Shareholders' Equity

12 Months Ended

Feb. 01, 2020

Shareholders' Equity

Shareholders' Equity

Note 8. Shareholders’ Equity

Common Stock

We had 60 million shares of $1.00 par value per share common stock authorized for issuance as of February 1, 2020 and February 2, 2019. We had 17 million shares of common stock issued and outstanding as of February 1, 2020 and February 2, 2019.

Long-Term Stock Incentive Plan

As of February 1, 2020, less than 1 million shares were available for issuance under our Long-Term Stock Incentive Plan (the "Long-Term Stock Incentive Plan"). The Long-Term Stock Incentive Plan allows us to grant equity-based awards to employees and non-employee directors in the form of stock options, stock appreciation rights, restricted shares and/or restricted share units. No additional shares are available under any predecessor plans.

Restricted share awards granted to officers and other key employees generally vest three or four years from the date of grant if (1) the performance threshold, if any, was met and (2) the employee is still employed by us on the vesting date. At the time that restricted shares are issued, the shareholder is generally, subject to the terms of the respective agreement, entitled to the same dividend and voting rights as other holders of our common stock as long as the restricted

shares are outstanding. The employee generally is restricted from transferring or selling any restricted shares and generally forfeits the awards upon the termination of employment prior to the end of the vesting period. The specific provisions of the awards, including exercisability and term of the award, are evidenced by agreements with the employee as determined by the compensation committee of our Board of Directors.

The table below summarizes the restricted share award activity for officers and other key employees (in shares) during Fiscal 2019, Fiscal 2018, and Fiscal 2017:

	Fiscal 2019			Fiscal 2018			Fiscal 2017
		Weighted-			Weighted-			Weighted-
		average			average			average
	Number of	grant date		Number of	grant date		Number of	grant date
	Shares	fair value		Shares	fair value		Shares	fair value
Restricted share awards outstanding at beginning of fiscal year	257,890	$	66	211,045	$	63	228,682	$	69
Service-based restricted share awards granted/issued	42,573	$	76	49,726	$	79	58,753	$	56
Performance-based restricted share awards issued related to prior year performance awards	43,152	$	79	72,427	$	57	30,443	$	76
Restricted share awards vested, including restricted shares repurchased from employees for employees’ tax liability	(87,252)	$	71	(73,408)	$	58	(92,239)	$	78
Restricted share awards forfeited	(4,439)		69	(1,900)		62	(14,594)		58
Restricted share awards outstanding at end of fiscal year	251,924	$	68	257,890	$	66	211,045	$	63

The following table summarizes information about unvested restricted share awards as of February 1, 2020. The unvested restricted share awards will be settled in shares of our common stock on the vesting date, subject to the employee still being an employee at that time.

	Number of	Average
	Unvested	Market
	Share	Price on
Description	Awards	Date of Grant
Service-based & Performance-based Restricted Share Awards Vesting in April 2020	114,003	$	58
Service-based & Performance-based Restricted Share Awards Vesting in April 2021	83,248	$	76
Service-based Restricted Share Awards Vesting in April 2022	54,673	$	75
Total	251,924

Restricted shares pursuant to performance-based awards are not issued until approved by our compensation committee following completion of the performance period. During Fiscal 2019, approximately 40,000 restricted shares were earned by recipients related to the Fiscal 2019 performance period; however, these share awards were not included in the tables above as the awards had not been issued as of February 1, 2020. The grant date fair value of these 40,000 awards was $76 per share, and the awards vest in April 2022.

As of February 1, 2020, there was $8 million of unrecognized compensation expense related to the unvested restricted share awards, which have been granted to employees but have not yet vested, including the Fiscal 2019 performance-based awards issued in the first quarter of Fiscal 2020. As of February 1, 2020, the weighted average remaining life of the outstanding awards was one year.

In addition, we grant restricted shares to our non-employee directors for a portion of each non-employee director’s annual compensation. The non-employee directors must complete certain service requirements; otherwise, the restricted shares are subject to forfeiture. On the date of issuance, the non-employee directors are entitled to the same dividend and voting rights as other holders of our common stock. The non-employee directors are restricted from transferring or selling the restricted shares prior to the end of the vesting period.

Employee Stock Purchase Plan

There were less than 1 million shares of our common stock authorized for issuance under our Employee Stock Purchase Plan ("ESPP") as of February 1, 2020. The ESPP allows qualified employees to purchase shares of our common stock on a quarterly basis, based on certain limitations, through payroll deductions. The shares purchased pursuant to the ESPP are not subject to any vesting or other restrictions. On the last day of each calendar quarter, the accumulated payroll deductions are applied toward the purchase of our common stock at a price equal to 85% of the closing market price on that date. Equity compensation expense related to the employee stock purchase plan recognized was less than $1 million in each of Fiscal 2019, Fiscal 2018 and Fiscal 2017.

Preferred Stock

We had 30 million shares of $1.00 par value preferred stock authorized for issuance as of February 1, 2020 and February 2, 2019. No preferred shares were issued or outstanding as of February 1, 2020 or February 2, 2019.