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Stock-Based Compensation
 3 Months Ended
Apr. 30, 2016
Share-based Compensation [Abstract]  
Stock Based Compensation

Note 5 - Stock-Based Compensation

 

Stock-based compensation includes stock options, cash-settled stock appreciation rights (SARs) and restricted stock awards. Additionally, we recognize stock-based compensation expense for the discount on shares sold to employees through our employee stock purchase plan. Stock-based compensation expense for the employee stock purchase plan was $13,000 before the income tax benefit of $5,000 and $10,000 before the income tax benefit of $4,000 for the thirteen weeks ended April 30, 2016 and May 2, 2015, respectively.

 

The following section summarizes the share transactions for our restricted stock awards:

 

   Number of
Shares		  Weighted- Average
Grant Date Fair Value
 Restricted stock at January 30, 2016    829,492   $22.13 
 Granted    212,043    24.94 
 Vested    (29,797)   26.07 
 Restricted stock at April 30, 2016    1,011,738   $22.60 

 

The weighted-average grant date fair value of stock awards granted during the thirteen-week periods ended April 30, 2016 and May 2, 2015 was $24.94 and $24.30, respectively. The total fair value at grant date of previously non-vested stock awards that vested during the first quarter of fiscal 2016 was $777,000. The total fair value at grant date of previously non-vested stock awards that vested during the first quarter of fiscal 2015 was $28,000.

 

The following section summarizes information regarding stock-based compensation expense recognized for restricted stock awards:

 

(In thousands)  Thirteen Weeks
Ended April 30, 
2016		  Thirteen Weeks
Ended May 2,
2015
Stock-based compensation expense before the recognized income tax benefit  $489   $818 
Income tax benefit  $187   $318 
           

As of April 30, 2016, approximately $11.3 million of unrecognized compensation expense remained related to both our performance-based and service-based restricted stock awards. The cost is expected to be recognized over a weighted average period of approximately 2.4 years. This incorporates our current assumptions with respect to the estimated requisite service period required to achieve the designated performance conditions for performance-based stock awards.

 

The following table summarizes the SARs activity:

 

   Number of
Shares		  Weighted- Average
Exercise Price		  Weighted- Average
Remaining Contractual
Term (Years)
 Outstanding at January 30, 2016    147,550   $24.26      
  Forfeited    (4,375)   24.26      
  Exercised    (2,750)   24.26      
 Outstanding at April 30, 2016    140,425   $24.26    3.9 
                  
 Exercisable at April 30, 2016    45,557   $24.26    3.9 

 

SARs were granted during the first quarter of fiscal 2015 to certain non-executive employees, such that one-third of the shares underlying the SARs will vest and become fully exercisable on each of the first three anniversaries of the date of the grant and were assigned a five-year term from the date of grant, after which any unexercised SARs will expire. Each SAR entitles the holder, upon exercise of their vested shares, to receive cash in an amount equal to the closing price of our stock on the date of exercise less the exercise price, with a maximum amount of gain defined. The SARs granted during the first quarter of fiscal 2015 were issued with a defined maximum gain of $10.00 over the exercise price of $24.26.

 

The fair value of these liability awards are remeasured, using a trinomial lattice model, at each reporting period until the date of settlement. Increases or decreases in stock-based compensation expense are recognized over the vesting period, or immediately for vested awards. The weighted-average fair value of outstanding, non-vested SAR awards as of April 30, 2016 and May 2, 2015 was $4.57 and $4.58, respectively.

 

The fair value was estimated using a trinomial lattice model with the following assumptions:

 

   April 30, 2016  May 2, 2015
Risk free interest rate yield curve    0.16% - 1.28%     0.00% - 1.50% 
Expected dividend yield   1.0%   1.0%
Expected volatility   36.13%   37.68%
Maximum life         3.9 Years     4.88 Years 
Exercise multiple   1.34    1.31 
Maximum payout  $10.00   $10.00 
Employee exit rate    2.2% - 9.0%     2.2% - 9.0% 

 

The risk free interest rate was based on the U.S. Treasury yield curve in effect at the end of the reporting period. The expected dividend yield was based on our historical quarterly cash dividends, with the assumption that quarterly dividends would continue at that rate. Expected volatility was based on the historical volatility of our stock. The exercise multiple and employee exit rate were based on historical option data.

 

The following table summarizes information regarding stock-based compensation expense recognized for SARs:

 

(In thousands)  Thirteen Weeks
Ended April 30,
2016		  Thirteen Weeks
Ended May 2,
2015
Stock-based compensation expense before the recognized income tax benefit  $140   $64 
Income tax benefit  $53   $25 
           

 

As of April 30, 2016, approximately $254,000 in unrecognized compensation expense remained related to non-vested SARs. This expense is expected to be recognized over a weighted-average period of approximately 1.42 years.