Quarterly report pursuant to Section 13 or 15(d)

Share-Based Compensation Plans

v3.2.0.727
Share-Based Compensation Plans
6 Months Ended
Aug. 01, 2015
Share-Based Compensation Plans  
Share-Based Compensation Plans

 

10.  Share-Based Compensation Plans

 

For a discussion of our share-based compensation plans refer to Note 11 in our Annual Report on Form 10-K for the fiscal year ended January 31, 2015.

 

We account for share-based awards in accordance with the authoritative guidance regarding share-based payments, which requires the compensation cost resulting from all share-based payment transactions be recognized in the financial statements. The amount of compensation cost is measured based on the grant-date fair value of the instrument issued and is recognized over the vesting period.  Share-based compensation expense recognized for the three and six months ended August 1, 2015 was $3.9 million and $8.4 million, respectively.  Share-based compensation expense recognized for the three and six months ended August 2, 2014 was $4.0 million and $8.0 million, respectively.

 

Non-Vested Deferred Stock Units, Performance Units and Restricted Stock Shares

 

The following table summarizes the activity of time-based and performance-based awards for the six months ended August 1, 2015:

 

 

 

Units

 

Weighted-Average
Grant-Date Fair Value

 

 

 

Time-
Based

 

Performance-
Based

 

Time-
Based

 

Performance-
Based

 

Non-Vested at January 31, 2015

 

378,518

 

170,789

 

$

42.67

 

$

43.94

 

Granted

 

357,260

 

36,844

 

52.63

 

57.32

 

Vested (1)

 

(228,837

)

(18,977

)

43.81

 

46.41

 

Forfeited

 

(13,354

)

(20,000

)

38.15

 

33.09

 

Non-Vested at August 1, 2015

 

493,587

 

168,656

 

$

49.48

 

$

47.87

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Includes 85,247 shares relinquished for tax payments related to vested deferred stock units for the six months ended August 1, 2015.

 

On April 3, 2013, our Board of Directors approved a change in the form of award agreements to be issued for grants of deferred stock units (“DSUs”) to participants under our 2004 Long-Term Incentive Plan.  As revised, the award agreements provide that dividend equivalents, if any, will be accrued during the vesting period for such DSU awards and paid out only upon vesting of the underlying DSUs.  As such, grants of DSU awards on or after April 3, 2013 earn dividends throughout the vesting period which are subject to the same vesting terms as the underlying share award.  Grants of DSUs generally vest over a period of three years.  DSU awards granted prior to April 3, 2013 are entitled to receive non-forfeitable dividend equivalents, if any, when and if paid to shareholders of record at the payment date.  Included in the non-vested time-based awards as of August 1, 2015 are 17,576 DSUs granted prior to April 3, 2013.

 

Of the 36,844 performance units granted in the first six months of 2015, 22,645 units represent a contingent right to receive one share of common stock and vest after our 2017 fiscal year, subject to our achievement of a cumulative performance target for fiscal years 2015-2017.

 

The remaining 14,199 performance units granted in the first six months of 2015 represent a contingent right to receive up to 2.25 shares of common stock and vest after our 2017 fiscal year, subject to our achievement of a performance target for fiscal 2017.  Assuming the performance target is achieved, the number of performance units earned will be adjusted based on multipliers related to (1) the Company’s adjusted earnings per share for fiscal 2017 and (2) the Company’s relative total shareholder return (“TSR”) compared to the TSR of certain peer companies over a pre-defined period.

 

Performance units that are unvested at the end of the performance period will lapse and be forfeited.  The performance units earn dividends throughout the vesting period and are subject to the same vesting terms as the underlying performance-based awards.

 

Performance-based DSUs granted in April 2014 (“April 2014 performance-based DSUs”) represented a contingent right to receive one share of common stock and vested over a one year period, subject to our achievement of a performance target for 2014.  Having met the performance target for 2014, the April 2014 performance-based DSUs vested in accordance with their terms in April 2015.

 

The following table summarizes the activity of restricted stock for the six months ended August 1, 2015:

 

 

 

Shares

 

Weighted-
Average
Grant-Date
Fair Value

 

Non-Vested at January 31, 2015

 

67,790

 

$

37.05

 

Granted

 

6,951

 

58.44

 

Vested

 

(25,414

)

32.95

 

Forfeited

 

(19,360

)

27.77

 

 

 

 

 

 

 

Non-Vested at August 1, 2015

 

29,967

 

$

51.49

 

 

 

 

 

 

 

 

 

Restricted stock awards receive non-forfeitable dividends, if any, when and if paid to shareholders of record at the payment date.

 

As of August 1, 2015, we have unrecognized compensation expense related to non-vested DSUs, performance units, and shares of restricted stock of approximately $25.4 million, which is expected to be recognized over a weighted-average period of 1.8 years.

 

Stock Options

 

The following table summarizes the activity of stock options for the six months ended August 1, 2015:

 

 

 

Shares

 

Weighted-
Average
Exercise
Price

 

Outstanding at January 31, 2015

 

660,283

 

$

38.28

 

Granted

 

41,951

 

57.91

 

Exercised

 

(19,617

)

33.02

 

Forfeited

 

 

 

Expired

 

 

 

 

 

 

 

 

 

Outstanding at August 1, 2015

 

682,617

 

$

39.64

 

 

 

 

 

 

 

 

Exercisable at August 1, 2015

 

301,070

 

$

31.83

 

 

 

 

 

 

 

 

 

The weighted-average grant date fair value of the 41,951 stock options granted during the six months ended August 1, 2015 was $18.63 per share.  The following table summarizes the weighted-average assumptions used to fair value stock options at the date of grant using the Black-Scholes option pricing model for the six months ended August 1, 2015:

 

 

 

For the Six
Months Ended

 

 

 

August 1,
2015

 

Risk-free interest rate

 

1.51% 

 

Expected lives

 

5.0 years

 

Dividend yield

 

1.38% 

 

Expected volatility

 

39.74% 

 

 

As of August 1, 2015, we have unrecognized compensation expense related to non-vested stock options of approximately $4.3 million, which is expected to be recognized over a weighted-average period of 1.6 years.