Share-Based Compensation

12 Months Ended

Jan. 28, 2017

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

Share-Based Compensation

hare-Based Compensation

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 January 28, 2017, 3,617,567 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 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
Balance as of February 1, 2014	1,304,620		$	20.90	8.5
Granted	253,973		36.18
Forfeited	(169,850	)	31.75
Cancelled	(20,000	)	39.41
Exercised	(207,809	)	7.11
Balance as of January 31, 2015	1,160,934		24.80		8.0
Granted	116,894		28.58
Forfeited	(73,790	)	34.93
Exercised	(115,364	)	7.90
Balance as of January 30, 2016	1,088,674		26.31		7.5
Granted	51,611		39.30
Forfeited	(47,881	)	36.18
Exercised	(225,767	)	14.55
Balance as of January 28, 2017	866,637		29.60		6.7
Exercisable as of January 28, 2017	529,182		$	26.46	6.4

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:

	Fiscal Year
	2016		2015		2014
Expected volatility	47.6	%	47.0	%	47.9	%
Risk-free interest rate	1.6	%	1.8	%	1.9	%
Expected life of options	6.4 years		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 to employees in fiscal 2016, fiscal 2015 and fiscal 2014 was $18.89, $13.67 and $17.59, respectively. The total intrinsic value of stock options exercised during fiscal 2016, fiscal 2015 and fiscal 2014 was $6.4 million, $3.2 million and $7.0 million, respectively. The aggregate intrinsic value of stock options exercisable and stock options outstanding as of January 28, 2017 was $6.2 million and $7.5 million, respectively. In fiscal 2016, fiscal 2015 and fiscal 2014, the Company received cash from the exercise of options of $3.3 million, $0.9 million, $1.5 million, respectively, and excess tax benefits from option exercises and restricted stock of $1.6 million, $0.6 million and $2.0 million, respectively. Upon option exercise, the Company issued new shares of common stock.

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 having 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 under the Plan 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 February 1, 2014	—		$	—	—		$	—
Granted	175,772		35.84		396,055		38.20
Vested	(22,286	)	34.40		—		—
Forfeited	(5,716	)	38.52		(3,874	)	38.71
Non-vested balance as of January 31, 2015	147,770		35.95		392,181		38.20
Granted	115,248		30.62		85,282		28.58
Vested	(44,574	)	34.40		—		—
Forfeited	(6,762	)	33.01		—		—
Non-vested balance as of January 30, 2016	211,682		33.47		477,463		36.48
Granted	127,787		41.33		127,160		39.22
Vested	(46,168	)	37.95		(77,260	)	38.83
Forfeited	(18,125	)	34.84		(22,807	)	34.20
Non-vested balance as of January 28, 2017	275,176		$	36.27	504,556		$	36.91

In connection with the vesting of RSU's and PSU's during fiscal 2016, the Company withheld 46,750 shares with an aggregate value of $1.9 million in satisfaction of minimum tax withholding obligations due upon vesting. In connection with the vesting of RSU's during fiscal 2015, the Company withheld 9,462 shares with an aggregate value of $0.3 million in satisfaction of minimum tax withholding obligations due upon vesting. In connection with the vesting of RSU's during fiscal 2014, the Company withheld 9,173 shares with an aggregate value of $0.3 million in satisfaction of minimum tax withholding obligations due upon vesting.

As of January 28, 2017, there was $18.6 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 2.2 years.