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Share-Based Compensation Plans | 12 Months Ended
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Feb. 29, 2024
Share-Based Payment Arrangement [Abstract] |
Share-Based Compensation Plans | Note 8 - Share-Based Compensation Plans During the fiscal year, we had equity activity under one expired and two active share-based compensation plans. The expired plan consists of the 2008 Stock Incentive Plan (the “2008 Plan”). The active plans consist of the 2018 Stock Incentive Plan (the “2018 Plan”) and the 2018 Employee Stock Purchase Plan (the “2018 ESPP”). The plans are administered by the Compensation Committee of the Board of Directors, which consists of non-employee directors who are independent under the applicable listing standards for companies traded on the NASDAQ Stock Market LLC. 2018 Plan On August 22, 2018, our shareholders approved the 2018 Plan. The 2018 Plan permits the granting of stock options, stock appreciation rights, RSAs, RSUs, PSAs, PSUs, and other stock-based awards. The aggregate number of shares for issuance under the 2018 Plan will not exceed 2,000,000 shares and as of February 29, 2024, 697,829 shares were available for issuance. 2018 ESPP On August 22, 2018, our shareholders approved the 2018 ESPP. The aggregate number of shares of common stock that may be purchased under the 2018 ESPP will not exceed 750,000 shares. Under the terms of the plan, associates may authorize the withholding of up to 15% of their wages or salaries to purchase our shares of common stock, not to exceed $25,000 of the fair market value of such shares for any calendar year. The purchase price for shares acquired under the 2018 ESPP is equal to the lower of 85% of the share's fair market value on either the first day of each option period or the last day of each period. The plan will expire by its terms on September 1, 2028. Shares of common stock purchased under the 2018 ESPP vest immediately at the time of purchase. During fiscal 2024, there were 41,749 shares purchased under the plan. Share-Based Compensation Expense We recorded share-based compensation expense in SG&A as follows:
| Fiscal Years Ended Last Day of February,
(in thousands) | 2024 |  | 2023 |  | 2022
Directors stock compensation | $ | 787 |  |  | $ | 788 |  |  | $ | 644 |
Service Condition Awards | 12,345 |  |  | 8,663 |  |  | 11,177 |
Performance Condition Awards | 5,746 |  |  | 9,017 |  |  | 17,260 |
Market Condition Awards | 13,790 |  |  | 7,223 |  |  | 4,234 |
Employee stock purchase plan | 1,204 |  |  | 1,062 |  |  | 1,303 |
Share-based compensation expense | 33,872 |  |  | 26,753 |  |  | 34,618 |
Less: income tax benefits | (2,110) |  |  | (1,830) |  |  | (2,965) |
Share-based compensation expense, net of income tax benefits | $ | 31,762 |  |  | $ | 24,923 |  |  | $ | 31,653 |
Stock Options There have been no new grants of options since fiscal 2017 and all options outstanding at February 28, 2023 and February 29, 2024 were exercisable. A summary of stock option activity under our 2008 plan was as follows:
(in thousands, except contractual term and per share data) | Options |  | Weighted Average Exercise Price (per share) |  |  |  | Weighted Average Remaining Contractual Term (in years) |  | Intrinsic Value
Outstanding at February 28, 2023 | 16 |  |  | $ | 61.77 |  |  |  |  | 1.1 |  | $ | 726 |
Exercises | (6) |  |  | 46.00 |  |  |  |  |  |  | 298 |
Outstanding at February 29, 2024 | 10 |  |  | $ | 72.46 |  |  |  |  | 0.5 |  | $ | 447 |
Exercisable at February 29, 2024 | 10 |  |  | $ | 72.46 |  |  |  |  | 0.5 |  | $ | 447 |
The total intrinsic value of options exercised during fiscal 2024, 2023, and 2022, was $0.3 million, $1.1 million, and $3.6 million, respectively. Director Restricted Stock Awards During fiscal 2024 we issued under the 2018 Plan, 7,256 RSAs to non-employee members of the Board of Directors with a total grant date fair value of $0.8 million or $108.40 per share. The RSAs vested immediately, and accordingly, were expensed immediately. The total fair value of RSAs granted to our non-employee members of the Board of Directors that vested immediately on grant dates in fiscal 2023 and 2022 was $0.8 million and $0.6 million, respectively. Service Condition Awards We grant RSAs and RSUs to associates, which primarily vest ratably over three or four years or have specified graded vesting terms over 3 years, “Service Condition Awards”. A summary of Service Condition Awards activity during fiscal 2024 follows:
(in thousands, except per share data) | Number of Service Condition Awards |  | Weighted Average Grant Date Fair Value (per share) |  |  |  |  |  |
Outstanding at February 28, 2023 | 111 |  |  | $ | 199.29 |  |  |  |  |  |  |
Granted | 147 |  |  | 109.97 |  |  |  |  |  |  |
Vested | (58) |  |  | 181.44 |  |  |  |  |  |  |
Forfeited | (20) |  |  | 147.14 |  |  |  |  |  |  |
Outstanding at February 29, 2024 | 180 |  |  | $ | 138.06 |  |  |  |  |  |  |
The total fair value of Service Condition Awards that vested in fiscal 2024, 2023, and 2022 was $6.2 million, $10.2 million, and $14.3 million, respectively. The weighted average grant date fair value of Service Condition Awards granted during fiscal 2024, 2023 and 2022 was $109.97, $195.90, and $218.35, respectively. Performance Condition Awards We grant Performance Condition Awards to certain officers and associates, which cliff vest after three years. The vesting of these awards is contingent upon meeting one or more defined operational performance metrics over a three year performance period. The quantity of shares ultimately awarded can range from 0% to 200% of “Target”, as defined in the award agreement as 100%, based on the level of achievement against the defined operational performance metrics. A summary of Performance Condition Awards activity during fiscal 2024 follows and reflects all PSAs granted and outstanding at maximum achievement of 200% of Target:
(in thousands, except per share data) | Number of Performance Condition Awards |  | Weighted Average Grant Date Fair Value (per share) |  |  |  |  |
Outstanding at February 28, 2023 | 294 |  |  | $ | 189.21 |  |  |  |  |  |
Granted | 135 |  |  | 110.83 |  |  |  |  |  |
Vested | (77) |  |  | 170.27 |  |  |  |  |  |
Forfeited (1) | (93) |  |  | 168.81 |  |  |  |  |  |
Outstanding at February 29, 2024 | 259 |  |  | $ | 161.23 |  |  |  |  |  |
(1)Includes an additional 74 thousand shares, which resulted from the performance of the fiscal 2021 awards not achieving maximum 200% of Target. The total fair value of Performance Condition Awards that vested in fiscal 2024, 2023, and 2022 was $7.5 million, $37.8 million, and $29.9 million, respectively. The weighted average grant date fair value of Performance Condition Awards granted during fiscal 2024, 2023 and 2022 was $110.83, $204.20 and $216.20, respectively. Market Condition Awards We grant Market Condition Awards to certain officers and associates, which cliff vest after three years. The vesting of these awards is contingent upon meeting specified stock price return targets compared to a predetermined peer group over a three year period. The quantity of shares ultimately awarded can range from 0% to 200% of “Target”, as defined in the award agreement as 100%, based on the level of achievement against the defined targets. A summary of Market Condition Awards activity during fiscal 2024 follows and reflects all PSAs granted and outstanding at maximum achievement of 200% of Target:
(in thousands, except per share data) | Number of Market Condition Awards |  | Weighted Average Grant Date Fair Value (per share) |  |  |  |  |
Outstanding at February 28, 2023 | 142 |  |  | $ | 154.32 |  |  |  |  |  |
Granted | 135 |  |  | 80.49 |  |  |  |  |  |
Vested | — |  |  | — |  |  |  |  |  |
Forfeited | (18) |  |  | 118.43 |  |  |  |  |  |
Outstanding at February 29, 2024 | 259 |  |  | $ | 118.09 |  |  |  |  |  |
The weighted average grant date fair value of Market Condition Awards granted during fiscal 2024, 2023 and 2022 was $80.49, $152.91 and $156.08, respectively. The fair value of our Market Condition Awards are estimated using a Monte Carlo simulation valuation model. The Monte Carlo simulation model utilizes multiple input variables to estimate the probability that market conditions will be achieved and is applied to the closing price of our common stock on the date of grant. The input variables utilized are included in the table below:
| Fiscal Years Ended Last Day of February,
| 2024 |  | 2023 |  | 2022
Expected term in years | 3 |  | 3 |  | 3
Risk free interest rate | 4.6 | % |  | 1.5 | % |  | 0.3 | %
Expected volatility | 46.0 | % |  | 38.8 | % |  | 38.9 | %
Expected dividend yield (1) | — | % |  | — | % |  | — | %
(1)The Monte Carlo method assumes a reinvestment of dividends. The expected term is consistent with the explicit service period and the risk free interest rate is based on U.S. Treasury securities with maturities equal to the expected term of the awards. Expected volatility is based equally on the historical volatility of our stock prices over the expected term of the awards and at-the-money call options traded on or near the grant date of the awards. Unrecognized Share-Based Compensation Expense As of February 29, 2024, our total unrecognized share-based compensation for all awards was $17.1 million, which will be recognized over a weighted average amortization period of 2.0 years. The total unrecognized share-based compensation reflects an estimate of Target achievement for Performance Condition Awards granted during fiscal 2024 and an estimate of zero percent of Target achievement for Performance Condition Awards granted during fiscal 2023 and fiscal 2022.

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