Quarterly report pursuant to Section 13 or 15(d)

Share-Based Compensation Plans

v3.19.2
Share-Based Compensation Plans
3 Months Ended
May 04, 2019
Share-Based Compensation Plans  
Share-Based Compensation Plans

11.  Share-Based Compensation Plans

 

For a discussion of our share-based compensation plans, please see Note 14 in our Annual Report on Form 10-K for the fiscal year ended February 2, 2019.

 

 

Non-Vested Deferred Stock Units and Performance Units

 

The following table summarizes the activity of time-based and performance-based awards (collectively, "DSUs") for the three months ended May 4, 2019:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-Average

 

 

 

Units

 

Grant-Date Fair Value

 

 

 

Time-

 

Performance-

 

Time-

 

Performance-

 

 

    

Based

    

Based

    

Based

    

Based

 

Non-Vested at February 2, 2019

 

939,086

 

336,906

 

$

22.60

 

$

18.59

 

Granted

 

 —

 

 —

 

 

 —

 

 

 —

 

Vested(1)

 

(326,826)

 

(28,686)

 

 

22.43

 

 

17.43

 

Forfeited

 

(55,406)

 

(23,755)

 

 

22.88

 

 

18.94

 

Non-Vested at May 4, 2019

 

556,854

 

284,465

 

$

22.77

 

$

18.68

 


(1)

Includes 121,995 shares relinquished for tax payments related to vested DSUs for the three months ended May 4, 2019.

 

As of May 4, 2019, we have unrecognized compensation expense related to non-vested DSUs of $11.7 million, which is expected to be recognized over a weighted-average period of 1.4 years.

 

Stock Options and Stock Appreciation Rights (“SARs”)

 

The following table summarizes the activity of stock options for the three months ended May 4, 2019:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-

 

 

 

Number of

 

Average

 

 

    

Shares

    

Exercise Price

 

Outstanding at February 2, 2019

 

1,252,072

 

$

23.64

 

Granted

 

3,042,310

 

 

7.62

 

Exercised

 

 —

 

 

 —

 

Forfeited

 

(30,286)

 

 

17.47

 

Expired

 

(32,271)

 

 

33.79

 

Outstanding at May 4, 2019

 

4,231,825

 

$

12.09

 

Exercisable at May 4, 2019

 

818,982

 

$

26.46

 

 

During the first quarter of 2019, we granted SARs, which vest ratably over a period of three years, and will be settled in stock. Each vested SAR entitles the holder to the right of the difference between the value of our common stock on the date of exercise and the common stock price on the date of grant. We use the Black-Scholes option pricing model to estimate the fair value of SARs on the date of grant.

 

The following table summarizes the activity of SARs for the three months ended May 4, 2019:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-

 

 

 

Number of

 

Average

 

 

    

Shares

    

Exercise Price

 

Outstanding at February 2, 2019

 

 —

 

$

 —

 

Granted

 

414,476

 

 

7.62

 

Exercised

 

 —

 

 

 —

 

Forfeited

 

 —

 

 

 —

 

Expired

 

 —

 

 

 —

 

Outstanding at May 4, 2019

 

414,476

 

$

7.62

 

Exercisable at May 4, 2019

 

 —

 

$

 —

 

The weighted-average grant date fair value of the 3,042,310 stock options and 414,476 SARs granted during the three months ended May 4, 2019 was $3.01 per share. The following table summarizes the weighted-average assumptions used to fair value the stock options and SARs at the date of grant using the Black-Scholes option model for the three months ended May 4, 2019:

 

 

 

 

 

 

 

For the Three Months Ended

 

 

 

May 4,

 

 

    

2019

 

Risk-free interest rate

 

2.39%

 

Expected lives

 

5.0 years

 

Dividend yield

 

4.34%

 

Expected volatility

 

62.32%

 

 

As of May 4, 2019, we have unrecognized compensation expense related to non-vested stock options and SARs of $12.1 million, which is expected to be recognized over a weighted-average period of 1.9 years.

 

Cash Settled Awards

 

We have granted stock-based awards to certain employees, which vest over a period of three years, and will be settled in cash ("cash settled awards").  The fair value of the cash settled awards at each reporting period is based on the price of our common stock.  The fair value of the cash settled awards will be remeasured at each reporting period until the awards are settled.  Cash settled awards are classified as liabilities in the condensed consolidated balance sheets.  At May 4, 2019, the liability associated with the cash settled awards was $3.4 million with $2.1 million recorded in accrued expenses and other current liabilities and $1.3 million recorded in other liabilities in the condensed consolidated balance sheets.

 

The following table summarizes the activity of cash settled awards, based on their initial grant date values, for the three months ended May 4, 2019 (in thousands):

 

 

 

 

 

 

 

Cash Settled Awards

Non-Vested at February 2, 2019

 

$

5,072

Granted

 

 

4,237

Vested

 

 

 —

Forfeited

 

 

(199)

Non-Vested at May 4, 2019

 

$

9,110

 

As of May 4, 2019, we have unrecognized compensation expense related to non-vested cash settled awards of $4.7 million, which is expected to be recognized over a weighted-average period of 1.8 years.

 

Share-Based Compensation Expense

 

Share-based compensation expense, including cash settled awards, recognized for the three months ended May 4, 2019 and May 5, 2018, was $1.9 million and $6.5 million, respectively.