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Share-Based Compensation | 9 Months Ended
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Nov. 03, 2018
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] |
Share-Based Compensation | 9. Share-Based Compensation The Company accounts for share-based compensation under the provisions of ASC 718, Compensation - Stock Compensation (“ASC 718”), which requires companies to measure and recognize compensation expense for all share-based payments at fair value. The Company adopted ASU 2016-09, Compensation—Stock Compensation (“ASU 2016-09”) prospectively at the beginning of Fiscal 2017 and now records excess tax benefits and deficiencies as a discrete adjustment to income tax expense when stock awards vest or are exercised, rather than in contributed capital where they have been historically recorded. ASU 2016-09 also requires cash flows related to excess tax benefits from share-based compensation to be presented in operating activities, rather than separately as a financing activity, in the Consolidated Statement of Cash Flows. Total share-based compensation expense included in the Consolidated Statements of Operations and Retained Earnings for the 13 weeks and 39 weeks ended November 3, 2018 was $6.2 million ($4.7 million, net of tax) and $17.8 million ($13.7 million, net of tax), respectively, and for the 13 weeks and 39 weeks ended October 28, 2017 was $2.3 million ($1.5 million, net of tax) and $12.1 million ($7.9 million, net of tax), respectively. Stock Option Grants The Company grants both time-based and performance-based stock options. A summary of the Company’s stock option activity for the 13 weeks ended November 3, 2018 follows:
|  |  |  |  |  | Weighted- Average |  |  | Weighted- Average Remaining Contractual |  |  | Aggregate |
|  | Options |  |  | Exercise Price |  |  | Term |  |  | Intrinsic Value |
|  | (In thousands) |  |  |  |  |  |  | (In years) |  |  | (In thousands) |
Outstanding - February 3, 2018 |  |  | 2,190 |  |  | $ | 14.59 |  |  |  |  |  |  |  |  |
Granted |  |  | 715 |  |  | $ | 19.60 |  |  |  |  |  |  |  |  |
Exercised (1) |  |  | (993 | ) |  | $ | 15.60 |  |  |  |  |  |  |  |  |
Cancelled |  |  | — |  |  | $ | — |  |  |  |  |  |  |  |  |
Outstanding - November 3, 2018 |  |  | 1,912 |  |  | $ | 16.75 |  |  |  | 5.5 |  |  | $ | 10,507 |
Vested and expected to vest - November 3, 2018 |  |  | 1,777 |  |  | $ | 16.69 |  |  |  | 5.5 |  |  | $ | 9,872 |
Exercisable - November 3, 2018 (2) |  |  | 171 |  |  | $ | 14.92 |  |  |  | 5.1 |  |  | $ | 1,256 |
(1) | Options exercised during the 39 weeks ended November 3, 2018 had exercise prices ranging from $13.70 to $19.89.
(2) | Options exercisable represent “in-the-money” vested options based upon the weighted-average exercise price of vested options compared to the Company’s stock price on November 3, 2018.
Cash received from the exercise of stock options was $15.5 million for the 39 weeks ended November 3, 2018 and $0.2 million for the 39 weeks ended October 28, 2017. The actual tax benefit realized from stock option exercises totaled $0.9 million for the 39 weeks ended November 3, 2018 and $0.7 million for the 39 weeks ended October 28, 2017. As of November 3, 2018, there was $5.7 million of unrecognized compensation expense for stock option awards that is expected to be recognized over a weighted average period of 1.9 years. The fair value of stock options was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions:
|  | 39 Weeks Ended |  | 39 Weeks Ended |
|  | November 3, |  | October 28, |
Black-Scholes Option Valuation Assumptions |  | 2018 |  | 2017 |
Risk-free interest rate (1) |  |  | 2.6 | % |  | 2.1 | %
Dividend yield |  |  | 2.5 | % |  | 3.1 | %
Volatility factor (2) |  |  | 39.5 | % |  | 38.5 | %
Weighted-average expected term (3) |  | 4.5 years |  | 4.5 years |
(1) | Based on the U.S. Treasury yield curve in effect at the time of grant with a term consistent with the expected life of our stock options.
(2) | Based on a combination of historical volatility of the Company’s common stock and implied volatility.
(3) | Represents the period of time options are expected to be outstanding. The weighted average expected option terms were determined based on historical experience.
Restricted Stock Grants Time-based restricted stock awards are comprised of time-based restricted stock units. These awards vest over three years. Time-based restricted stock units receive dividend equivalents in the form of additional time-based restricted stock units, which are subject to the same restrictions and forfeiture provisions as the original award. Performance-based restricted stock awards include performance-based restricted stock units. These awards cliff vest at the end of a three-year period based upon the achievement of pre-established goals throughout the term of the award. Performance-based restricted stock units receive dividend equivalents in the form of additional performance-based restricted stock units, which are subject to the same restrictions and forfeiture provisions as the original award. The grant date fair value of all restricted stock awards is based on the closing market price per share of the Company’s common stock or certain market conditions on the date of grant. A summary of the Company’s restricted stock activity is presented in the following tables:
|  | Time-Based Restricted Stock |  |  | Performance and Market-Based Restricted Stock |
|  | 39 Weeks Ended |  |  | 39 Weeks Ended |
|  | November 3, 2018 |  |  | November 3, 2018 |
(Shares in thousands) |  | Shares |  |  | Weighted-Average Grant Date Fair Value |  |  | Shares |  |  | Weighted-Average Grant Date Fair Value |
Nonvested - February 3, 2018 |  |  | 2,189 |  |  | $ | 13.27 |  |  |  | 2,138 |  |  | $ | 15.16 |
Granted |  |  | 930 |  |  | $ | 24.52 |  |  |  | 698 |  |  | $ | 21.74 |
Vested |  |  | (1,033 | ) |  | $ | 14.00 |  |  |  | (930 | ) |  | $ | 14.87 |
Cancelled |  |  | (104 | ) |  | $ | 13.65 |  |  |  | (18 | ) |  | $ | 15.42 |
Nonvested - November 3, 2018 |  |  | 1,982 |  |  | $ | 17.95 |  |  |  | 1,888 |  |  | $ | 17.44 |
As of November 3, 2018, there was $24.2 million of unrecognized compensation expense related to non-vested, time-based restricted stock unit awards that is expected to be recognized over a weighted-average period of 2.1 years. Based on current probable performance, there is $6.2 million of unrecognized compensation expense related to performance-based restricted stock unit awards which will be recognized as achievement of performance goals is probable over a one to three -year period. As of November 3, 2018, the Company had 6.9 million shares available for all equity grants.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -URI http://asc.fasb.org/subtopic&trid=2208855 + Details
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