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Share-Based Compensation | 12 Months Ended
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Jan. 28, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
Share-Based Compensation | Share-Based Compensation Share-Based Compensation Plans The Company has four share-based compensation plans. The Guess?, Inc. 2004 Equity Incentive Plan (the “Plan”) provides that the Board of Directors may grant stock options and other equity awards to officers, key employees and certain consultants and advisors to the Company or any of its subsidiaries. Effective May 20, 2014, the Plan was amended to extend the term for an additional ten years and reduce the authorized issuance of shares from 20,000,000 shares of common stock to 15,000,000 shares of common stock. The amendment also extended the ability for the Company to grant certain performance-based awards under the Plan through the beginning of calendar year 2019. All other remaining provisions under the Plan remained in full force and effect. As of January 28, 2017 and January 30, 2016, there were 4,092,241 and 4,967,390 shares available for grant under the Plan, respectively. Stock options granted under the Plan have ten-year terms and typically vest and become fully exercisable in increments of one-fourth of the shares granted on each anniversary from the date of grant. Stock awards/units granted under the Plan typically vest in increments of one-fourth of the shares granted on each anniversary from the date of grant. The three most recent annual grants for stock options and other equity awards had initial vesting periods of nine months followed by three annual vesting periods. The Guess?, Inc. Employee Stock Purchase Plan (“ESPP”) allows for qualified employees to participate in the purchase of designated shares of the Company’s common stock at a price equal to 85% of the lower of the closing price at the beginning or end of each quarterly stock purchase period. The Guess?, Inc. 2006 Non-Employee Directors’ Stock Grant and Stock Option Plan (the “Director Plan”) provides for the grant of equity awards to non-employee directors. Effective May 20, 2016, the Director Plan was amended to extend the term through June 30, 2026, reduce the authorized issuance of shares from 2,000,000 shares of common stock to 1,850,000 shares of common stock and allow more flexibility to structure compensation arrangements for the Company’s non-employee directors. All other remaining provisions under the Director Plan remained in full force and effect. As of January 28, 2017 and January 30, 2016, there were 582,639 and 768,425 shares available for grant under this plan, respectively. In addition, the Guess?, Inc. 1996 Equity Incentive Plan, under which equity grants have not been permitted since the approval of the Plan in 2004, continues to govern outstanding awards previously made thereunder. Performance Awards The Company has granted certain nonvested stock awards/units and stock options that require certain minimum performance targets to be achieved in order for these awards to vest. Vesting is also subject to continued service requirements through the vesting date. If the minimum performance targets are not forecasted to be achieved, no expense is recognized during the period. The Company has granted certain nonvested stock units subject to performance-based vesting conditions to select executive officers. Each award of nonvested stock units generally has an initial vesting period from the date of the grant through the end of the first fiscal year followed by annual vesting periods which may range from two-to-three years. The nonvested stock units are subject to the achievement of certain performance-based vesting conditions during the first fiscal year of the grant as well as continued service requirements through each of the vesting periods. The Company has also granted a target number of nonvested stock units to select key management, including certain executive officers. The number of shares that may ultimately vest with respect to each award may range from 0% up to 200% of the target number of shares, subject to the achievement of certain performance-based vesting conditions which may relate to the first fiscal year of the grant or the third fiscal year of the grant. Any shares that are ultimately issued are scheduled to vest at the end of the third fiscal year following the grant date. Market-Based Awards The Company has granted certain nonvested stock units which are subject to market-based performance targets in order for these units to vest. Vesting is also subject to continued service requirements through the vesting date. The grant date fair value for such nonvested stock units was estimated using a Monte Carlo simulation that incorporates option-pricing inputs covering the period from the grant date through the end of the performance period. Compensation expense for such nonvested stock units is recognized on a straight-line basis over the vesting period, regardless of whether the market condition is satisfied. The Company has granted certain nonvested stock units subject to market-based vesting conditions to select executive officers. The number of shares that may ultimately vest will equal 0% to 150% of the target number of shares, subject to the performance of the Company’s total stockholder return (“TSR”) relative to the TSR of a select group of peer companies over a three-year period. Contingently Returnable Restricted Stock Awards On July 7, 2015, the Company granted Victor Herrero, the Company’s Chief Executive Officer, 150,000 restricted stock units in addition to certain other stock options and nonvested stock units in connection with an employment agreement entered into between the Company and Mr. Herrero (the “Herrero Employment Agreement”). These restricted stock units vested immediately but were considered contingently returnable as a result of a one-year implied service condition set forth in the Herrero Employment Agreement. This service condition was met during the year ended January 28, 2017. Compensation expense for these restricted stock units was recognized on a straight-line basis over the implied service period. Share-Based Compensation Expense Compensation expense for nonvested stock options and stock awards/units is recognized on a straight-line basis over the vesting period. The Company estimates forfeitures in calculating the expense relating to share-based compensation as opposed to recognizing forfeitures as an expense reduction as they occur. The following table summarizes the share-based compensation expense recognized under all of the Company’s stock plans during fiscal 2017, fiscal 2016 and fiscal 2015 (in thousands):
| Year Ended |  | Year Ended |  | Year Ended
| Jan 28, 2017 |  | Jan 30, 2016 |  | Jan 31, 2015
Stock options | $ | 2,219 |  |  | $ | 2,113 |  |  | $ | 2,106 |
Stock awards/units | 14,544 |  |  | 16,604 |  |  | 12,999 |
ESPP | 145 |  |  | 163 |  |  | 237 |
Total share-based compensation expense | $ | 16,908 |  |  | $ | 18,880 |  |  | $ | 15,342 |
Stock options The following table summarizes the stock option activity under all of the Company’s stock plans during fiscal 2017:
| Number of Shares |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Term (Years) |  | Aggregate Intrinsic Value ($000’s)
Options outstanding at January 30, 2016 | 2,778,244 |  |  | $ | 26.02 |  |  |  |  |  |
Granted | 655,050 |  |  | 18.68 |  |  |  |  |  |
Exercised | (8,500 | ) |  | 18.20 |  |  |  |  |  |
Forfeited | (535,070 | ) |  | 26.24 |  |  |  |  |  |
Expired | (32,712 | ) |  | 28.09 |  |  |  |  |  |
Options outstanding at January 28, 2017 | 2,857,012 |  |  | $ | 24.30 |  |  | 6.85 |  | $ | — |
Exercisable at January 28, 2017 | 1,653,500 |  |  | $ | 27.58 |  |  | 5.58 |  | $ | — |
Options exercisable and expected to vest at January 28, 2017 | 2,691,818 |  |  | $ | 24.60 |  |  | 6.73 |  | $ | — |
The fair value of each stock option was estimated on the grant date using the Black-Scholes option-pricing model with the following weighted average assumptions used for grants during fiscal 2017, fiscal 2016 and fiscal 2015:
| Year Ended |  | Year Ended |  | Year Ended
Valuation Assumptions | Jan 28, 2017 |  | Jan 30, 2016 |  | Jan 31, 2015
Risk-free interest rate | 1.0 | % |  | 1.0 | % |  | 0.8 | %
Expected stock price volatility | 35.4 | % |  | 36.7 | % |  | 36.1 | %
Expected dividend yield | 4.8 | % |  | 4.7 | % |  | 3.3 | %
Expected life of stock options (in years) | 4.2 |  |  | 3.8 |  |  | 3.7 |
The risk-free interest rate is based on the U.S. Treasury yield curve in effect for the expected term of the option at the time of grant. The expected stock price volatility is determined based on an average of both historical volatility and implied volatility. Implied volatility is derived from exchange traded options on the Company’s common stock. The expected dividend yield is based on the Company’s history and expectations of dividend payouts. The expected life is determined based on historical trends. The expected forfeiture rate is determined based on historical data. The weighted average grant date fair value of options granted was $3.53, $3.75 and $5.99 during fiscal 2017, fiscal 2016 and fiscal 2015, respectively. The total intrinsic value of stock options exercised was minimal during fiscal 2017. During fiscal 2016 and fiscal 2015 the total intrinsic value of stock options exercised was $0.1 million and $0.9 million, respectively. The intrinsic value of stock options is defined as the difference between the Company’s stock price on the exercise date and the grant date exercise price. The total cash received from option exercises was $0.2 million, $0.3 million and $1.2 million during fiscal 2017, fiscal 2016 and fiscal 2015, respectively. The excess tax benefit realized for the tax deductions from option exercises included in cash flows from financing activities was minimal for fiscal 2017. The excess tax shortfall of $1.2 million was included in cash flows from operating activities for fiscal 2017. The compensation expense included in SG&A expense recognized was $2.2 million before the recognized income tax benefit of $0.8 million during fiscal 2017. As of January 28, 2017, there was approximately $3.6 million of unrecognized compensation cost, adjusted for estimated forfeitures, related to nonvested stock options. This cost is expected to be recognized over a weighted average period of 1.7 years. Stock awards/units The following table summarizes the nonvested stock awards/units activity under all of the Company’s stock plans during fiscal 2017:
| Number of Shares/Units |  | Weighted Average Grant Date Fair Value
Nonvested at January 30, 2016 | 1,382,133 |  |  | $ | 21.87 |
Granted | 1,148,298 |  |  | 18.01 |
Vested | (622,664 | ) |  | 23.55 |
Forfeited | (221,563 | ) |  | 20.59 |
Nonvested at January 28, 2017 | 1,686,204 |  |  | $ | 18.80 |
The following table summarizes the activity for nonvested performance-based units and nonvested market-based units included in the table above during fiscal 2017:
| Performance-Based Units |  | Market-Based Units
| Number of Units |  | Weighted Average Grant Date Fair Value |  | Number of Units |  | Weighted Average Grant Date Fair Value
Nonvested at January 30, 2016 | 580,000 |  |  | $ | 22.65 |  |  | 183,368 |  |  | $ | 17.72 |
Granted | 476,609 |  |  | 18.20 |  |  | 140,457 |  |  | 15.20 |
Vested | (241,922 | ) |  | 25.98 |  |  | — |  |  | — |
Forfeited | (26,838 | ) |  | 15.77 |  |  | — |  |  | — |
Nonvested at January 28, 2017 | 787,849 |  |  | $ | 19.17 |  |  | 323,825 |  |  | $ | 16.63 |
The fair value of each market-based nonvested stock unit was estimated on the grant date using the Monte Carlo simulation with the following assumptions used for the grants during fiscal 2017 and fiscal 2016:
| Year Ended |  | Year Ended
Valuation Assumptions | Jan 28, 2017 |  | Jan 30, 2016
Risk-free interest rate | 0.9 | % |  | 0.9 | %
Expected stock price volatility | 36.2 | % |  | 38.6 | %
Expected dividend yield | — | % |  | — | %
Expected life of market-based awards (in years) | 2.8 |  |  | 2.8 |
There were no grants of market-based nonvested stock units during fiscal 2015. The weighted average grant date fair value for the total nonvested stock awards/units granted was $18.01, $18.79 and $28.12 during fiscal 2017, fiscal 2016 and fiscal 2015, respectively. The total fair value at grant date of previously nonvested stock awards/units that were vested during fiscal 2017, fiscal 2016 and fiscal 2015 was $14.7 million, $14.0 million and $13.0 million, respectively. During fiscal 2017, fiscal 2016 and fiscal 2015, the total intrinsic value of nonvested stock awards/units that vested was $9.4 million, $11.0 million and $9.9 million, respectively. The excess tax benefit realized for the tax deductions from vested shares and dividends paid on unvested shares for fiscal 2017 was $0.3 million and has been included in cash flows from financing activities for fiscal 2017. The excess tax shortfall of $1.7 million was included in cash flows from operating activities for fiscal 2017. The total intrinsic value of nonvested stock awards/units outstanding and unvested as of January 28, 2017 was $16.8 million. The compensation expense included in SG&A expense recognized during fiscal 2017 was $14.5 million before the recognized income tax benefit of $5.3 million. As of January 28, 2017, there was approximately $20.9 million of total unrecognized compensation cost, adjusted for estimated forfeitures, related to nonvested stock awards/units. This cost is expected to be recognized over a weighted average period of 1.7 years. ESPP In January 2002, the Company established a n ESPP, the terms of which allow for qualified employees (as defined) to participate in the purchase of designated shares of the Company’s common stock at a price equal to 85% of the lower of the closing price at the beginning or end of each quarterly stock purchase period. Prior to March 4, 2009, the ESPP was a straight purchase plan with no holding period requirement. Effective March 4, 2009, the ESPP was amended to require participants to hold any shares purchased under the ESPP after April 1, 2009 for a minimum period of six months after purchase. In addition, all Company employees are subject to the terms of the Company’s securities trading policy which generally prohibits the purchase or sale of any Company securities during the two weeks before the end of each fiscal quarter through two days after the public announcement by the Company of its earnings for that period. On January 23, 2002, the Company filed with the SEC a Registration Statement on Form S-8 registering 4,000,000 shares of common stock for the ESPP. Effective March 12, 2012, the ESPP was amended and restated to extend the term for an additional ten years. During fiscal 2017, fiscal 2016 and fiscal 2015, 44,486 shares, 40,846 shares and 47,538 shares of the Company’s common stock were issued pursuant to the ESPP at an average price of $12.56, $16.17 and $21.20 per share, respectively. The fair value of stock compensation expense associated with the Company’s ESPP was estimated on the date of grant using the Black-Scholes option-pricing valuation model with the following weighted average assumptions used for grants during fiscal 2017, fiscal 2016 and fiscal 2015.
| Year Ended |  | Year Ended |  | Year Ended
Valuation Assumptions | Jan 28, 2017 |  | Jan 30, 2016 |  | Jan 31, 2015
Risk-free interest rate | 0.3 | % |  | 0.1 | % |  | 0.0 | %
Expected stock price volatility | 41.1 | % |  | 34.9 | % |  | 29.0 | %
Expected dividend yield | 6.2 | % |  | 4.7 | % |  | 3.7 | %
Expected life of ESPP options (in months) | 3 |  |  | 3 |  |  | 3 |
The weighted average grant date fair value of ESPP options granted during fiscal 2017, fiscal 2016 and fiscal 2015 was $3.32, $4.06 and $5.02, 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 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=65895303&loc=d3e17540-113929 Reference 2: 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=68057994&loc=d3e25284-112666 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB Topic 14) -URI http://asc.fasb.org/extlink&oid=27013229&loc=d3e301413-122809 Reference 4: 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 5: 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 6: 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 + Details
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