Stock-Based Compensation

6 Months Ended

Jul. 30, 2011

Stock-Based Compensation [Abstract]

Stock-Based Compensation

2.           Stock-Based Compensation

As approved by the Company’s shareholders, the Company established the Amended and Restated 2001 Equity Incentive Plan (the “2001 Equity Incentive Plan”) and the Amended and Restated 2008 Equity Incentive Plan (the “2008 Equity Incentive Plan” and collectively with the 2001 Equity Incentive Plan, the “Equity Incentive Plans”) to reward, retain and attract key personnel.  The Equity Incentive Plans provide for grants of nonqualified or incentive stock options, stock appreciation rights (“SARs”), performance shares or units, stock units and stock grants.  To fund the 2001 Equity Incentive Plan, 12,375,000 shares of the Company’s common stock were reserved for issuance upon exercise of awards.  On June 9, 2011, the Company’s shareholders approved the Second Amended and Restated 2008 Equity Incentive Plan to increase the number of shares available for stock awards under the 2008 Equity Incentive Plan from 2,750,000 shares to 4,550,000 shares.

The following table summarizes stock-based compensation expense by type of grant for the thirteen and twenty-six weeks ended July 30, 2011 and July 31, 2010 (in thousands):

	Thirteen Weeks Ended						Twenty-Six Weeks Ended
	July 30, 2011			July 31, 2010			July 30, 2011			July 31, 2010
Stock options and SARs	$	1,097		$	1,023		$	2,123		$	1,756
Non-vested stock		685			200			1,094			642
Performance shares		515			568			862			560
Total compensation expense		2,297			1,791			4,079			2,958
Related tax benefit		(853	)		(681	)		(1,521	)		(1,124	)
	$	1,444		$	1,110		$	2,558		$	1,834

As of July 30, 2011, the Company had unrecognized compensation cost of $19.1 million related to stock-based compensation awards granted.  That cost is expected to be recognized over a weighted average period of 2.7 years.

The following table provides the significant weighted average assumptions used in determining the estimated fair value, at the date of grant under the Black-Scholes option-pricing model, of SARs granted in the twenty-six weeks ended July 30, 2011 and July 31, 2010:

	Twenty-Six Weeks Ended
	July 30, 2011	July 31, 2010
Expected volatility	63.4% - 63.7%	62.1% - 63.0%
Weighted average volatility	63.6%	62.1%
Risk-free rate	1.5% - 1.9%	1.8% - 2.3%
Expected life (in years)	4.3	4.3
Expected dividend yield	1.6% - 1.9%	1.3% - 2.1%

The expected volatility was based on historical volatility for a period equal to the award’s expected life.  The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant.  The expected life (estimated period of time outstanding) was estimated using the historical exercise behavior of employees.  The expected dividend yield is based on the current dividend payout activity and the market price of the Company’s stock.

Stock Options and SARs

The right to exercise stock options and SARs generally vests over four years from the date of grant, with 25% vesting at the end of each of the first four years following the date of grant.  Stock options and SARs are settled by issuance of common stock.  Options issued prior to January 29, 2005 will generally expire, if not exercised, within ten years from the date of the grant, while stock options and SARs granted after that date generally expire, if not exercised, within seven years from the date of grant.  The weighted average grant date fair value for SARs granted during the twenty-six weeks ended July 30, 2011 and July 31, 2010 was $8.69 and $6.84, respectively.

The following table summarizes information about stock options and SARs outstanding under the Equity Incentive Plans as of July 30, 2011 and changes during the twenty-six weeks ended July 30, 2011:

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (in thousands)
Outstanding at January 29, 2011		4,295,148		$	14.99
Granted		661,950			18.84
Exercised		(604,847	)		11.50
Forfeited		(139,625	)		14.87
Outstanding at July 30, 2011		4,212,626		$	16.10		4.1	$	10,776
Vested or expected to vest at July 30, 2011		3,823,686		$	16.20		4.0	$	9,571
Exercisable at July 30, 2011		2,267,926		$	16.99		2.9	$	4,752

The following table summarizes information about non-vested stock option awards and SARs outstanding as of July 30, 2011 and changes during the twenty-six weeks ended July 30, 2011:

Stock Options/SARs	Number of Shares			Weighted Average Grant Date Fair Value
Non-vested at January 29, 2011		2,040,565		$	5.61
Granted		661,950			8.69
Vested		(662,565	)		5.71
Forfeited		(95,250	)		5.48
Non-vested at July 30, 2011		1,944,700		$	6.63

The aggregate intrinsic value of stock options and SARs, defined as the amount by which the market price of the underlying stock on the date of exercise exceeds the exercise price of the award, exercised during the twenty-six weeks ended July 30, 2011 and July 31, 2010 was $4.1 million and $5.1 million, respectively.

Non-vested Stock

The Company has granted shares of non-vested stock to members of management and independent directors.  The non-vested stock converts one for one to common stock at the end of the vesting period at no cost to the recipient to whom it is awarded.  The vesting period of the non-vested stock ranges from one to four years from the date of grant.

The following table summarizes information about non-vested stock granted by the Company as of July 30, 2011 and changes during the twenty-six weeks ended July 30, 2011:

Non-vested Stock	Number of Shares			Weighted Average Grant Date Fair Value
Outstanding at January 29, 2011		283,123		$	12.16
Granted		296,120			18.42
Vested		(83,816	)		13.16
Forfeited		(22,541	)		11.53
Outstanding at July 30, 2011		472,886		$	15.93

The aggregate intrinsic value of non-vested stock that vested during the current year was $1.5 million.  The payment of the employees’ tax liability for a portion of the vested shares was satisfied by withholding shares with a fair value equal to the tax liability.  As a result, the actual number of shares issued was 81,170.

Performance Shares

The Company has granted performance shares to members of senior management, at no cost to the recipient, as a means of rewarding them for the Company’s long-term performance based on shareholder return performance measures.  The actual number of shares that could be issued ranges from zero to a maximum of two times the number of granted shares outstanding as reflected in the table below.  The actual number of shares issued is determined by the Company’s shareholder return performance relative to a specific group of companies over a three-year performance cycle.  Compensation expense, which is recorded ratably over the vesting period, is based on the fair value at grant date and the anticipated number of shares of the Company’s common stock, which is determined on a Monte Carlo probability model.  Grant recipients do not have any shareholder rights until the granted shares have been issued.

The following table summarizes information about the performance shares that remain outstanding as of July 30, 2011:

								Weighted
								Average
	Target		Target			Target		Grant Date
Period	Shares		Shares			Shares		Fair Value per
Granted	Granted		Forfeited			Outstanding		Share
2009		137,500		(24,000	)		113,500	$	12.79
2010		138,000		(5,000	)		133,000		19.75
2011		74,375		-			74,375		25.00
Total		349,875		(29,000	)		320,875

During the current year, 90,298 shares, with an aggregate intrinsic value of $1.7 million, vested related to the 2008 performance share grant.  The payment of the recipients’ tax liability of approximately $0.5 million was satisfied by withholding shares with a fair value equal to the tax liability.  As a result, the actual number of shares issued was 65,246.