Share-Based Compensation

3 Months Ended

Apr. 30, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Equity Incentive Plan

Pursuant to the Company's 2002 Equity Incentive Plan (the “Plan”), the Company’s board of directors may grant stock options, restricted shares, and restricted stock units to officers, directors, key employees and professional service providers. The Plan, as amended, allows for the issuance of up to a total of 7,600,000 shares under the Plan. As of April 30, 2016, 3,591,495 stock options, restricted shares, or restricted stock units were available for grant.

Common Stock Options

All stock options have a term not greater than ten years. Stock options vest and become exercisable in whole or in part, in accordance with vesting conditions set by the compensation committee of the Company’s board of directors. Options granted to date generally vest over four years from the date of grant.

Stock option activity under the Plan was as follows:



	Options Outstanding		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)
Balance as of January 30, 2016	1,088,674		$	26.31	7.5
Granted	51,611		39.30
Forfeited	(11,250	)	38.06
Exercised	(88,654	)	12.70
Balance as of April 30, 2016	1,040,381		27.99		7.2
Exercisable as of April 30, 2016	508,272		$	20.25	6.3

The fair value of each option award granted to employees, including outside directors, is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions:



	Thirteen Weeks Ended
	April 30, 2016		May 2, 2015
Expected volatility	47.6	%	47.0	%
Risk-free interest rate	1.6	%	1.8	%
Expected life of options	6.4 years		6.4 years
Expected dividend yield	—	%	—	%

The Company uses the simplified method to estimate the expected term of the option. The expected volatility incorporates historical and implied volatility of similar entities whose share prices are publicly available. The risk-free rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant.

The per-share weighted average grant-date fair value of stock options granted for the thirteen weeks ended April 30, 2016 and May 2, 2015 was $18.89 and $13.67, respectively.

Restricted Stock Units and Performance-Based Restricted Stock Units

All restricted stock units ("RSU") and performance-based restricted stock units ("PSU") vest in accordance with vesting conditions set by the compensation committee of the Company’s board of directors. RSU's granted to date have vesting periods ranging from less than one year to five years from the date of grant. PSU's granted to date have vesting periods ranging from one year to five years from the date of grant, including grants that have a cumulative three year performance period, subject to satisfaction of the applicable performance goals established for the respective grant. The Company periodically assesses the probability of achievement of the performance criteria and adjusts the amount of compensation expense accordingly. Compensation is recognized over the vesting period and adjusted for the probability of achievement of the performance criteria.

RSU and PSU activity during the thirteen weeks ended April 30, 2016 was as follows:



	Restricted Stock Units				Performance-Based Restricted Stock Units
	Number		Weighted-Average Grant Date Fair Value		Number		Weighted-Average Grant Date Fair Value
Non-vested balance as of January 30, 2016	211,682		$	33.47	477,463		$	36.48
Granted	84,563		39.23		127,160		39.22
Vested	(645	)	38.71		(77,260	)	38.83
Forfeited	(5,511	)	32.09		—		—
Non-vested balance as of April 30, 2016	290,089		$	35.16	527,363		$	36.80

In connection with the vesting of RSU's and PSU's during the thirteen weeks ended April 30, 2016, the Company withheld 33,940 shares with an aggregate value of $1.3 million in satisfaction of minimum tax withholding obligations due upon vesting.

As of April 30, 2016, there was $27.0 million of total unrecognized compensation costs related to non-vested share-based compensation arrangements (including stock options, restricted stock units and performance-based restricted stock units) granted under the Plan. That cost is expected to be recognized over a weighted average vesting period of 2.7 years.