Note G: 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 32,310,000 shares. As of January 29, 2017, there were approximately 7,371,000 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. Shares issued as a result of award exercises or releases are primarily funded with the issuance of new shares.

Option Awards

Annual grants of option awards are limited to 1,000,000 shares on a per person basis and 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 granted to employees generally vest evenly over a period of four years for service-based awards. Certain option awards contain vesting acceleration clauses resulting from events including, but not limited to, retirement, merger or a similar corporate event.

Stock Awards

Annual grants of stock awards are limited to 1,000,000 shares on a per person basis and have a maximum term of seven years. Stock awards granted to employees generally vest evenly over a period of four years for service-based awards. Certain performance-based awards, which have variable payout conditions based on predetermined financial targets, vest three years from the date of grant. Certain stock awards and other agreements contain vesting acceleration clauses resulting from events including, but not limited to, retirement, merger or a similar corporate event. 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).

Stock-Based Compensation Expense

During fiscal 2016, fiscal 2015 and fiscal 2014, we recognized total stock-based compensation expense, as a component of selling, general and administrative expenses, of $51,116,000, $41,357,000 and $44,632,000, respectively. As of January 29, 2017, there was $62,212,000 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

No stock options were granted in fiscal 2016, fiscal 2015 or fiscal 2014. Stock options exercised in fiscal 2016 were 38,500 at a weighted average exercise price of $39.80. The total intrinsic value of stock options exercised was $663,000 for fiscal 2016, $2,722,000 for fiscal 2015 and $3,564,000 for fiscal 2014. Intrinsic value for options exercised is based on the excess of the market value over the exercise price on the date of exercise. No stock options were outstanding as of January 29, 2017.

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 2016:


	Shares			Weighted Average Conversion Price¹		Weighted Average Contractual Term Remaining (Years)		Intrinsic Value²
Balance at January 31, 2016 (100% vested)		634,609		$	27.76
Granted		—			—
Converted into common stock		(222,899	)		30.99
Cancelled		—			—
Balance at January 29, 2017 (100% vested)		411,710		$	26.02		1.45	$	8,844,000

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 $47.50) over the conversion price.

No stock-settled stock appreciation rights were granted in fiscal 2016, fiscal 2015 or fiscal 2014. The total intrinsic value of awards converted to common stock was $5,237,000 for fiscal 2016, $24,465,000 for fiscal 2015 and $26,837,000 for fiscal 2014. Intrinsic value for conversions is based on the excess of the market value on the date of conversion over the conversion price.

Restricted Stock Units

The following table summarizes our restricted stock unit activity during fiscal 2016:


	Shares			Weighted Average Grant Date Fair Value		Weighted Average Contractual Term Remaining (Years)		Intrinsic Value¹
Balance at January 31, 2016		2,288,958		$	60.89
Granted		1,159,211			59.17
Released		(976,110	)		52.33
Cancelled		(239,573	)		60.70
Balance at January 29, 2017		2,232,486		$	63.75		3.11	$	106,043,000
Vested plus expected to vest at January 29, 2017		1,520,660		$	63.96		3.14	$	72,231,000

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 $47.50).

The following table summarizes additional information about restricted stock units:


	Fiscal 2016		Fiscal 2015		Fiscal 2014
Weighted average grant date fair value per share of awards granted	$	59.17	$	76.19	$	63.18
Intrinsic value of awards released¹	$	56,405,000	$	50,773,000	$	101,189,000

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 settlement 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 settled are presented as a financing cash inflow and an operating cash outflow. During fiscal 2016, fiscal 2015 and fiscal 2014, proceeds related to stock-based awards was $1,532,000, $2,647,000 and $4,077,000, respectively, and the current tax benefit related to stock-based awards totaled $24,129,000, $30,352,000 and $52,798,000, respectively.