(8) Stockholders’ Equity

Repurchases of common stock

On August 18, 2015, the Company’s Board of Directors approved a program that authorized the purchase of up to $15.0 million in shares of the Company’s common stock. The 2015 repurchase program was exhausted during the fourth quarter of 2015. During 2015, the Company repurchased 667,438 shares of its common stock in the open market at an aggregate cost of $15.0 million. As of January 28, 2017, there were no additional shares which could be repurchased pursuant to the Board of Directors’ authorization.

Dividends

In fiscal 2016, we paid four quarterly dividends of $0.06 per common share on March 15, 2016, June 14, 2016, September 13, 2016 and December 13, 2016. In fiscal 2015, we paid two quarterly dividends of $0.06 per common share on September 15, 2015 and December 15, 2015. On February 7, 2017, the Company’s Board of Directors declared a dividend of $0.06 per common share, which was paid on March 14, 2017 to stockholders of record as of February 28, 2017. Any determination to declare and pay cash dividends for future quarters will be made by the Board of Directors.

Stock-Based Compensation

On April 6, 2012, the Company adopted the Citi Trends, Inc. 2012 Incentive Plan (the “2012 Plan”), which became effective upon approval by the Company’s stockholders on May 23, 2012. The 2012 Plan is a successor plan to the 2005 Citi Trends, Inc. Long-Term Incentive Plan (the “2005 Plan”), which became effective upon the consummation of the Company’s initial public offering in May 2005.

The 2005 Plan provided for the grant of incentive and nonqualified options, nonvested restricted stock and other forms of stock-based compensation to key employees and directors. The 2012 Plan provides for the grant of incentive and nonqualified options, nonvested restricted stock and other forms of stock-based and cash-based compensation to key employees and directors.

Shares of time-based nonvested restricted stock granted to employees vest in either equal installments over three or four years from the date of grant, or over three years at 25% on the first and second anniversaries and 50% on the third anniversary. Shares issued to directors vest one year from the date of grant. The Company records compensation expense for grants of time-based nonvested restricted stock on a straight line basis over the requisite service period of the stock recipients which is equal to the vesting period of the stock. Total compensation cost for such stock is calculated based on the closing market price on the date of grant multiplied by the number of shares granted. The Company expects to recognize $2.0 million in future compensation expense from the grants of time-based restricted stock over the requisite service period of up to three years. Compensation costs for grants of performance-based restricted stock units (“RSUs”) are recorded in full on the date of grant using a lattice model to estimate fair market value. During fiscal 2016, 2015 and 2014, compensation expense arising from time-based nonvested restricted stock grants and performance-based RSUs totaled $2.9 million, $4.1 million and $4.0 million, respectively.

A summary of activity related to time-based nonvested restricted stock grants during fiscal year 2016 is as follows:


	Nonvested	Weighted Average
	Restricted	Grant Date
	Shares	Fair Value
Outstanding as of January 30, 2016	352,587	$	16.67
Granted	134,710		17.84
Vested	(244,311)		15.15
Forfeited	(25,018)		18.44
Outstanding as of January 28, 2017	217,968	$	18.89

In March 2016, the Company granted 24,816 RSUs to two employees. The RSUs had performance vesting criteria which were based upon the closing price of the Company’s stock achieving certain thresholds. The shares vest 25% upon achieving a closing stock price for a 20 consecutive day period of $20.75; $23.50; $26.25; and $29.00, respectively. The awards expire three years from the date of grant. On the date of grant, the Company expensed $238,000 which was the estimated fair market value. None of the thresholds were achieved in 2016.

In March 2015, the Company granted 16,823 RSUs to two employees. The RSUs had performance vesting criteria which were based upon the closing price of the Company’s stock achieving certain thresholds. The shares vest 25% upon achieving a closing stock price for a 20 consecutive day period of $27.00; $29.25; $31.50; and $33.50, respectively. The awards expire three years from the date of grant. On the date of grant, the Company expensed $331,000 which was the estimated fair market value. None of the thresholds were achieved in 2015 or 2016.

Cash flows resulting from tax deductions in excess of the cumulative compensation cost recognized for options exercised and vesting of restricted shares (“excess tax benefits”) are classified as financing cash flows. Increase in such excess tax benefits was $0.2 million, $1.3 million and $0.3 million in fiscal 2016, 2015 and 2014, respectively.

Compensation expense associated with stock options is based on an estimate of the fair value of each option award on the date of grant using the Black-Scholes Merton option pricing model. Expected volatility is based on estimated future volatility of the Company’s common stock price. No compensation expense for stock options was recorded during fiscal 2016, 2015 or 2014 as the last grant vested prior to the beginning of fiscal 2014.

As of January 28, 2017, no options remained outstanding under the 2005 Plan. No options have been issued under the 2012 Plan. The Board of Directors determines the exercise prices of option grants. Past option grants generally vested in equal installments over four years from the date of grant for employees and over one to three years for directors and were generally exercisable up to ten years from the date of grant. The exercise price of stock options may be satisfied through net share settlements. A summary of the status of stock options under the Company’s stock option plans and changes during fiscal 2016 is presented in the table below:


	2016
				Weighted Average
		Weighted Average		Remaining	Aggregate
		Exercise		Contractual	Intrinsic
	Options	Price		Term (Years)	Value

Outstanding as of January 30, 2016	16,700	$	41.09	0.3	$	—
Granted	—		—	—		—
Exercised	—		—	—		—
Net shares settled	—		—	—		—
Forfeited	(16,700)		41.09	—		—

Outstanding as of January 28, 2017	—	$	—	—	$	—

Vested as of January 28, 2017	—	$	—	—	$	—

Exercisable as of January 28, 2017	—	$	—	—	$	—

As of January 30, 2016, the range of exercise prices was $38.40 to $44.03. As of January 31, 2015, the range of exercise prices was $14.00 to $44.03.

No options were exercised in 2016. Cash received from options exercised totaled $70,000 in fiscal 2015, and $28,000 in fiscal 2014. The intrinsic value of the options exercised in fiscal 2015 was $61,000.