Shareholders' Equity (Deficit)

12 Months Ended

Jan. 30, 2016

Equity [Abstract]

Shareholders' Equity (Deficit)

Shareholders’ Equity

As of January 30, 2016, the Company is authorized to issue 120,000,000 shares of $0.01 par value common stock and 5,000,000 shares of $0.01 par value preferred stock. The holders of the common stock are entitled to one vote per share of common stock and are entitled to receive dividends if declared by the board of directors. The preferred stock may be issued from time to time in series as designated by the board of directors. The designations, powers, preferences, voting rights, privileges, options, conversion rights, and other special rights of the shares of each such series and the qualifications, limitations and restrictions thereof shall be designated by the board of directors.

Common Stock

The Company and its shareholders have entered into an Amended and Restated Investor Rights Agreement and a Second

Amended and Restated Shareholders Agreement, which provided for, among others, certain registration, information, first refusal, co-sale, observer, bring along and board of director voting rights. The Second Amended and Restated Shareholders Agreement also provided for certain restrictions and obligations with respect to the stock of the Company held by the Company’s shareholders, including limits on the transfer of stock held by shareholders. The material provisions of the Second Amended and Restated Shareholders Agreement were terminated in connection with the Company’s IPO. In addition, in connection with the IPO, the parties amended the agreement to terminate all rights except for certain registration rights, which requires the Company to register shares of our common stock held by certain shareholders in the event the Company registers for sale, either for the Company’s own account or for the account of others, shares of the Company’s common stock in certain offerings.

In March 2012, options to purchase 2,020,620 shares of common stock granted during fiscal 2010, including options to purchase 1,010,310 shares that were subject to time-based and performance-based vesting, were cancelled and an equal number of restricted shares were granted. One-third of the shares vested in March 2012, one-third of the shares vested in March 2013, and the remaining one-third vested in March 2014, which was the second anniversary of the grant.

In connection with the cancellation and grant, the Company recorded a total compensation expense of $17.4 million including $5.3 million which was recorded on the date of the modification and the remainder was recorded on a straight-line basis over the two-year vesting period.

The Five Below, Inc. 2012 Employee Stock Purchase Plan (the “ESPP”) is intended to be qualified as an “employee stock purchase plan” within the meaning of Section 423 of the Internal Revenue Code of 1986. The number of shares of common stock reserved for issuance, which is subject to other limitations, is 500,000 shares. The ESPP allows eligible employees the opportunity to purchase, subject to limitations, shares of the Company’s common stock through payroll deductions at a discount of 10% of the fair market value of such shares on the purchase date. In fiscal 2015, the Company issued 5,018 shares of common stock under the ESPP resulting in proceeds of approximately $0.2 million and recorded share-based compensation expense of $16.5 thousand in connection with the ESPP related to the amount of the discount. In fiscal 2014, the Company issued 4,345 shares of common stock under the ESPP resulting in proceeds of approximately $0.2 million and recorded share-based compensation expense of $16.4 thousand in connection with the ESPP related to the amount of the discount. In fiscal 2013, the Company issued 3,565 shares of common stock under the ESPP resulting in proceeds of approximately $0.1 million and recorded share-based compensation expense of $13.5 thousand in connection with the ESPP related to the amount of the discount.