Stein Mart 2014 Annual Report Download - page 42

STEIN MART, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in tables in thousands, except per share amounts)
F-18
Employee Stock Purchase Plan
We have an Employee Stock Purchase Plan (the Stock Purchase Plan) whereby all employees who complete six months of employment
and who work on a full-time basis or are regularly scheduled to work more than 20 hours per week are eligible to participate in the Stock
Purchase Plan. Participants in the Stock Purchase Plan may purchase shares of the Companys common stock at 85% of the lower of the
fair market value of the Companys stock determined at either the beginning or the end of each semi-annual option period. Shares eligible
under the Stock Purchase Plan, which is effective for the years 1997 through 2015, are limited to 2.8 million shares in the aggregate, with
no more than 200,000 shares being made available in each calendar year, excluding carryover from previous years. In 2014, 2013 and
2012, the participants acquired 64,839 shares, 82,705 shares and 64,170 shares of common stock at weighted-average per share prices
of $11.72, $8.38 and $5.79, respectively. The fair value of Stock Purchase Plan shares was estimated using the Black-Scholes call option
value method with the following weighted-average assumptions for 2014: expected volatility of 36.2%, expected dividend yield of 1.8%, a
risk-free interest rate of 0.1%, a present-value discount factor of 1.0% and an expected term of six months. Share-based compensation
expense for the Stock Purchase Plan was $0.2 million, $0.2 million and $0.1 million in 2014, 2013 and 2012, respectively.
Omnibus Plan
Our Omnibus Plan provides that shares of common stock may be granted to certain Key Employees, Non-Employee Directors, and
Advisor Participants, as defined, through non-qualified stock options, incentive stock options, stock appreciation rights, performance
awards, restricted stock, or any other award made under the terms of the plan. The Board of Directors, or a committee to which it
delegates authority, determines the exercise price and all other terms of all grants. The shares will be issued from authorized and
unissued shares of our common stock. Expired and forfeited awards become available for re-issuance. Vesting and exercise are
contingent on continued employment.
The following table presents the number of awards authorized and available for grant under the Omnibus Plan at January 31, 2015 (shares
in thousands):
Shares
T
o
t
a
l
awar
d
sau
th
or
i
ze
d
10,500
Awards available for grant 3,749
Stock Options
In accordance with the Omnibus Plan, the exercise price of an option cannot be less than the fair value on the grant date. In general, for
awards granted prior to 2014, one-third of the awards vest on each of the third, fourth and fifth anniversary dates of grant. Awards granted
during 2014 generally vest monthly in equal amounts over a five-year period. The awards expire seven to ten years after the date of grant.
A summary of stock option information for the year ended January 31, 2015 is as follows (shares in thousands):
Weighted- Weighted-Average Aggregate
Number o
f
Average Remaining Intrinsic
Shares Exercise Price Contractual Term Value
Outstanding at February 1, 2014 857 7.20$
Granted 109 12.19
Exercised (44) 7.43
Cancelled or forfeited (45) 13.30
Outstanding at January 31, 2015 877 7.50$ 6.5 years 5,498$
Exercisable stock options at January 31, 2015 545 6.82
$
6.2 years 3,785
$
The aggregate intrinsic value in the table above represents the excess of our closing stock price on January 31, 2015 ($13.76 per share)
over the exercise price, multiplied by the applicable number of in-the-money options. This amount changes based on the fair market value
of our common stock. There were 0.9 million in-the-money options outstanding at January 31, 2015. The total number of in-the-money
options exercisable at January 31, 2015 was 0.5 million.
As of January 31, 2015, there was $0.5 million of unrecognized compensation cost related to stock options which is expected to be
recognized over a weighted-average period of 0.5 years using the mid-point method. The weighted-average grant-date fair value of
options granted was $4.57, $7.39 and $3.93 during 2014, 2013, and 2012, respectively. The total intrinsic value of stock options exercised
was $0.3 million, $2.3 million and $0.1 million during 2014, 2013 and 2012, respectively. The total tax benefit realized from the exercise of
stock options was $0.1 million, $0.5 million and $0 during 2014, 2013 and 2012, respectively.