STOCK-BASED COMPENSATION

9 Months Ended

Nov. 02, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

The following table summarizes the Company’s stock-based compensation expense (in thousands):

	Thirteen Weeks Ended				Thirty-nine Weeks Ended
	November 2, 2013		October 27, 2012		November 2, 2013		October 27, 2012
Deferred Awards	$	3,243	$	2,514	$	10,085	$	8,115
Performance Awards	2,298		935		6,406		2,291
Total stock-based compensation expense (1)	$	5,541	$	3,449	$	16,491	$	10,406

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(1) During the Third Quarter 2013 and the Third Quarter 2012, approximately $0.3 million and $0.4 million, respectively, were included in cost of sales. During Year-To-Date 2013 and Year-To-Date 2012, approximately $1.9 million and $1.1 million, respectively, were included in cost of sales. All other stock-based compensation is included in selling, general & administrative expenses.

The Company recognized a tax benefit related to stock-based compensation expense of approximately $6.5 million and $4.1 million for Year-To-Date 2013 and Year-To-Date 2012, respectively.

Awards Granted During Year-To-Date 2013

The Company granted Deferred Awards and Performance Awards to various executives and members of our Board of Directors during Year-To-Date 2013. Awards were issued in connection with annual performance reviews, new hires and contractual obligations. Generally, the Deferred Awards have a three year vesting period with one third of the award vesting annually.  Deferred Awards granted to the Board of Directors vest generally after one year. In general, the Performance Awards have three annual performance periods and one three-year cumulative performance period and, if earned, vest upon completion of the three year performance period. As required by her employment contract, the Performance Award granted to the Company's Chief Executive Officer and President, if earned, has a one year vest period. Depending on the final adjusted operating income for the Company's performance periods, the percentage of Target Shares earned can be 0% and range up to 200%.

Unfavorable weather conditions across the country resulted in the Company achieving revenues which were well below operating plan for the first quarter of 2013. As a result, prior to the end of the first quarter of 2013, the Board of Directors chose to revise the operating plan for the 2013 fiscal year. The Board revised the plan in a manner which will require management to reverse the first quarter trends and to achieve results for the remainder of fiscal 2013 which exceed the results attained during the comparable period in fiscal 2012. Following the Board action, the Compensation Committee revised the performance target (and related threshold and maximum) for purposes of the Company's Performance Awards granted during the first quarter of 2013 to bring them in line with the revised operating plan. However, in order to take into account the first quarter of 2013 results, the revised threshold, target and maximum levels were set such that achievement of the revised performance target for fiscal 2013 will result in less than the number of Target Shares being earned. The revisions to Performance Award targets resulted in an increase to stock-based compensation expense of $1.7 million for the Company's Year-To-Date 2013.

Changes in the Company’s Unvested Stock Awards during Year-To-Date 2013

Deferred Awards

	Number of Shares		Weighted Average Grant Date Fair Value
	(in thousands)
Unvested Deferred Awards, beginning of period	560		$	49.53
Granted	372		48.61
Vested	(191	)	49.46
Forfeited	(47	)	48.93
Unvested Deferred Awards, end of period	694		$	49.10

Total unrecognized stock-based compensation expense related to unvested Deferred Awards approximated $24.1 million as of November 2, 2013, which will be recognized over a weighted average period of approximately 2.5 years.

Performance Awards

	Number of Shares (1)		Weighted Average Grant Date Fair Value
	(in thousands)
Unvested Performance Awards, beginning of period	172		$	48.59
Granted	204		47.89
Vested	(2	)	46.48
Forfeited	(10	)	47.25
Unvested Performance Awards, end of period	364		$	48.25

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(1) For those awards in which the performance period is complete, the number of unvested shares is based on actual shares that will vest upon completion of the service period. For those awards in which the performance period is not yet complete, the number of unvested shares is based on the participants earning their Target Shares at 100%. 

For those awards in which the performance period is not yet complete, the cumulative expense recognized reflects changes in operating income estimates as they occur. Total unrecognized stock-based compensation expense related to unvested Performance Awards approximated $7.6 million as of November 2, 2013, which will be recognized over a weighted average period of approximately 1.6 years.

Stock Options

At November 2, 2013, there were no unvested stock options.

Outstanding Stock Options

Changes in the Company’s outstanding stock options for Year-To-Date 2013 were as follows:

	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value
	(in thousands)				(in years)	(in thousands)
Options outstanding, beginning of period	84		$	30.08	3.5	$	1,633
Exercised	(48	)	30.54		N/A	899
Forfeited	—		—		N/A	13
Options outstanding and exercisable, end of period	36		$	29.54	3.9	$	898