STOCK-BASED COMPENSATION

6 Months Ended

Aug. 03, 2014

NOTE B. 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 (including those that are performance based), deferred stock awards (collectively, “stock awards”) and dividend equivalents up to an aggregate of 25,760,000 shares. As of August 3, 2014, there were approximately 4,437,000 shares available for future grant. Awards may be granted under the Plan to officers, employees and non-employee members of the board of directors of the company (the “Board”) 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 for service-based awards, and three years for certain performance-based awards. 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 are 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 the thirteen and twenty-six weeks ended August 3, 2014, we recognized total stock-based compensation expense, as a component of selling, general and administrative expenses, of $9,823,000 and $22,191,000, respectively. During the thirteen and twenty-six weeks ended August 4, 2013, we recognized total stock-based compensation expense of $9,481,000 and $18,472,000, respectively.

Stock Options

The following table summarizes our stock option activity during the twenty-six weeks ended August 3, 2014:


	Shares
Balance at February 2, 2014		222,488
Granted		0
Exercised		(100,988	)
Cancelled		0
Balance at August 3, 2014 (100% vested)		121,500

Stock-Settled Stock Appreciation Rights

The following table summarizes our stock-settled stock appreciation right activity during the twenty-six weeks ended August 3, 2014:


	Shares
Balance at February 2, 2014		1,859,762
Granted		0
Converted into common stock		(504,087	)
Cancelled		(17,566	)
Balance at August 3, 2014		1,338,109
Vested at August 3, 2014		1,041,455
Vested plus expected to vest at August 3, 2014		1,217,066

Restricted Stock Units

The following table summarizes our restricted stock unit activity during the twenty-six weeks ended August 3, 2014:


	Shares
Balance at February 2, 2014		3,079,651
Granted		872,177
Released		(1,414,406	)
Cancelled		(123,562	)
Balance at August 3, 2014		2,413,860
Vested plus expected to vest at August 3, 2014		1,570,053

- 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.

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