Stock Based Compensation - Notes to Financial Statements

12 Months Ended

Feb. 02, 2019

15. Stock Based Compensation:

As of February 2, 2019, the Company had four 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 February 2, 2019, there were no available stock options for grant. The 2018 Incentive Compensation Plan, 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 24, 2018 and May 23, 2013, shares for grant were no longer available under the 2013 Incentive Compensation Plan and 2004 Amended and Restated Incentive Compensation Plan, respectively.

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 February 2, 2019:

	1987	2004	2013	2018
	Plan	Plan	Plan	Plan	Total
Options and/or restricted stock initially authorized	5,850,000	1,350,000	1,500,000	4,725,000	13,425,000
Options and/or restricted stock available for grant:
February 3, 2018	-	-	856,473	-	856,473
February 2, 2019	-	-	-	4,514,151	4,514,151

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 a five-year vesting period. As of February 2, 2019, there was $11,989,000 of total unrecognized compensation expense related to unvested restricted stock awards, which is expected to be recognized over a remaining weighted-average vesting period of 2.2 years. The total grant date fair value of the shares recognized as compensation expense during the twelve months ended February 2, 2019, February 3, 2018 and January 28, 2017 was $4,833,000, $4,093,000 and $4,091,000, respectively. The expenses are classified as a component of Selling, general and administrative expenses in the Consolidated Statements of Income and Comprehensive Income.

The following summary shows the changes in the shares of unvested restricted stock outstanding during the years ended February 2, 2019, February 3, 2018 and January 28, 2017:

			Weighted Average
	Number of		Grant Date Fair
	Shares		Value Per Share
Restricted stock awards at January 30, 2016	576,676	$	29.71
Granted	148,591		36.83
Vested	(103,808)		25.19
Forfeited or expired	(60,136)		31.68

Restricted stock awards at January 28, 2017	561,323	$	32.22
Granted	191,919		22.44
Vested	(125,761)		26.40
Forfeited or expired	(32,302)		31.52

Restricted stock awards at February 3, 2018	595,179	$	30.33
Granted	354,385		16.20
Vested	(139,669)		29.87
Forfeited or expired	(38,044)		24.34

Restricted stock awards at February 2, 2019	771,851	$	24.22

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 twelve month period ended February 2, 2019, the Company sold 44,770 shares to employees at an average discount of $2.25 per share under the Employee Stock Purchase Plan. The compensation expense recognized for the 15% discount given under the Employee Stock Purchase Plan was approximately $101,000, $86,000 and $88,000 for fiscal years 2018, 2017 and 2016, respectively. These expenses are classified as a component of Selling, general and administrative expenses.

The following is a summary of changes in stock options outstanding during the year ended February 2, 2019:

				Weighted
			Weighted	Average
			Average	Remaining		Aggregate
			Exercise	Contractual		Intrinsic
	Shares		Price	Term		Value (a)
Options outstanding at February 3, 2018	8,051	$	23.56	5.25 years	$	-
Granted	-		-
Forfeited or expired	-
Exercised	(8,051)		-
Outstanding at February 2, 2019	-	$	-	0 years	$	-
Vested and exercisable at February 2, 2019	-	$	-	0 years	$	-

(a) The intrinsic value of a stock option is the amount by which the market value of the underlying stock exceeds the exercise price of the option.

No options were granted in fiscal 2018, fiscal 2017 and fiscal 2016. The Company utilizes the Black–Scholes method to estimate the fair value of share based payments.

The total intrinsic value of options exercised during the years ended February 2, 2019, February 3, 2018 and January 28, 2017 were $5,000, $0 and $109,000, respectively.

The stock option expense was $4,000, $17,000 and $17,000 for the twelve months ended February 2, 2019, February 3, 2018 and January 28, 2017, respectively.

Stock option awards outstanding under the Company’s current plans were granted at exercise prices which were equal to the market value of the Company’s stock on the date of grant, vest over five years, and expire no later than ten years after the grant date.