Stein Mart 2015 Annual Report Download - page 42

STEIN MART, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in tables in thousands, except per share amounts)
F-18
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 30, 2016 (shares
in thousands):
Shares
Total awards authorized 10,500
Awards available for grant 2,832
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
subsequent to 2013 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 30, 2016 is as follows (shares in thousands):
Weighted- Weighted-Av erage Aggregate
Number of Av erage Remaining Intrinsic
Shares Ex ercise Price Contractual Term Value
Outstanding at January 31, 2015 877 7.50$
Granted 25 9.71
Exercised (167) 3.61
Cancelled or forfeited (39) 8.44
Special cash dividend adjustment 378 N/A
Outstanding at January 30, 2016 1,074 5.48$ 4.7 years 2,227$
Exercisable stock options at January 30, 2016 977 5.14$ 4.6 years 2,227$
The aggregate intrinsic value in the table above represents the excess of our closing stock price on January 30, 2016 ($7.36 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 925,932 in-the-money options outstanding and exercisable at January 30, 2016.
As of January 30, 2016, there was $0.2 million of unrecognized compensation cost related to stock options which is expected to be
recognized over a weighted-average period of 1.2 years using the mid-point method. The weighted-average grant-date fair value of
options granted was $2.50, $4.57 and $7.39 during 2015, 2014, and 2013, respectively. The total intrinsic value of stock options exercised
was $0.9 million, $0.3 million and $2.3 million during 2015, 2014 and 2013, respectively. The total tax benefit realized from the exercise of
stock options was $0.2 million, $0.1 million and $0.5 during 2015, 2014 and 2013, respectively.
The fair value of each stock option granted during 2015, 2014 and 2013 was estimated at the date of grant using the Black-Scholes
options pricing model with the following weighted-average assumptions:
2015 2014 2013
Expected term 4.9 years 4.4-5.3 years 5.2 years
Risk-free interest rate 1.3% 1.5% to 1.8% 1.8%
Volatility 38.5% 43.6%-52.9% 64.4%
Dividend yield 3.1% 2.2%-2.5% 1.4%
The expected volatility is based on the historical volatility of our stock price over assumed expected terms. The risk-free interest rate is
estimated from yields of U.S. Treasury instruments of varying maturities with terms consistent with the expected terms of the options. The
expected term of an option is calculated from a lattice model using historical employee exercise data.