Stock-Based Awards

12 Months Ended

Jan. 25, 2020

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

We have outstanding stock-based awards under our 2003 Long-Term Incentive Plan, 2007 Non-Employee Directors Equity Plan, 2012 Long-Term Incentive Plan, and 2017 Non-Employee Directors Equity Plan (collectively, the “Plans”). No further awards will be granted under the 2003 Long-Term Incentive Plan or 2007 Non-Employee Directors Equity Plan. As of January 25, 2020, the total number of shares available for grant under the Plans was 1,259,615.

Stock-based compensation expense and the related tax benefit recognized during fiscal 2020, fiscal 2019, the 2018 transition period, and fiscal 2017 were as follows (dollars in thousands):



	Fiscal Year Ended				Six Months Ended		Fiscal Year Ended
	January 25, 2020		January 26, 2019		January 27, 2018		July 29, 2017
Stock-based compensation	$	10,034	$	20,187	$	13,277	$	20,805
Income tax effect of stock-based compensation	$	2,482	$	5,043	$	4,793	$	7,996

In addition, we realized approximately $1.0 million of net tax deficiencies during fiscal 2020, and $0.2 million, $7.8 million, and $8.4 million of excess tax benefits, net of tax deficiencies, during fiscal 2019, the 2018 transition period, and fiscal 2017, respectively, related to the vesting and exercise of share-based awards.

As of January 25, 2020, we had unrecognized compensation expense related to stock options, RSUs, and target Performance RSUs (based on the Company’s expected achievement of performance measures) of $2.0 million, $8.6 million, and $4.5 million, respectively. This expense will be recognized over a weighted-average number of years of 2.2, 2.3, and 1.7, respectively, based on the average remaining service periods for the awards. As of January 25, 2020, we may recognize an additional $20.3 million in compensation expense in future periods if the maximum number of Performance RSUs is earned based on certain performance measures being met.

The following table summarizes the valuation of stock options and restricted share units granted during fiscal 2020, fiscal 2019, the 2018 transition period, and fiscal 2017 and the significant valuation assumptions:



	Fiscal Year Ended						Six Months Ended			Fiscal Year Ended
	January 25, 2020			January 26, 2019			January 27, 2018			July 29, 2017
Weighted average fair value of RSUs granted	$	48.37		$	97.90		$	87.34		$	79.04
Weighted average fair value of Performance RSUs granted	$	45.94		$	106.19		$	84.13		$	79.29
Weighted average fair value of stock options granted	$	24.72		$	48.19		$	42.60		$	39.90
Stock option assumptions:
Risk-free interest rate	2.3		%	2.7		%	2.3		%	2.3		%
Expected life (in years)	8.4			6.3			7.6			7.6
Expected volatility	45.3		%	43.3		%	43.4		%	44.7		%
Expected dividends	—			—			—			—

Stock Options

The following table summarizes stock option award activity during fiscal 2020:



	Stock Options
	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (In years)	Aggregate Intrinsic Value (In thousands)
Outstanding as of January 26, 2019	583,291		$	34.24
Granted	39,276		$	45.94
Options exercised	(45,258	)	$	11.11
Canceled	—		$	—
Outstanding as of January 25, 2020	577,309		$	36.85	4.1	$	9,485

Exercisable options as of January 25, 2020	497,739		$	31.44	3.4	$	9,485

The total amount of exercisable options as of January 25, 2020 presented above reflects the approximate amount of options expected to vest. The aggregate intrinsic values presented above represent the total pre-tax intrinsic values (the difference between the Company’s closing stock price of $44.51 on the last trading day of fiscal 2020 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on the last trading day of fiscal 2020. The amount of aggregate intrinsic value will change based on the price of the Company’s common stock. The total intrinsic value of stock options exercised was $1.8 million, $5.7 million, $4.5 million, and $7.8 million for fiscal 2020, fiscal 2019, the 2018 transition period, and fiscal 2017, respectively. We received cash from the exercise of stock options of $0.5 million, $0.9 million, $0.7 million, and $1.4 million during fiscal 2020, fiscal 2019, the 2018 transition period, and fiscal 2017, respectively.

RSUs and Performance RSUs

The following table summarizes RSU and Performance RSU award activity during fiscal 2020:



	Restricted Stock
	RSUs				Performance RSUs
	Share Units		Weighted Average Grant Price		Share Units		Weighted Average Grant Price
Outstanding as of January 26, 2019	126,470		$	87.92	377,354		$	96.51
Granted	117,492		$	48.37	475,629		$	45.94
Share units vested	(66,485	)	$	79.06	(75,404	)	$	88.24
Forfeited or canceled	(2,560	)	$	65.55	(137,841	)	$	83.94
Outstanding as of January 25, 2020	174,917		$	65.05	639,738		$	62.60

The total number of granted Performance RSUs presented above consists of 333,567 target shares and 142,062 supplemental shares. During fiscal 2020, we canceled 70,445 target shares and 46,424 supplemental shares of Performance RSUs, as a result of performance criteria for attaining those shares being partially met for the applicable performance periods. Approximately 143,456 target shares and 65,370 supplemental shares outstanding as of January 25, 2020 will be canceled during the three months ending April 25, 2020 as a result of the fiscal 2020 performance period criteria being partially met. The total amount of Performance RSUs outstanding as of January 25, 2020 consists of 450,588 target shares and 189,150 supplemental shares.

The total fair value of restricted share units vested during fiscal 2020, fiscal 2019, the 2018 transition period, and fiscal 2017 was $6.7 million, $15.3 million, $37.7 million, and $33.2 million, respectively.