Employee Benefit Plans (Notes)

12 Months Ended

Jan. 31, 2020

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

NOTE 10 — EMPLOYEE BENEFIT PLANS

Overview of Equity Incentive Plans

The 2018 Equity Incentive Plan was approved by the Company’s shareholders in June 2018 and includes 2.0 million shares available for grant, of which approximately 1.7 million shares remain available for future grant at January 31, 2020. The Company is authorized to award officers, employees and non-employee members of the Board of Directors restricted stock, options to purchase common stock, stock appreciation rights and performance awards that are dependent upon achievement of specified performance goals. Equity-based compensation awards are used by the Company to attract talent and as a retention mechanism for the award recipients and have a maximum term of ten years, unless a shorter period was specified by the Compensation Committee of the Company’s Board of Directors (“Compensation Committee”) or is required under local law. Awards under the plan are priced as determined by the Compensation Committee and are required to be priced at, or above, the fair market value of the Company’s common stock on the date of grant. Awards generally vest between one year and three years from the date of grant. The Company’s policy is to utilize shares of its treasury stock, to the extent available, to satisfy its obligation to issue shares upon the exercise of awards.

For the fiscal years ended January 31, 2020, 2019 and 2018, the Company recorded $32.2 million, $31.5 million and $29.4 million, respectively, of stock-based compensation expense, and related income tax benefits of $7.6 million, $7.4 million and $9.6 million, respectively. The actual benefit received from the tax deduction from the exercise of equity-based incentives was $7.0 million, $5.4 million and $5.9 million for the fiscal years ended January 31, 2020, 2019 and 2018, respectively.

Restricted Stock

The Company’s restricted stock awards are primarily in the form of restricted stock units (“RSUs”) and typically vest in annual installments lasting between one year and three years from the date of grant, unless a different vesting schedule is mandated by country law. All of the RSUs have a fair market value equal to the closing price of the Company’s common stock on the date of grant. Stock-based compensation expense includes $23.4 million, $25.4 million and $25.8 million related to RSUs during fiscal 2020, 2019 and 2018, respectively.

A summary of the Company’s RSU activity for the fiscal year ended January 31, 2020 is as follows:



	Shares		Weighted-average grant date fair value
Nonvested at January 31, 2019	649,122		$	85.71
Granted	228,528		102.43
Vested	(266,405	)	85.89
Canceled	(36,265	)	92.70
Nonvested at January 31, 2020	574,980		91.84

The total fair value of RSUs which vested during the fiscal years ended January 31, 2020, 2019 and 2018 is $22.9 million, $21.1 million and $12.7 million, respectively. The weighted-average fair value of the 280,352 RSUs granted during the fiscal year ended January 31, 2019 was $85.50 per share. The weighted-average fair value of the 454,480 RSUs granted during the fiscal year ended January 31, 2018 was $92.08 per share. As of January 31, 2020, the unrecognized stock-based compensation expense related to non-vested RSUs was $19.6 million, which the Company expects to be recognized over a remaining weighted average period of 1.6 years.

Pursuant to the terms of the Merger Agreement with the affiliates of Apollo Funds, upon closing of the Merger all nonvested RSU’s will vest and be cancelled and converted into the right to receive an amount of $145 per share in cash.

Performance based restricted stock units

The Company's performance based restricted stock unit awards ("PRSUs") are subject to vesting conditions, including meeting specified cumulative performance objectives over a period of 3 years. Each performance based award recipient could vest in 0% to 150% of the target shares granted contingent on the achievement of the Company's financial performance metrics. Stock-based compensation expense includes $8.5 million, $5.8 million and $3.3 million related to PRSUs during fiscal 2020, 2019 and 2018, respectively.

A summary of the Company’s PRSU activity, assuming maximum achievement for nonvested awards, for the year ended January 31, 2020 is as follows:



	Shares		Weighted-average grant date fair value
Nonvested at January 31, 2019	293,216		$	85.84
Granted	108,771		103.15
Vested	(16,996	)	78.42
Canceled	(21,428	)	89.68
Nonvested at January 31, 2020	363,563		91.14

As of January 31, 2020, the unrecognized stock-based compensation expense related to non-vested PRSUs, based on estimated achievement, was $9.4 million, which the Company expects to be recognized over a remaining weighted average period of 1.6 years. The total fair value of PRSUs which vested during the fiscal year ended January 31, 2020 is $1.3 million. No PRSUs vested during the fiscal years ended January 31, 2019 or 2018. The weighted-average fair value of the 153,719 PRSUs granted during the fiscal year ended January 31, 2019 was $82.13 per share. The weighted-average fair value of the 159,148 PRSUs granted during the fiscal year ended January 31, 2018 was $90.95 per share.

Pursuant to the terms of the Merger Agreement with the affiliates of Apollo Funds, upon closing of the Merger nonvested PRSU’s will be cancelled and converted into the right to receive an amount of $145 per share in cash determined as follows: (i) for PRSU’s granted during fiscal 2018 and 2020, the number of shares shall equal 110% of the target shares granted and (ii) for PRSU’s granted during fiscal 2019, the number of shares shall equal 130% of the target shares granted.

Employee Stock Purchase Plan

Under the 1995 Employee Stock Purchase Plan (the “ESPP”), the Company was authorized to issue up to 1.0 million shares of common stock to eligible employees in the Company’s U.S. and Canadian subsidiaries. Under the terms of the ESPP, employees could choose to have a fixed dollar amount or percentage deducted from their bi-weekly compensation to purchase the Company’s common stock and/or elect to purchase shares once per calendar quarter. The purchase price of the stock was 85% of the market value on the purchase date and employees were limited to a maximum purchase of $25,000 in fair market value each calendar year. Subject to the Merger Agreement, the ESPP was suspended in November 2019. From the inception through suspension of the program, the Company issued 575,174 shares of common stock to the ESPP. Stock-based compensation expense related to the ESPP was insignificant during fiscal 2020, 2019 and 2018.

Retirement Savings Plan

The Company sponsors the Tech Data Corporation 401(k) Savings Plan (the “401(k) Savings Plan”) for its U.S. employees. At the Company’s discretion, participant deferrals are matched in cash, in an amount equal to 50% of the first 6% of participant deferrals and participants are fully vested following four years of qualified service. Aggregate contributions made by the Company to the 401(k) Savings Plan were $7.1 million, $6.7 million and $6.4 million for fiscal 2020, 2019 and 2018, respectively.