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Stock-Based Compensation | 12 Months Ended
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Feb. 02, 2014
Stock-Based Compensation | Note H: Stock-Based Compensation Equity Award Programs Our Amended and Restated 2001 Long-Term Incentive Plan (the “Plan”) provides for grants of incentive stock options, nonqualified stock options, stock-settled stock appreciation rights (collectively, “option awards”), restricted stock awards, restricted stock units, deferred stock awards (collectively, “stock awards”) and dividend equivalents up to an aggregate of 25,760,000 shares. As of February 2, 2014, there were approximately 6,164,000 shares available for future grant. Awards may be granted under the Plan to officers, employees and non-employee Board members of the company or any parent or subsidiary. Annual grants are limited to 1,000,000 shares covered by option awards and 400,000 shares covered by stock awards on a per person basis. All grants of option awards made under the Plan have a maximum term of seven years. The exercise price of these option awards is not less than 100% of the closing price of our stock on the day prior to the grant date. Option awards and stock awards granted to employees generally vest over a period of four years. Certain option awards, stock awards and other agreements contain vesting acceleration clauses resulting from events including, but not limited to, retirement, merger or a similar corporate event. Option and stock awards granted to non-employee Board members generally vest in one year. Non-employee Board members automatically receive stock awards on the date of their initial election to the Board and annually thereafter on the date of the annual meeting of stockholders (so long as they continue to serve as a non-employee Board member). Shares issued as a result of award exercises or releases will be primarily funded with the issuance of new shares. Stock-Based Compensation Expense We measure and record stock-based compensation expense for all employee stock-based awards using a fair value method. During fiscal 2013, fiscal 2012 and fiscal 2011, we recognized total stock-based compensation expense, as a component of selling, general and administrative expenses, of $38,788,000 (including stock-based compensation expense of $1,341,000 associated with the retirement of one of our former brand presidents), $31,042,000 (including stock-based compensation expense of $3,019,000 associated with the retirement of our former Executive Vice President, Chief Operating and Chief Financial Officer), and $24,336,000, respectively. As of February 2, 2014, there was $45,663,000 of unrecognized stock-based compensation expense (net of estimated forfeitures), which we expect to recognize on a straight-line basis over a weighted average remaining service period of approximately two years. At each reporting period, all compensation expense attributable to vested awards has been fully recognized. Stock Options The following table summarizes our stock option activity during fiscal 2013:
|  | Shares |  |  | Weighted Average Exercise Price |  |  | Weighted Average Contractual Term Remaining (Years) |  | Intrinsic Value 1 |
Balance at February 3, 2013 (100% vested) |  |  | 428,930 |  |  | $ | 35.07 |  |  |  |  |  |  |
Granted |  |  | 0 |  |  |  | 0 |  |  |  |  |  |  |
Exercised |  |  | (201,442 | ) |  |  | 32.83 |  |  |  |  |  |  |
Cancelled |  |  | (5,000 | ) |  |  | 34.94 |  |  |  |  |  |  |
Balance at February 2, 2014 (100% vested) |  |  | 222,488 |  |  | $ | 37.11 |  |  | 1.39 |  | $ | 3,874,000 |
1 | Intrinsic value for outstanding and vested options is based on the excess, if any, of the market value of our common stock on the last business day of the fiscal year (or $54.52) over the exercise price.
No stock options were granted in fiscal 2013, fiscal 2012 or fiscal 2011. The total intrinsic value of stock options exercised was $3,834,000 for fiscal 2013, $5,497,000 for fiscal 2012, and $7,343,000 for fiscal 2011. Intrinsic value for options exercised is based on the excess of the market value over the exercise price on the date of exercise. Stock-Settled Stock Appreciation Rights A stock-settled stock appreciation right is an award that allows the recipient to receive common stock equal to the appreciation in the fair market value of our common stock between the grant date and the conversion date for the number of shares converted. The following table summarizes our stock-settled stock appreciation right activity during fiscal 2013:
|  | Shares |  |  | Weighted Average Conversion Price 1 |  |  | Weighted Average Contractual Term Remaining (Years) |  | Intrinsic Value2 |
Balance at February 3, 2013 |  |  | 2,527,784 |  |  | $ | 28.21 |  |  |  |  |  |  |
Granted |  |  | 0 |  |  |  | 0 |  |  |  |  |  |  |
Converted into common stock |  |  | (613,199 | ) |  |  | 24.22 |  |  |  |  |  |  |
Cancelled |  |  | (54,823 | ) |  |  | 39.61 |  |  |  |  |  |  |
Balance at February 2, 2014 |  |  | 1,859,762 |  |  | $ | 29.19 |  |  | 4.37 |  | $ | 47,114,000 |
Vested at February 2, 2014 |  |  | 1,222,394 |  |  | $ | 23.91 |  |  | 4.37 |  | $ | 37,412,000 |
Vested plus expected to vest at February 2, 2014 |  |  | 1,639,947 |  |  | $ | 27.72 |  |  | 4.39 |  | $ | 43,958,000 |
1 | Conversion price is equal to the market value on the date of grant.
2 | Intrinsic value for outstanding and vested rights is based on the excess of the market value of our common stock on the last business day of the fiscal year (or $54.52) over the conversion price.
The following table summarizes additional information about stock-settled stock appreciation rights:
|  | Fiscal 2013 |  |  | Fiscal 2012 |  |  | Fiscal 2011 |
Weighted average grant date fair value per share of awards granted |  | $ | 0.00 |  |  | $ | 0.00 |  |  | $ | 14.27 |
Intrinsic value of awards converted into common stock 1 |  | $ | 18,046,000 |  |  | $ | 31,569,000 |  |  | $ | 18,969,000 |
1 | Intrinsic value for conversions is based on the excess of the market value over the conversion price on the date of the conversion.
The fair value of option awards is estimated on the date of the grant using the Black-Scholes option pricing model with the following weighted-average assumptions:
| • |  | Expected term – The expected term of the option awards represents the period of time between the grant date of the option awards and the date the option awards are either exercised, converted or cancelled, including an estimate for those option awards still outstanding.
| • |  | Expected volatility – The expected volatility is based on an average of the historical volatility of our stock price, for a period approximating our expected term, and the implied volatility of externally traded options of our stock during the period.
| • |  | Risk-free interest rate – The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant and with a maturity that approximates our expected term.
| • |  | Dividend yield – The dividend yield is based on our quarterly cash dividend and the anticipated dividend payout over our expected term.
No option awards were granted in fiscal 2013 and fiscal 2012. The weighted average assumptions used for fiscal 2011 are as follows:
|  | Fiscal 2011 |
Expected term (years) |  |  | 5.0 |
Expected volatility |  |  | 46.6% |
Risk-free interest rate |  |  | 2.2% |
Dividend yield |  |  | 2.3% |
Restricted Stock Units The following table summarizes our restricted stock unit activity during fiscal 2013:
|  | Shares |  |  | Weighted Average Grant Date Fair Value |  |  | Weighted Average Contractual Term Remaining (Years) |  | Intrinsic Value 1 |
Balance at February 3, 2013 |  |  | 2,772,426 |  |  | $ | 34.61 |  |  |  |  |  |  |
Granted |  |  | 959,160 |  |  |  | 53.59 |  |  |  |  |  |  |
Released |  |  | (460,700 | ) |  |  | 34.57 |  |  |  |  |  |  |
Cancelled |  |  | (191,235 | ) |  |  | 41.28 |  |  |  |  |  |  |
Balance at February 2, 2014 |  |  | 3,079,651 |  |  | $ | 40.11 |  |  | 1.93 |  | $ | 167,903,000 |
Vested plus expected to vest at February 2, 2014 |  |  | 2,105,508 |  |  | $ | 39.99 |  |  | 1.90 |  | $ | 114,792,000 |
1 | Intrinsic value for outstanding and unvested restricted stock units is based on the market value of our common stock on the last business day of the fiscal year (or $54.52).
The following table summarizes additional information about restricted stock units:
|  | Fiscal 2013 |  |  | Fiscal 2012 |  |  | Fiscal 2011 |
Weighted average grant date fair value per share of awards granted |  | $ | 53.59 |  |  | $ | 37.94 |  |  | $ | 39.27 |
Intrinsic value of awards released 1 |  | $ | 24,568,000 |  |  | $ | 16,730,000 |  |  | $ | 12,865,000 |
1 | Intrinsic value for releases is based on the market value on the date of release.
Tax Effect We present tax benefits resulting from the exercise of stock-based awards as operating cash flows in our Consolidated Statements of Cash Flows. Tax deductions in excess of the cumulative compensation cost recognized for stock-based awards exercised are presented as a financing cash inflow and an operating cash outflow. During fiscal 2013, fiscal 2012 and fiscal 2011, net proceeds from the exercise of stock-based awards was $6,614,000, $14,637,000 and $9,614,000, respectively, and the current tax benefit associated with such exercises totaled $17,940,000, $21,477,000 and $15,078,000, respectively.

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 + Details
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