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Long-Term Incentive Plans
12 Months Ended
Feb. 02, 2019
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Long-Term Incentive Plans

G. LONG-TERM INCENTIVE PLANS

The following is a summary of the Company’s long-term incentive plans.  All equity awards granted under these long-term incentive plans were issued from the Company’s stockholder approved 2016 Incentive Compensation Plan. See Note H, “Stock Compensation Plans.”

2-Year Performance Periods

Under the Company’s First Amended and Restated Long Term Incentive Plan (“LTIP”), for fiscal 2016 and fiscal 2017 the Compensation Committee established performance targets which covered a two-year performance period (each a “Performance Period”), thereby creating overlapping Performance Periods.  Each participant in the plan was entitled to receive an award based on that participant’s “Target Cash Value” which is defined as the participant’s annual base salary (on the participant’s effective date) multiplied by his or her LTIP percentage, which was 100% for the Company’s Chief Executive Officer, 70% for senior executives and 25% for other participants in the plan.  Effective October 22, 2018, the LTIP percentage for its vice president managing director level was increased from 25% to 50%. Because of the overlapping two-year Performance Periods, the Target Cash Value for any award was based on one year of annual salary. All awards granted under both the 2016-2017 LTIP and 2017-2018 LTIP were in restricted stock units (RSUs).

Under the 2016-2017 LTIP and 2017-2018 LTIP, 50% of each participant’s Target Cash Value was subject to time-based vesting and 50% was subject to performance-based vesting.  The time-vested portion of the award vests in two installments with 50% of the time-vested portion vesting on April 1 following the fiscal year end which marks the end of the applicable Performance Period and 50% vesting on April 1 the succeeding year. The performance-based vesting was subject to the achievement of the performance target(s) for the applicable Performance Period. Awards for any achievement of performance targets are not granted until the performance targets are achieved and then are subject to additional vesting through August 31 following the end of the applicable Performance Period.  

 

In the first quarter of fiscal 2018, the Compensation Committee of the Board of Directors (the “Compensation Committee”) approved a 27.2% payout of its performance targets for the 2016-2017 LTIP, resulting in awards totaling $0.5 million, with a grant date of April 2, 2018.  On that date, the Company granted 265,749 RSUs, which vested, net of any forfeitures, on August 31, 2018.  In conjunction with the grant of the RSUs, the Company reclassified $0.4 million of the liability accrual from “Accrued expenses and other current liabilities” to “Additional paid-in capital” in the first quarter of fiscal 2018. See the Consolidated Statement of Changes in Stockholders’ Equity.

 

Based on the partial achievements of targets under the 2017-2018 LTIP, subsequent to the end of fiscal 2018, on March 19, 2019, the Compensation Committee approved the grant of RSUs awards totaling $0.5 million. The awards will be subject to further vesting through August 31, 2019.  At February 2, 2019, $0.4 million of this $0.5 million award was accrued. In addition to the performance awards, the Company expects to incur approximately $2.0 million for its time-based awards, which is being expensed over thirty-six months, based on the respective vesting dates.  

 

3-Year Performance Period

 

In June 2018, the Company amended its LTIP by executing the Second Amended and Restated LTIP, as further amended in October 2018 (the “Amended LTIP”), which among other things, extends the performance period for awards to three years, beginning with grants in fiscal 2018. For each participant, 50% of the Target Cash Value is subject to time-based vesting and 50% is subject to performance-based vesting.  The time-vested portion of the award vests in four installments with the first 25% vesting on the later of April 1 following the grant date or one-year from the date of grant.  Each of the remaining three tranches will vest on April 1 of the second, third and fourth anniversaries following the date of grant.  The performance-based vesting is subject to the achievement of the performance target(s) for the applicable Performance Period. Awards for any achievement of performance targets will not be granted until the performance targets are achieved and then will be subject to additional vesting through August 31 following the end of the applicable Performance Period.  

 

On October 24, 2018, the Compensation Committee established performance targets for the 2018-2020 Performance Period under the Amended LTIP (the “2018-2020 LTIP”). Assuming that the Company achieves the performance target at target levels and all time-vested awards vest, the compensation expense associated with the 2018-2020 LTIP is estimated to be approximately $4.1 million.  Approximately half of the compensation expense relates to the time-vested RSUs, which is being expensed straight-line over forty-one months. Through the end of fiscal 2018, the Company has accrued $0.1 million for performance awards under the 2018-2020 LTIP.