NOTE 12 – STOCK-BASED COMPENSATION

The Company’s board of directors may make awards under the 2011 Stock Plan (the “Stock Plan”) to officers, directors and key employees. Awards may include nonqualified stock options (“NSOs”), incentive stock options (“ISOs”), and restricted or unrestricted stock. The specific provisions for each award made pursuant to the terms of the Stock Plan are documented in a written agreement between the Company and the awardee.

All stock options awarded under the Stock Plan shall have an exercise price per share at least equal to the common stock’s market value on the date of grant. Stock options shall have terms no longer than ten years. Commencing in January 2018, stock options have been awarded with one-third of each stock option vesting on each of the first three anniversaries of the corresponding award date. Earlier stock option awards typically became exercisable one year from the date of award. As of January 31, 2020, there were approximately 1.7 million shares of the Company’s common stock reserved for issuance under the Stock Plan; this number includes 381,833 shares of common stock available for future awards.

Summaries of stock option activity under the Company’s stock option plans for Fiscal 2020, 2019 and 2018, along with corresponding weighted average per share amounts, are presented below (shares in thousands):




		Exercise		Remaining
	Shares	Price		Term (years)	Fair Value
Outstanding, February 1, 2017	707	$	39.04	7.82	$	10.22
Granted	302	$	53.49
Exercised	(110)	$	28.81
Forfeited	(10)	$	71.75
Outstanding, January 31, 2018	889	$	44.83	7.91	$	11.74
Granted	257	$	40.54
Exercised	(6)	$	17.19
Outstanding, January 31, 2019	1,140	$	44.01	7.54	$	11.22
Granted	238	$	44.76
Exercised	(61)	$	26.67
Forfeited	(46)	$	48.47
Outstanding, January 31, 2020	1,271	$	44.83	7.18	$	11.06

Exercisable, January 31, 2020	823	$	45.58	6.20	$	11.78

The changes in the number of non-vested options to purchase shares of common stock for Fiscal 2020, 2019 and 2018, and the weighted average fair value per share for each number, are presented below (shares in thousands):


	Shares	Fair Value
Non-vested, February 1, 2017	270	$	14.93
Granted	302	$	13.55
Vested	(260)	$	15.31
Forfeitures	(10)	$	19.14
Non-vested, January 31, 2018	302	$	13.55
Granted	257	$	9.31
Vested	(184)	$	14.75
Non-vested, January 31, 2019	375	$	10.05
Granted	238	$	9.60
Vested	(134)	$	10.25
Forfeitures	(31)	$	10.28
Non-vested, January 31, 2020	448	$	9.74

Pursuant to the terms of the Stock Plan and as described in the corresponding written agreements with the executives, the Company awarded performance-based restricted stock units to two senior executives in April 2019 and 2018 covering up to 36,000 shares of common stock at each date plus a number of shares to be determined based on the amount of cash dividends deemed paid on shares earned pursuant to the awards. The release of the stock restrictions depends on the total shareholder return performance of the Company’s common stock measured against the performance of a peer-group of common stocks over three-year periods. The award-date fair value amounts for restricted stock units were determined by using the per share market price of the Company’s common stock on the dates of award and the target number of shares for the awards, by assigning equal probabilities to the thirteen possible payout outcomes at the ends of the three-year vesting periods, and by computing the weighted average of the outcome amounts. For each case, the estimated fair value amount was calculated to be 88.5% of the aggregate market value of the target number of shares on the award date.

The fair values of stock options and restricted stock units are recorded as stock compensation expense over the vesting periods of the corresponding awards. Expense amounts related to stock awards were $2.1 million, $1.6 million and $4.7 million for Fiscal 2020, 2019 and 2018, respectively. At January 31, 2020, there was $4.4 million in unrecognized compensation cost related to outstanding stock awards that the Company expects to expense over the next three years.

The total intrinsic values for the stock options exercised during Fiscal 2020, 2019 and 2018 were $1.4 million, $0.2 million and $3.6 million, respectively. At January 31, 2020, the aggregate market value amounts of the shares of common stock subject to outstanding and exercisable stock options that were “in-the-money” exceeded the aggregate exercise prices of such options by $5.1 million and $4.6 million, respectively.

The Company estimates the weighted average fair value of stock options on the date of award using a Black-Scholes option pricing model, which was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. The Company believes that its past stock option exercise activity is sufficient to provide it with a reasonable basis upon which to estimate the expected life of newly awarded stock options. Risk -free interest rates are determined by blending the rates for three to five year US Treasury notes. The dividend yield is based on the Company's current annual dividend amount. The calculations of the expected volatility factors are based on the monthly closing prices of the Company’s common stock for the five-year periods preceding the dates of the corresponding awards.

The fair value amounts of each stock option granted in Fiscal 2020, 2019 and 2018 were estimated on the corresponding date of award using the Black-Scholes option-pricing model based on the following weighted average assumptions:


	2020		2019		2018
Dividend yield	2.3	%	2.5	%	1.7	%
Expected volatility	32.5	%	34.5	%	37.3	%
Risk-free interest rate	1.9	%	2.7	%	1.8	%
Expected life (in years)	3.3		3.3		3.3

The Company maintains 401(k) savings plans pursuant to which the Company makes discretionary contributions for the eligible and participating employees. The Company’s expense amounts related to these defined contribution plans were approximately $1.7 million, $2.4 million and $2.8 million for Fiscal 2020, 2019 and 2018, respectively. The Company also maintains nonqualified plans whereunder the payments of certain amounts of incentive compensation earned by key employees are deferred for periods of five to seven years; payments are conditioned on continuous employment.