Shareholders' Equity and Equity Compensation

12 Months Ended

Jan. 30, 2021

Shareholders' Equity and Equity Compensation

Shareholders' Equity and Equity Compensation

Note 8. Shareholders’ Equity and Equity Compensation

Common Stock

We had 60 million shares of $1.00 par value per share common stock authorized for issuance as of January 30, 2021 and February 1, 2020. We had 17 million shares of common stock issued and outstanding as of January 30, 2021 and February 1, 2020. During the First Quarter of Fiscal 2020, we repurchased 0.3 million shares of our common stock under an open market stock repurchase program (Rule 10b5-1 plan).

Long-Term Stock Incentive Plan and Equity Compensation Expense

As of January 30, 2021, less than 1 million shares were available for issuance under our Long-Term Stock Incentive Plan (the "Long-Term Stock Incentive Plan"). The Long-Term Stock Incentive Plan allows us to grant equity-based awards to employees and non-employee directors in the form of stock options, stock appreciation rights, restricted shares and/or restricted share units. No additional shares are available under any predecessor plans.

Restricted share awards granted to officers and other key employees generally vest three or four years from the date of grant if (1) the performance or market threshold, if any, was met and (2) the employee is still employed by us on the vesting date. At the time that restricted shares are issued, the shareholder is generally, subject to the terms of the respective agreement, entitled to the same dividend and voting rights as other holders of our common stock as long as the restricted shares are outstanding. The employee generally is restricted from transferring or selling any restricted shares or restricted share units and generally forfeits the awards upon the termination of employment prior to the end of the vesting period. The specific provisions of the awards, including exercisability and term of the award, are evidenced by agreements with the employee as determined by the compensation committee of our Board of Directors. Restricted share units pursuant to performance-based awards and market-based awards are not issued until approved by our compensation committee following completion of the specified performance period.

The table below summarizes the restricted share award activity for officers and other key employees (in shares) during Fiscal 2020, Fiscal 2019, and Fiscal 2018:

	Fiscal 2020			Fiscal 2019			Fiscal 2018
		Weighted-			Weighted-			Weighted-
		average			average			average
	Number of	grant date		Number of	grant date		Number of	grant date
	Shares	fair value		Shares	fair value		Shares	fair value
Restricted shares outstanding at beginning of fiscal year	251,924	$	68	257,890	$	66	211,045	$	63
Service-based restricted shares granted/issued	131,425	$	40	42,573	$	76	49,726	$	79
Performance-based restricted shares issued related to prior year performance awards	42,438	$	76	43,152	$	79	72,427	$	57
Restricted shares vested, including restricted shares repurchased from employees for employees’ tax liability	(114,003)	$	56	(87,252)	$	71	(73,408)	$	58
Restricted shares forfeited	(3,415)		62	(4,439)		69	(1,900)		62
Restricted shares outstanding at end of fiscal year	308,369	$	61	251,924	$	68	257,890	$	66

Additionally, during the Second Quarter of Fiscal 2020, we granted 0.1 million restricted share units at target subject to (1) our achievement of specified total shareholder return (“TSR”) ranking by Oxford relative to a comparator group for the three year period ending in July 2023 and (2) the recipient remaining an employee through July 2023. The ultimate number of shares earned will be between 0% and 200% of the restricted share units at target. These TSR-based restricted share units are entitled to dividend equivalents for dividends declared on our common stock during the performance period, which are payable after vesting of the restricted shares, for the number of shares ultimately earned. These TSR-based restricted share units do not have any voting rights during the performance period. These TSR-based restricted performance units are not included in the table above.

The following table summarizes information about unvested restricted share awards as of January 30, 2021. The unvested restricted share awards will be settled in shares of our common stock on the vesting date, subject to the employee still being an employee at that time. All awards are subject to the employee remaining employed with us through the vesting date, and the TSR-based restricted share units are subject to us meeting the specified TSR relative to the comparator group

	Number of	Average
	Unvested	Fair Value
	Share/Unit	on
Description	Awards	Date of Grant
Service-based & Performance-based Restricted Shares Vesting in April 2021	82,513	$	77
Service-based & Performance-based Restricted Shares Vesting in April 2022	95,861	$	77
Service-based Restricted Shares Vesting in July 2023	129,995	$	40
Total Restricted Shares Outstanding	308,369		61
TSR-based Restricted Share Units (at target), with a July 2023 vesting date	83,345		50
Total	391,714	$	59

As of January 30, 2021, there was $11 million of unrecognized compensation expense related to the unvested restricted shares and restricted share units included in the table above, which have been granted to employees but have not yet vested. As of January 30, 2021, the weighted average remaining life of the outstanding awards was two years.

In addition, we grant restricted shares to our non-employee directors for a portion of each non-employee director’s annual compensation. The non-employee directors must complete certain service requirements; otherwise, the restricted shares are subject to forfeiture. On the date of issuance, the non-employee directors are entitled to the same dividend and voting rights as other holders of our common stock. The non-employee directors are restricted from transferring or selling the restricted shares prior to the end of the vesting period.

Employee Stock Purchase Plan

There were less than 1 million shares of our common stock authorized for issuance under our Employee Stock Purchase Plan ("ESPP") as of January 30, 2021. The ESPP allows qualified employees to purchase shares of our common stock on a quarterly basis, based on certain limitations, through payroll deductions. The shares purchased pursuant to the ESPP are not subject to any vesting or other restrictions. On the last day of each calendar quarter, the accumulated payroll deductions are applied toward the purchase of our common stock at a price equal to 85% of the closing market price on that date. Equity compensation expense related to the employee stock purchase plan recognized was less than $1 million in each of Fiscal 2020, Fiscal 2019 and Fiscal 2018.

Preferred Stock

We had 30 million shares of $1.00 par value preferred stock authorized for issuance as of January 30, 2021 and February 1, 2020. No preferred shares were issued or outstanding as of January 30, 2021 or February 1, 2020.