The Tilly's, Inc. 2012 Third Amended and Restated Equity and Incentive Plan (the "2012 Plan"), authorizes up to 8,613,900 shares for issuance of options, shares or rights to acquire our Class A common stock and allows for, among other things, operating income and comparable store sales growth targets as additional performance goals that may be used in connection with performance-based awards granted under the 2012 Plan. As of May 2, 2026, there were 366,290 shares available for future issuance under the 2012 Plan.

We grant stock options to certain employees that give them the right to acquire our Class A common stock under the 2012 Plan. The exercise price of options granted is equal to the closing price per share of our stock at the date of grant. The non-qualified options vest at a rate of 25% on each of the first four anniversaries of the grant date provided that the award recipient continues to be employed by us through each of those vesting dates and expire ten years from the date of grant.

In fiscal year 2025, in conjunction with the hiring of our President and Chief Executive Officer, we granted 900,000 time-based stock options and 900,000 performance-based stock options pursuant to the 2012 Plan. Vesting of these performance-based stock options is dependent upon the achievement of certain stock price targets based on the 30 consecutive trading day trailing average market closing price of the Company's stock.


	Stock Options	Grant Date Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in Years)	Aggregate Intrinsic Value (1)
Outstanding at January 31, 2026	4,125,458	$	4.64
Granted	496,000	$	4.20
Exercised	(14,750)	$	3.95
Forfeited	(72,500)	$	5.22
Expired	(2,875)	$	6.74
Outstanding at May 2, 2026	4,531,333	$	4.59	8.0	$	5,512
Exercisable at May 2, 2026	1,503,833	$	8.06	5.3	$	304

(1)Intrinsic value for stock options is defined as the difference between the market price of our Class A common stock on the last business day of the fiscal period and the weighted average exercise price of in-the-money stock options outstanding at the end of the fiscal period. The market value per share was $4.40 at May 2, 2026.

The stock option awards were measured at fair value on the grant date using the Black-Scholes option valuation model. Key input assumptions used to estimate the fair value of stock options include the exercise price of the award, the expected option term, expected volatility of our stock over the option’s expected term, the risk-free interest rate over the option’s expected term and our expected annual dividend yield, if any. We account for forfeitures as they occur. We issue shares of Class A common stock when stock option awards are exercised.

The performance-based stock options were measured at fair value on the grant date using the Monte-Carlo valuation model. The Monte-Carlo valuation model uses multiple simulations to evaluate the probability of achieving various stock price levels in relation to the market condition. We expense compensation cost over the vesting period regardless of whether the market condition is ultimately achieved. Based on the Monte-Carlo valuation model, the total fair value as of the grant date of

performance-based stock options that vest based on market conditions was $1.2 million in fiscal year 2025. We did not award any performance-based stock options during the thirteen weeks ended May 2, 2026.

The fair values of stock options and performance-based stock options granted during the thirteen weeks ended May 2, 2026 and May 3, 2025 were estimated on the grant date using the following assumptions:


	Thirteen Weeks Ended
	May 2, 2026			May 3, 2025
Weighted average grant-date fair value per option granted	$	2.57		$	1.20
Expected option term (1)	5.7 years			5.4 years
Weighted average expected volatility factor (2)	65.0		%	57.0		%
Weighted average risk-free interest rate (3)	4.0		%	4.0		%
Expected annual dividend yield (4)	—		%	—		%

Restricted stock awards ("RSAs") represent restricted shares issued upon the date of grant in which the recipient's rights in the stock are restricted until the shares are vested, whereas restricted stock units ("RSUs") represent shares issuable in the future upon vesting. Under the 2012 Plan, we grant RSAs to independent members of our Board of Directors and RSUs to certain employees. RSAs granted to Board members vest at a rate of 50% on each of the first two anniversaries of the grant date provided that the respective award recipient continues to serve on our Board of Directors through each of those vesting dates. The RSUs granted to certain employees vest at a rate of 25% on each of the first four anniversaries of the grant date provided that the respective recipient continues to be employed by us through each of those vesting dates. We determine the fair value of restricted stock underlying the RSAs and RSUs based upon the closing price of our Class A common stock on the date of grant.

Share-based compensation expense associated with stock options and restricted stock is recognized on a straight-line basis over the requisite service period. The following table summarizes share-based compensation expense recorded in the Consolidated Statements of Operations (in thousands):

At May 2, 2026, there was $4.8 million of total unrecognized share-based compensation expense related to unvested stock options and restricted stock. This cost has a weighted average remaining recognition period of 2.8 years.