Stock-Based Compensation

9 Months Ended

Oct. 29, 2016

Share-based Compensation [Abstract]

Stock-Based Compensation

Note 5 - Stock-Based Compensation

Stock-based compensation includes stock options, cash-settled stock appreciation rights (SARs) and restricted stock awards. Additionally, we recognize stock-based compensation expense for the discount on shares sold to employees through our employee stock purchase plan. For the thirteen and thirty-nine weeks ended October 29, 2016, stock-based compensation expense for the employee stock purchase plan was $9,000 before the income tax benefit of $3,000 and $33,000 before the income tax benefit of $12,000, respectively. For the thirteen and thirty-nine weeks ended October 31, 2015, stock-based compensation expense for the employee stock purchase plan was $9,000 before the income tax benefit of $3,000 and $32,000 before the income tax benefit of $12,000, respectively.

The following section summarizes the share transactions for our restricted stock awards:

	Number of Shares			Weighted- Average Grant Date Fair Value
Restricted stock at January 30, 2016		829,492		$	22.13
Granted		225,003			24.98
Vested		(33,297	)		25.66
Forfeited		(34,980	)		21.55
Restricted stock at October 29, 2016		986,218		$	22.68

The weighted-average grant date fair value of stock awards granted during the thirty-nine week periods ended October 29, 2016 and October 31, 2015 was $24.98 and $24.43, respectively. The total fair value at grant date of previously non-vested stock awards that vested during the first nine months of fiscal 2016 was $854,000. The total fair value at grant date of previously non-vested stock awards that vested during the first nine months of fiscal 2015 was $106,000.

The following section summarizes information regarding stock-based compensation expense recognized for restricted stock awards:

(In thousands)	Thirteen Weeks Ended October 29, 2016		Thirteen Weeks Ended October 31, 2015		Thirty-Nine Weeks Ended October 29, 2016		Thirty-Nine Weeks Ended October 31, 2015
Stock-based compensation expense before the recognized income tax benefit	$	1,295	$	810	$	3,197	$	2,344
Income tax benefit	$	482	$	308	$	1,208	$	902

As of October 29, 2016, approximately $8.7 million of unrecognized compensation expense remained related to both our performance-based and service-based restricted stock awards. The cost is expected to be recognized over a weighted average period of approximately 2.0 years. This incorporates our current assumptions with respect to the estimated requisite service period required to achieve the designated performance conditions for performance-based stock awards.

The following table summarizes the SARs activity:

	Number of Shares			Weighted- Average Exercise Price	Weighted- Average Remaining Contractual Term (Years)
Outstanding at January 30, 2016	147,550		$	24.26
Forfeited	(6,500	)		24.26
Exercised	(22,375	)		24.26
Outstanding at October 29, 2016	118,675		$	24.26	3.4
Exercisable at October 29, 2016	25,557		$	24.26	3.4

SARs were granted during the first quarter of fiscal 2015 to certain non-executive employees, such that one-third of the shares underlying the SARs will vest and become fully exercisable on each of the first three anniversaries of the date of the grant and were assigned a five-year term from the date of grant, after which any unexercised SARs will expire. Each SAR entitles the holder, upon exercise of their vested shares, to receive cash in an amount equal to the closing price of our stock on the date of exercise less the exercise price, with a maximum amount of gain defined. The SARs granted during the first quarter of fiscal 2015 were issued with a defined maximum gain of $10.00 over the exercise price of $24.26.

The fair value of these liability awards are remeasured, using a trinomial lattice model, at each reporting period until the date of settlement. Increases or decreases in stock-based compensation expense are recognized over the vesting period, or immediately for vested awards. The weighted-average fair value of outstanding, non-vested SAR awards as of October 29, 2016 and October 31, 2015 was $4.53 and $3.70, respectively.

The fair value was estimated using a trinomial lattice model with the following assumptions:

	October 29, 2016			October 31, 2015
Risk free interest rate yield curve		0.18% - 1.33	%		0.01% - 1.52	%
Expected dividend yield		1.1	%		1.0	%
Expected volatility		35.06	%		35.34	%
Maximum life		3.4 Years			4.4 Years
Exercise multiple		1.34			1.34
Maximum payout	$	10.00		$	10.00
Employee exit rate		2.2% - 9.0	%		2.2% - 9.0	%

The risk free interest rate was based on the U.S. Treasury yield curve in effect at the end of the reporting period. The expected dividend yield was based on our historical quarterly cash dividends, with the assumption that quarterly dividends would continue at that rate. Expected volatility was based on the historical volatility of our stock. The exercise multiple and employee exit rate were based on historical option data.

The following table summarizes information regarding stock-based compensation expense recognized for SARs:

(In thousands)	Thirteen Weeks Ended October 29, 2016		Thirteen Weeks Ended October 31, 2015		Thirty-Nine Weeks Ended October 29, 2016		Thirty-Nine Weeks Ended October 31, 2015
Stock-based compensation expense before the recognized income tax benefit	$	12	$	24	$	208	$	219
Income tax benefit	$	4	$	9	$	79	$	84

As of October 29, 2016, approximately $155,000 in unrecognized compensation expense remained related to non-vested SARs. This expense is expected to be recognized over a weighted-average period of approximately 0.9 years.