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Share-Based Compensation

3 Months Ended

May 04, 2024

Share-Based Compensation

Share-Based Compensation

Note 11 Share-Based Compensation

The Company recognized share-based compensation expense of $3.7 million and $2.9 million during the thirteen weeks ended May 4, 2024 and April 29, 2023, respectively.

The Company had net issuances of 61,388 and 558,847 shares of common stock during the thirteen weeks ended May 4, 2024 and April 29, 2023, respectively, for restricted stock grants, stock performance awards issued to employees and common and restricted stock grants issued to non-employee directors, net of forfeitures and shares withheld to satisfy the tax withholding requirement.

Restricted Stock

The following table summarizes restricted stock activity for the periods ended May 4, 2024 and April 29, 2023:

Thirteen Weeks Ended

Thirteen Weeks Ended

May 4, 2024

April 29, 2023

Weighted-

Weighted-

Total Number

Average

Total Number

Average

of Restricted

Grant Date

of Restricted

Grant Date

Shares

Fair Value

Shares

Fair Value

February 3, 2024

1,512,421

$

21.96

January 28, 2023

1,603,960

$

18.57

Granted

303,285

41.05

Granted

546,384

23.09

Forfeited

(39,352)

23.16

Forfeited

(122,245)

17.96

Vested

(480,269)

19.99

Vested

(420,504)

12.88

May 4, 2024

1,296,085

$

27.12

April 29, 2023

1,607,595

$

21.64

The Company granted 303,285 restricted shares during the thirteen weeks ended May 4, 2024, which have a graded vesting term of three years, with 50% vesting after two years and 50% after three years. Of the 546,384 restricted shares granted during the thirteen weeks ended April 29, 2023, 533,584 shares have a graded-vesting term of three years, with 50% vesting after two years and 50% after three years, 7,000 shares have a graded-vesting term of three years, with 50% vesting after eighteen months and 50% after three years, and 5,800 shares have a cliff-vesting term of two years.

Performance Awards

During the thirteen weeks ended May 4, 2024, the Company granted performance share awards for a targeted 165,854 shares, with a weighted-average grant date fair value of $41.05 in connection with the 2024 performance award (2024 – 2026 performance period). During the thirteen weeks ended April 29, 2023, the Company granted performance share awards for a targeted 276,434 shares, with a weighted-average grant date fair value of $23.12 in connection with the 2023 performance award (2023 – 2025 performance period). At the end of the vesting period, the employee will have earned an amount of shares or units between 0% and 200% of the targeted award, depending on the attainment of certain financial goals for the service period and individual achievement of strategic initiatives over the cumulative period of the award. The performance awards are payable in common stock for up to 100% of the targeted award and the remainder in cash if any portion exceeds the targeted award. Compensation expense is recognized based on the fair value of the award and the anticipated number of shares or units to be awarded for each tranche in accordance with the vesting schedule of the units over the three-year service period.

Restricted Stock Units for Non-Employee Directors

Equity-based grants may be made to non-employee directors in the form of restricted stock units ("RSUs") payable in cash or common stock at no cost to the non-employee director. The RSUs are subject to a vesting requirement (usually one year) and earn dividend equivalents at the same rate as dividends on the Company’s common stock. The dividend equivalents, which vest immediately, are automatically reinvested in additional RSUs. Expense related to the initial grant of RSUs is recognized ratably over the vesting period based upon the fair value of the RSUs. The RSUs payable in cash are remeasured at the end of each period. Expense for the dividend equivalents is recognized at fair value when the dividend equivalents are granted. Gains and losses resulting from changes in the fair value of the RSUs payable in cash subsequent to the vesting period and through the settlement date are recognized in the Company’s condensed consolidated statements of earnings. The Company granted 879 and 1,423 RSUs for dividend equivalents during the thirteen weeks ended May 4, 2024 and April 29, 2023, respectively, with weighted-average grant date fair values of $35.57 and $21.47, respectively.