Quarterly report pursuant to Section 13 or 15(d)

Share-Based Compensation Plans

v3.8.0.1
Share-Based Compensation Plans
9 Months Ended
Oct. 28, 2017
Share-Based Compensation Plans  
Share-Based Compensation Plans

11.  Share-Based Compensation Plans

 

For a discussion of our share-based compensation plans, refer to Note 13 in our Annual Report on Form 10-K for the fiscal year ended January 28, 2017.

 

During the first quarter of fiscal 2017, we adopted ASU No. 2016-09, Compensation-Stock Compensation. ASU 2016-09 simplifies several aspects of the accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows.  The recognition of excess tax benefits and deficiencies related to the vesting of stock-based awards in the statement of earnings and presentation of excess tax benefits on the statement of cash flows were adopted prospectively, with no adjustments made to prior periods.  See Note 8 for additional information.  In addition, upon adoption, we did not change our policy on accounting for forfeitures, which is to estimate the number of awards expected to be forfeited and adjusting the estimate as needed.  Overall, the adoption of ASU 2016-09 did not have a material impact on our financial statements. 

 

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

 

The following table summarizes the activity of time-based and performance-based awards (collectively, "DSUs") for the nine months ended October 28, 2017:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-Average

 

 

 

Units

 

Grant-Date Fair Value

 

 

 

Time-

 

Performance-

 

Time-

 

Performance-

 

 

    

Based

    

Based

    

Based

    

Based

 

Non-Vested at January 28, 2017

 

1,061,965

 

523,948

 

$

24.31

 

$

28.28

 

Granted

 

472,708

 

542,528

 

 

11.48

 

 

11.45

 

Vested(1)

 

(455,925)

 

 —

 

 

25.38

 

 

 —

 

Forfeited

 

(51,271)

 

(41,942)

 

 

20.78

 

 

22.26

 

Non-Vested at October 28, 2017

 

1,027,477

 

1,024,534

 

$

18.10

 

$

19.61

 


(1)

Includes 125,806 shares relinquished for tax payments related to vested DSUs for the nine months ended October 28, 2017.

 

The following table summarizes the activity of restricted stock for the nine months ended October 28, 2017:

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-
Average

 

 

    

Shares

    

Grant-Date
Fair Value

 

Non-Vested at January 28, 2017

 

36,878

 

$

15.56

 

Granted

 

 —

 

 

 —

 

Vested

 

(36,878)

 

 

15.56

 

Forfeited

 

 —

 

 

 —

 

Non-Vested at October 28, 2017

 

 —

 

$

 —

 

 

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

 

As of October 28, 2017, we have unrecognized compensation expense related to non-vested DSUs of approximately $22.0 million, which is expected to be recognized over a weighted-average period of 1.6 years.

 

Stock Options

 

The following table summarizes the activity of stock options for the nine months ended October 28, 2017:

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-

 

 

 

Number of

 

Average

 

 

    

Shares

    

Exercise Price

 

Outstanding at January 28, 2017

 

1,194,690

 

$

29.70

 

Granted

 

630,083

 

 

11.54

 

Exercised

 

 —

 

 

 —

 

Forfeited

 

(50,856)

 

 

16.25

 

Expired

 

(40,243)

 

 

41.23

 

Outstanding at October 28, 2017

 

1,733,674

 

$

23.23

 

Exercisable at October 28, 2017

 

736,137

 

$

33.33

 

 

The weighted-average grant date fair value of the 630,083 stock options granted during the nine months ended October 28, 2017 was $3.86 per share. The following table summarizes the weighted-average assumptions used to fair value the stock options at the date of grant using the Black-Scholes option model for the nine months ended October 28, 2017:

 

 

 

 

 

 

 

For the Nine Months Ended

 

 

 

October 28,

 

 

    

2017

 

Risk-free interest rates

 

1.75%

 

Expected lives

 

5.0 years

 

Dividend yield

 

4.69%

 

Expected volatility

 

55.12%

 

 

As of October 28, 2017, we have unrecognized compensation expense related to non-vested stock options of approximately $3.7 million, which is expected to be recognized over a weighted-average period of 1.4 years.

 

Cash Settled Awards

 

During 2017, we 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 and includes a market condition.  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  October 28, 2017, the liability associated with the cash settled awards was $2.3 million with $1.4 million recorded in accrued expenses and other current liabilities and $0.9 million recorded in other liabilities in the condensed consolidated balance sheets.

 

The following table summarizes the activity of cash settled awards for the nine months ended October 28, 2017 (in thousands):

 

 

 

 

 

 

 

Cash Settled Awards

Non-Vested at January 28, 2017

 

$

 —

Granted

 

 

8,377

Vested

 

 

 —

Forfeited

 

 

(149)

Non-Vested at October 28, 2017

 

$

8,228

 

Share-Based Compensation Expense

 

Share-based compensation expense, including cash settled awards, recognized for the three and nine months ended October 28, 2017 was $8.2 million and $17.2 million, respectively. Share-based compensation expense recognized for the three and nine months ended October 29, 2016 was $5.2 million and $14.0 million, respectively.  There were no cash settled awards granted during 2016.