Stock Based Compensation - Notes to Financial Statements

3 Months Ended

Apr. 30, 2016

Disclosure Of Compensation Related Costs Sharebased Payments Abstract

NOTE 6– STOCK BASED COMPENSATION:

As of April 30, 2016, the Company had three long-term compensation plans pursuant to which stock-based compensation was outstanding or could be granted. The Company’s 1987 Non-Qualified Stock Option Plan is for the granting of options to officers and key employees. As of April 30, 2016, there were no available stock options for grant under this plan. The 2013 Incentive Compensation Plan and 2004 Amended and Restated Incentive Compensation Plan are for the granting of various forms of equity-based awards, including restricted stock and stock options for grant, to officers, directors and key employees. Effective May 23, 2013, shares for grant were no longer available under the 2004 Amended and Restated Incentive Compensation Plan.

The following table presents the number of options and shares of restricted stock initially authorized and available for grant under each of the plans as of April 30, 2016:

	1987	2004	2013
	Plan	Plan	Plan	Total
Options and/or restricted stock initially authorized	5,850,000	1,350,000	1,500,000	8,700,000
Options and/or restricted stock available for grant:
April 30, 2016	-	-	1,166,772	1,166,772

In accordance with ASC 718, the fair value of current restricted stock awards is estimated on the date of grant based on the market price of the Company’s stock and is amortized to compensation expense on a straight-line basis over the related vesting periods. As of April 30, 2016 and January 30, 2016, there was $11,058,000 and $12,214,000, respectively, of total unrecognized compensation expense related to nonvested restricted stock awards, which had a remaining weighted-average vesting period of 2.7 years and 2.6 years, respectively. The total fair value of the shares recognized as compensation expense during the three months ended April 30, 2016 was $353,000 compared to $621,000 for the three months ended May 2, 2015. These expenses are classified as a component of Selling, general and administrative expenses (exclusive of depreciation) in the Condensed Consolidated Statements of Income.

The following summary shows the changes in the shares of unvested restricted stock outstanding during the three months ended April 30, 2016:

			Weighted Average
	Number of		Grant Date Fair
	Shares		Value Per Share
Restricted stock awards at January 30, 2016	576,676	$	29.71
Granted	-		-
Vested	-		-
Forfeited or expired	(29,921)		29.74
Restricted stock awards at April 30, 2016	546,755	$	29.70

The Company’s Employee Stock Purchase Plan allows eligible full-time employees to purchase a limited number of shares of the Company’s Class A Common Stock during each semi-annual offering period at a 15% discount through payroll deductions. During the three months ended April 30, 2016 and May 2, 2015, the Company sold 7,048 and 7,763 shares to employees at an average discount of $5.23 and $5.34 per share, respectively, under the Employee Stock Purchase Plan. The compensation expense recognized for the 15% discount given under the Employee Stock Purchase Plan was approximately $37,000 and $41,000 for the three months ended April 30, 2016 and May 2, 2015, respectively. These expenses are classified as a component of Selling, general and administrative expenses.

As of May 1, 2016, the Company granted 148,591 shares of additional restricted stock to officers and key employees. The shares have a weighted average grant date fair value of $36.83 and will vest over five years at the rate of 33% in each of the third and fourth years and 34% in the fifth. The calculated unearned compensation expense of $5,473,000 will be charged as a component of additional paid-in capital and amortized to compensation expense over the related vesting term.