The Company accounts for share-based compensation under the provisions of ASC 718, Compensation – Stock Compensation (“ASC 718”), which requires the Company to measure and recognize compensation expense for all share-based payments at fair value. Total share-based compensation expense included in the Consolidated Statements of Operations for Fiscal 2024, Fiscal 2023, and Fiscal 2022 was $39.6 million ($29.5 million, net of tax), $51.1 million ($36.2 million, net of tax), and $39.0 million ($27.3 million, net of tax), respectively.

There was $14.2 million of share-based payment expense, consisting of both time- and performance-based awards, included in gross profit this year. This is compared to $20.1 million of share-based payment expense included in gross profit for Fiscal 2023.

There was $25.4 million of share-based payment expense, consisting of time and performance-based awards, included in selling, general, and administrative expenses for Fiscal 2024. This is compared to $31.0 million of share-based payment expense included in selling, general, and administrative expenses for Fiscal 2023.

ASC 718 requires recognition of compensation cost under a non-substantive vesting period approach for awards containing provisions that accelerate or continue vesting upon retirement. Accordingly, for awards with such provisions, the Company

recognizes compensation expense over the period from the grant date to the date that retirement eligibility is achieved, if that is expected to occur during the nominal vesting period. Additionally, for awards granted to retirement-eligible employees, the full compensation cost of an award must be recognized immediately upon grant.

At February 1, 2025, the Company had awards outstanding under two share-based compensation plans, which are described below.

The 2023 Plan was approved by the Company's stockholders on June 7, 2023. The 2023 Plan authorized 10.6 million shares for issuance, in the form of options, stock appreciation rights (“SARS”), restricted stock, restricted stock units, bonus stock and awards, performance awards, dividend equivalents and other stock-based awards. The 2023 Plan allows the Compensation Committee of the Board of Directors to determine which employees receive awards and the terms and conditions of the awards under the 2023 Plan. The 2023 Plan provides for grants to non-employee directors, which are not to exceed in value of $750,000 in any single fiscal year. As of February 1, 2025, approximately 1.6 million shares of restricted stock and approximately 0.7 million shares of common stock had been granted under the 2023 Plan to employees and non-employee directors. Approximately 30% of the restricted stock awards are performance-based and are earned if the pre-established performance goals are met. The remaining 70% of the restricted stock awards are time-based, of which 95% vest ratably over three years and 5% vest over a period of one to two years.

2020 Stock Award and Incentive Plan (“2020 Plan” and, together with the 2023 Plan, the “Plans”)

The 2020 Plan was approved by the stockholders on April 13, 2020. The 2020 Plan authorized 10.2 million shares for issuance, in the form of options, SARS, restricted stock, restricted stock units, bonus stock and awards, performance awards, dividend equivalents and other stock-based awards. The 2020 Plan provides that for awards intended to qualify as “performance-based compensation” under Section 162(m) of the Internal Revenue Code of 1986, as amended, (i) the maximum number of shares awarded to any individual may not exceed 3.0 million shares per year for options and SARS and (ii) no more than 1.5 million shares may be granted with respect to each of restricted shares of stock and restricted stock units (subject to certain adjustments and exceptions provided therein). The 2020 Plan allows the Compensation Committee of the Board to determine which employees receive awards and the terms and conditions of the awards under the 2020 Plan. The 2020 Plan provides for grants to non-employee directors, which are not to exceed in value of $750,000 in any single fiscal year. Through February 3, 2024, approximately 7.2 million shares of restricted stock and approximately 3.4 million shares of common stock had been granted under the 2020 Plan to employees and directors. Approximately 40% of the restricted stock awards are performance-based and are earned if the established performance goals are met. The remaining 60% of the restricted stock awards are time-based, of which 97% vest ratably over three years and 3% vest over a period of one to two years. In connection with the adoption of the 2023 Plan, the 2020 Plan terminated on June 7, 2023 with all rights of the awardees and all unexpired awards continuing in force and operation after the termination.

The Company has granted time-based stock options under the Plans. Time-based stock option awards vest over the requisite service period of the award or to an employee’s eligible retirement date, if earlier.

A summary of the Company’s stock option activity for Fiscal 2024 follows:


	Fiscal Year Ending February 1, 2025
				Weighted- Average		Weighted- Average Remaining Contractual		Aggregate Intrinsic
	Options			Exercise Price		Term		Value
	(In thousands)					(In years)		(In thousands)
Outstanding - February 3, 2024		4,213		$	16.83
Granted		525		$	24.37
Exercised (1)		(414	)	$	14.35
Cancelled		—		$	—
Outstanding - February 1, 2025		4,324		$	17.98		3.3	$	7,777
Vested and expected to vest - February 1, 2025		4,202		$	17.86		3.2	$	7,603
Exercisable - February 1, 2025 (2)		1,135		$	11.12		3.0	$	5,696

The weighted-average grant date fair value of stock options granted during Fiscal 2024 and Fiscal 2023 was $10.61 and $5.31, respectively. The aggregate intrinsic value of options exercised during Fiscal 2024 and Fiscal 2023 was $3.5 million and $3.6 million, respectively. Cash received from the exercise of stock options and the actual tax benefit realized from share-based payments was $3.8 million and $2.1 million, respectively, for Fiscal 2024. Cash received from the exercise of stock options and the actual tax benefit realized from share-based payments was $7.6 million and ($0.5) million, respectively, for Fiscal 2023.

As of February 1, 2025, there was $0.7 million of unrecognized compensation expense related to non-vested 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:


	Fiscal Years Ending
	February 1,	February 3,
Black-Scholes Option Valuation Assumptions	2025	2024
Risk-free interest rate (1)	4.4%	3.4%
Dividend yield	1.9%	2.8%
Volatility factor (2)	55.4%	55.7%
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 the historical volatility of the Company’s common stock.

(3)

Represents the period that options are expected to be outstanding. The weighted average expected option terms were determined based on historical experience.

Time-based restricted stock awards are composed of time-based restricted stock units. These awards vest over one to 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 awards.

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 Company’s 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 awards.

The grant date fair value of time-based restricted stock awards is based on the closing market price of the Company’s common stock on the date of grant. A Monte Carlo simulation was utilized for performance-based restricted stock awards.

A summary of the activity of the Company’s restricted stock is presented in the following tables:


	Time-Based Restricted Stock Units					Performance- Based Restricted Stock Units
	Fiscal Year Ending					Fiscal Year Ending
	February 1, 2025					February 1, 2025
(Shares in thousands)	Shares			Weighted-Average Grant Date Fair Value		Shares			Weighted-Average Grant Date Fair Value
Non-vested - February 3, 2024		2,830		$	15.83		2,023		$	18.45
Granted		1,101			24.03		500			26.95
Vested		(1,214	)		17.53		(257	)		38.38
Cancelled		(357	)		17.32		(48	)		18.55
Non-vested - February 1, 2025		2,360		$	18.56		2,218		$	18.05

As of February 1, 2025, there was $25.1 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 1.9

years. There was $4.7 million of unrecognized compensation expense related to performance-based restricted stock unit awards that is expected to be recognized over a weighted average period of 1.7 years.

As of February 1, 2025, the Company had 11.0 million shares available for all equity grants.

During Fiscal 2024 and Fiscal 2023, the Company repurchased approximately 0.6 million and 0.8 million shares, respectively, from certain employees at market prices totaling $13.8 million and $10.7 million, respectively. These shares were repurchased for the payment of taxes in connection with the vesting of share-based payments, as permitted under our equity incentive plans.