, INC. Stock Compensation Disclosure

Historical Timeline

About Stock Compensation Disclosures

Other Available Disclosures