Share-Based Plans

9 Months Ended

Oct. 31, 2020

Share-based Payment Arrangement [Abstract]

We have issued nonqualified stock options, restricted stock units, and performance share units under our shareholder-approved equity compensation plans. At October 31, 2020, the number of nonqualified stock options outstanding was immaterial. Our restricted stock units and performance share units, as described below, are expensed and reported as non-vested shares. We recognized share-based compensation expense of $10.9 million and $3.2 million in the third quarter of 2020 and the third quarter of 2019, respectively, and $18.3 million and $11.7 million for the year-to-date 2020 and the year-to-date 2019, respectively.

Non-vested Restricted Stock Units

The following table summarizes the non-vested restricted stock units activity for the year-to-date 2020:


	Number of Shares	Weighted Average Grant-Date Fair Value Per Share
Outstanding non-vested restricted stock units at February 1, 2020	648,510	$	38.52
Granted	921,309	15.82
Vested	(239,856)	43.07
Forfeited	(1,511)	38.06
Outstanding non-vested restricted stock units at May 2, 2020	1,328,452	$	21.95
Granted	74,244	33.20
Vested	(24,498)	27.99
Forfeited	(41,074)	25.26
Outstanding non-vested restricted stock units at August 1, 2020	1,337,124	$	22.35
Granted	33,868	49.83
Vested	(33,628)	37.45
Forfeited	(108,120)	21.93
Outstanding non-vested restricted stock units at October 31, 2020	1,229,244	$	22.68

The non-vested restricted stock units granted in the year-to-date 2020 generally vest and are expensed on a ratable basis over three years from the grant date of the award, if a threshold financial performance objective is achieved and the grantee remains employed by us through the vesting dates.

Non-vested Restricted Stock Units Granted to Non-Employee Directors

In the second quarter of 2020, 44,229 common shares underlying the restricted stock units granted in 2019 to the non-employee members of our Board vested on the trading day immediately preceding our 2020 Annual Meeting of Shareholders (“2020 Annual Meeting”). These units were part of the annual compensation of the non-employee directors of the Board. Additionally, in the second quarter of 2020, the chairman of our Board received an annual restricted stock unit grant having a grant date fair value of approximately $210,000. The remaining non-employees elected to our Board at our 2020 Annual Meeting each received an annual restricted stock unit grant having a grant date fair value of approximately $145,000. The 2020 restricted stock units will vest on the earlier of (1) the trading day immediately preceding our 2021 Annual Meeting of Shareholders, or (2) the non-employee director’s death or disability. However, the non-employee directors will forfeit their restricted stock units if their service on the Board terminates before either vesting event occurs.

Performance Share Units

In 2020, we awarded performance share units with a restriction feature to certain members of senior management, which vest based on the achievement of share price performance goals and a minimum service requirement of one year (“RPSUs”). The RPSUs have a contractual term of three years. We use a Monte Carlo simulation to estimate the fair value of the RPSUs on the grant date and recognize expense over the derived service period. If the share price performance goals applicable to the RPSUs are not achieved prior to expiration, the unvested portion of the awards will be forfeited. Shares issued in connection with vested RPSUs are generally restricted from sale, transfer, or other disposition prior to the third anniversary of the grant date except under certain circumstances, including death, disability, or change in control.

Prior to 2020, we awarded performance share units (“PSUs”) to certain members of management, which will vest if certain financial performance objectives are achieved over a three-year performance period and the grantee remains employed by us during the performance period. Typically, the financial performance objectives for each fiscal year within the three-year performance period will be approved by the Compensation Committee of our Board of Directors during the first quarter of the respective fiscal year. In 2020, due to the lack of business visibility resulting from the COVID-19 pandemic, the Compensation Committee chose to defer the establishment of the 2020 performance objectives until the third quarter of 2020.

As a result of the process used to establish the financial performance objectives, we will only meet the requirements for establishing a grant date for the PSUs when we communicate the financial performance objectives for the third fiscal year of the award to the award recipients, which will then trigger the service inception date, the fair value of the awards, and the associated expense recognition period. If we meet the applicable threshold financial performance objectives over the three-year performance period and the grantee remains employed by us through the end of the performance period, the PSUs will vest on the first trading day after we file our Annual Report on Form 10-K for the last fiscal year in the performance period.

In the third quarter of 2020, the Compensation Committee established the financial performance objectives for the third fiscal year of PSUs issued in 2018; therefore, the 2018 PSUs were deemed granted in August 2020.

We have begun or expect to begin recognizing expense related to PSUs and RPSUs as follows:

Issue Year

Outstanding PSUs and RPSUs at October 31, 2020

Actual Grant Date

Expected Valuation (Grant) Date

Actual or Expected Expense Period

2018

136,199

August 2020

Fiscal 2020

2019

266,118

March 2021

Fiscal 2021

2020

339,568

April 2020

Fiscal 2020 - 2021

Total

741,885

The number of shares to be distributed upon vesting of the PSUs depends on the average performance attained during the three-year performance period compared to the performance targets established by the Compensation Committee, and may result in the distribution of an amount of shares that is greater or less than the number of PSUs granted, as defined in the related award agreement. We recognized $7.8 million and $0.2 million in the third quarter of 2020 and 2019, respectively, and $9.4 million and $2.5 million in the year-to-date 2020 and 2019 respectively, of share-based compensation expense related to PSUs.

The following table summarizes the activity related to PSUs and RPSUs for the year-to-date 2020:


	Number of Units	Weighted Average Grant-Date Fair Value Per Share
Outstanding PSUs and RPSUs at February 1, 2020	181,922	$	31.89
Granted	408,340	11.70
Vested	(181,062)	31.89
Forfeited	(860)	31.89
Outstanding PSUs and RPSUs at May 2, 2020	408,340	$	11.70
Granted	4,682	29.44
Vested	—	—
Forfeited	(12,450)	11.70
Outstanding PSUs and RPSUs at August 1, 2020	400,572	$	11.90
Granted	167,263	55.71
Vested	—	—
Forfeited	(92,068)	26.81
Outstanding PSUs and RPSUs at October 31, 2020	475,767	$	24.42

The following activity occurred under our share-based plans during the respective periods shown:


	Third Quarter				Year-to-Date
(In thousands)	2020		2019		2020		2019
Total intrinsic value of stock options exercised	$	4	$	—	$	16	$	42
Total fair value of restricted stock vested	1,694		1,051		6,584		6,434
Total fair value of performance shares vested	$	—	$	143	$	924	$	9,849

The total unearned compensation cost related to all share-based awards outstanding, excluding PSUs issued in 2018 and 2019, at October 31, 2020 was approximately $25.0 million. This compensation cost is expected to be recognized through September 2023 based on existing vesting terms with the weighted-average remaining expense recognition period being approximately 1.7 years from October 31, 2020.