Quarterly report pursuant to sections 13 or 15(d)

Share-Based Compensation Plans

v2.4.0.8
Share-Based Compensation Plans
3 Months Ended
May 03, 2014
Share-Based Compensation Plans  
Share-Based Compensation Plans

8.  Share-Based Compensation Plans

 

For a discussion of our share-based compensation plans refer to Note 10 in our Annual Report on Form 10-K for the fiscal year ended February 1, 2014.

 

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 quarters ended May 3, 2014 and May 4, 2013 was $4.0 million and $4.5 million, respectively.

 

Non-Vested Deferred Stock Units and Restricted Stock Shares

 

The following table summarizes the activity of time-based and performance-based deferred stock units (“DSUs”) for the quarter ended May 3, 2014:

 

 

 

Shares

 

Weighted-Average
Grant-Date
 Fair Value

 

 

 

Time-
Based

 

Performance-
Based

 

Time-
Based

 

Performance-
Based

 

Non-Vested at February 1, 2014

 

573,042

 

82,558

 

$

32.95

 

$

33.09

 

Granted

 

217,385

 

18,789

 

47.26

 

47.26

 

Vested (1) 

 

(360,899

)

(1,134

)

33.19

 

33.09

 

Forfeited

 

(18,069

)

 

34.99

 

 

Non-Vested at May 3, 2014

 

411,459

 

100,213

 

$

40.21

 

$

35.75

 

 

(1)             Includes 119,468 shares relinquished for tax payments related to vested DSUs for the quarter ended May 3, 2014.

 

On April 3, 2013, our Board approved a change in the form of award agreements to be issued for grants of 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 from one to 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 May 3, 2014 are 89,471 DSUs granted prior to April 3, 2013.

 

Performance-based DSUs granted in 2014 (“2014 performance-based DSUs”) represent a contingent right to receive one share of common stock and vest over a one year period, subject to our achievement of a performance target for 2014.  Any 2014 performance-based DSUs that are unvested at the end of the one year period will lapse and be forfeited as of such time.  The 2014 performance-based DSUs 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 2013 (“2013 performance-based DSUs”) represent a contingent right to receive one share of common stock and generally vest in one-third tranches over a three year period, subject to our achievement of a performance target during an applicable performance period.  Any unvested 2013 performance-based DSUs at the end of the performance period are rolled over and become eligible to vest in subsequent performance periods.  Any 2013 performance-based DSUs that are unvested at the end of all vesting periods will lapse and be forfeited as of such time.  The 2013 performance-based DSUs earn dividends throughout the vesting period and are subject to the same vesting terms as the underlying performance-based awards.

 

The following table summarizes the activity of restricted stock for the quarter ended May 3, 2014:

 

 

 

Shares

 

Weighted-
Average
Grant-Date
Fair Value

 

Non-Vested at February 1, 2014

 

80,919

 

$

31.36

 

Granted

 

4,184

 

47.81

 

Vested

 

(23,788

)

28.91

 

Forfeited

 

 

 

Non-Vested at May 3, 2014

 

61,315

 

$

33.44

 

 

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

 

As of May 3, 2014, we have unrecognized compensation expense related to non-vested DSUs and shares of restricted stock of approximately $16.4 million, which is expected to be recognized over a weighted-average period of 1.3 years.

 

Stock Options

 

The following table summarizes the activity of stock options for the quarter ended May 3, 2014:

 

 

 

Shares

 

Weighted-
Average
Exercise
Price

 

Outstanding at February 1, 2014

 

645,990

 

$

28.80

 

Granted

 

110,576

 

47.26

 

Exercised

 

(137,468

)

25.51

 

Forfeited

 

(60,000

)

17.18

 

Outstanding at May 3, 2014

 

559,098

 

$

34.51

 

Exercisable at May 3, 2014

 

284,734

 

$

31.32

 

 

The weighted-average grant date fair value of the 110,576 stock options granted during the quarter ended May 3, 2014 was $16.41 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 quarter ended May 3, 2014.

 

 

 

For the Quarter
Ended

 

 

 

May 3,
2014

 

 

 

 

 

Risk-free interest rate

 

1.75%

 

Expected lives

 

5.0 years

 

Dividend yield

 

1.80%

 

Expected volatility

 

44.43%

 

 

As of May 3, 2014, we have unrecognized compensation expense related to non-vested stock options of approximately $3.5 million which is expected to be recognized over a weighted-average period of 2.0 years.

 

Employee Stock Discount Plan

 

The Employee Stock Discount Plan (“ESDP”) allows employees to authorize after-tax payroll deductions to be used for the purchase of up to 2,137,500 shares of our common stock at 85% of the lesser of the fair market value on the first day of the offering period or the fair market value on the last day of the offering period.  During the quarter ended May 3, 2014, employees purchased 20,505 shares under the ESDP, which had a weighted-average share price of $42.23 per share.  As of May 3, 2014, 719,833 shares were reserved for future issuance under the ESDP.