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Share-Based Compensation

3 Months Ended

May 01, 2021

Note 12 Share-Based Compensation

The Company recognized share-based compensation expense of $2.4 million for both the thirteen weeks ended May 1, 2021 and May 2, 2020.

The Company had net issuances of 327,268 and 414,121 shares of common stock during the thirteen weeks ended May 1, 2021 and May 2, 2020, respectively, for restricted stock grants, stock performance awards issued to employees and common and restricted stock grants issued to non-employee directors, net of forfeitures and shares withheld to satisfy the tax withholding requirement.

Restricted Stock

The following table summarizes restricted stock activity for the periods ended May 1, 2021 and May 2, 2020:

Thirteen Weeks Ended

May 1, 2021

May 2, 2020

Weighted-

Total Number

Average

Total Number

Average

of Restricted

Grant Date

of Restricted

Grant Date

Fair Value

January 30, 2021

1,397,227

16.74

February 1, 2020

1,271,795

26.77

Granted

562,506

18.63

Granted

550,683

5.81

Forfeited

(46,500)

16.08

Forfeited

(32,687)

25.60

Vested

(484,389)

26.96

Vested

(368,048)

28.38

May 1, 2021

1,428,844

14.04

May 2, 2020

1,421,743

18.20

Of the 562,506 restricted shares granted during the thirteen weeks ended May 1, 2021, 20,000 shares have a cliff-vesting term of two years and 542,506 shares have a graded-vesting term of three years, with 50% vesting after two years and 50% after three years. All of the restricted shares granted during the thirteen weeks ended May 2, 2020 have a graded-vesting term of three years, with 50% vesting after two years and 50% after three years. Share-based compensation expense for graded-vesting grants is recognized ratably over the respective vesting periods.

Performance Share Awards

During the thirteen weeks ended May 1, 2021, the Company granted performance share awards for a targeted 175,500 shares, with a weighted-average grant date fair value of $18.63 in connection with the 2020 performance award. There were no performance-based share awards granted by the Company during the thirteen weeks ended May 2, 2020. Vesting of performance-based awards is generally dependent upon the financial performance of the Company and the attainment of certain financial goals during the three-year period following the grant. At the end of the vesting period, the employee will have earned an amount of shares or units between 0% and 200% of the targeted award, depending on the achievement of the specified financial goals for the service period. Compensation expense is recognized based on the fair value of the award and the anticipated number of shares or units to be awarded for each tranche in accordance with the vesting schedule of the units over the three-year service period.

During the thirteen weeks ended May 1, 2021, the Company granted long-term incentive awards payable in cash for the 2021-2023 performance period, with a target value of $6.5 million and a maximum value of $13.0 million. These awards, which vest after a three-year period, are dependent upon the attainment of certain financial goals of the Company for each of the three years and individual achievement of strategic initiatives over the cumulative period of the award. The estimated value of the award, which is reflected within other liabilities on the condensed consolidated balance sheets, is being accrued over the three-year performance period.

Restricted Stock Units for Non-Employee Directors

Equity-based grants may be made to non-employee directors in the form of restricted stock units ("RSUs") payable in cash or common stock at no cost to the non-employee director. The RSUs earn dividend equivalents at the same rate as dividends on the Company’s common stock. The dividend equivalents, which vest immediately, are automatically re-invested in additional RSUs. Expense related to the initial grant of RSUs is recognized ratably over the vesting period based upon the fair value of the RSUs. The RSUs payable in cash are remeasured at the end of each period. Expense for the dividend equivalents is recognized at fair value when the dividend equivalents are granted. The Company granted 1,712 and 8,309 to non-employee directors for dividend equivalents, during the thirteen weeks ended May 1, 2021 and May 2, 2020, respectively, with weighted-average grant date fair values of $20.91 and $3.86, respectively.