Overview: We have various share-based compensation programs, which provide for equity awards including stock options, restricted stock shares, restricted stock units and deferred compensation. These equity awards fall under several plans and are described in detail in our Annual Report on Form 10-K for the year ended November 30, 2013. Starting in 2014 we will no longer grant restricted stock shares.

Grant-Date Fair Value: We use the Black-Scholes option-pricing model to calculate the grant-date fair value of an award. The fair value of options granted during the 13 weeks ended March 1, 2014 and March 2, 2013 were calculated using the following weighted average assumptions:

	13 Weeks Ended
	March 1, 2014	March 2, 2013
Expected life (in years)	4.75	4.75
Weighted-average expected volatility	34.20%	48.02%
Expected volatility	34.17% - 37.06%	48.02%
Risk-free interest rate	1.51%	0.73%
Expected dividend yield	0.82%	0.86%
Weighted-average fair value of grants	$14.23	$15.12

Expected life – We use historical employee exercise and option expiration data to estimate the expected life assumption for the Black-Scholes grant-date valuation. We believe that this historical data is currently the best estimate of the expected term of a new option. We use a weighted-average expected life for all awards.

Expected volatility – Volatility is calculated using our historical volatility for the same period of time as the expected life. We have no reason to believe that our future volatility will differ materially from the past.

Risk-free interest rate – The rate is based on the U.S. Treasury yield curve in effect at the time of the grant for the same period of time as the expected life.

Expected dividend yield – The calculation is based on the total expected annual dividend payout divided by the average stock price.

Expense Recognition: We use the straight-line attribution method to recognize share-based compensation expense for option awards with graded vesting and restricted stock share and restricted stock units with graded and cliff vesting. The amount of share-based compensation expense recognized during a period is based on the value of the portion of the awards that are ultimately expected to vest.

Total share-based compensation expense of $3,985 and $3,320 was included in our Condensed Consolidated Statements of Income for the 13 weeks ended March 1, 2014 and March 2, 2013, respectively. All share-based compensation expense was recorded as selling, general and administrative expense. For the 13 weeks ended March 1, 2014 and March 2, 2013 there was $1,613 and $1,804 of excess tax benefit recognized, respectively.

As of March 1, 2014, there was $11,142 of unrecognized compensation costs related to unvested stock option awards, which is expected to be recognized over a weighted-average period of 2.1 years. Unrecognized compensation costs related to unvested restricted stock shares was $6,049 and unvested restricted stock units was $6,835, both of which are expected to be recognized over a weighted-average period of 1.9 years.

A summary of option activity as of March 1, 2014 and changes during the 13 weeks then ended is presented below:

			Weighted-
			Average
	Options		Exercise Price
Outstanding at November 30, 2013	2,429,961	$	25.74
Granted	407,145		48.93
Exercised	(94,475)		21.23
Forfeited or cancelled	(13,628)		33.74
Outstanding at March 1, 2014	2,729,003	$	29.32

The total fair values of options granted during the 13 weeks ended March 1, 2014 and March 2, 2013 were $5,793 and $6,546, respectively. Total intrinsic values of options exercised during the 13 weeks ended March 1, 2014 and March 2, 2013 were $2,673 and $4,200, respectively. Intrinsic value is the difference between our closing stock price on the respective trading day and the exercise price, multiplied by the number of options exercised. Proceeds received from option exercises during the 13 weeks ended March 1, 2014 and March 2, 2013 were $2,005 and $3,774, respectively.

A summary of nonvested restricted stock as of March 1, 2014 and changes during the 13 weeks then ended is presented below:

						Weighted-
					Weighted-	Average
					Average	Remaining
					Grant	Contractual
					Date Fair	Life
	Units	Shares	Total		Value	(in Years)
Nonvested at November 30, 2013	135,231	312,445	447,676	$	33.76	1.2
Granted	120,094	-	120,094		48.94	1.9
Vested	(65,671)	(106,036)	(171,707)		48.28	-
Forfeited	(335)	(4,594)	(4,929)		35.17	1.5
Nonvested at March 1, 2014	189,319	201,815	391,134	$	40.11	1.7

Total fair values of restricted stock vested during the 13 weeks ended March 1, 2014 and March 2, 2013 were $8,290 and $6,272, respectively. The total fair value of nonvested restricted stock at March 1, 2014 was $12,884.

We repurchased 64,063 and 59,652 restricted stock shares during the 13 weeks ended March 1, 2014 and March 2, 2013, respectively. The repurchases relate to statutory minimum tax withholding.

We have a Directors' Deferred Compensation plan that allows non-employee directors to defer all or a portion of their directors' compensation in a number of investment choices, including units representing shares of our common stock. We also have a Key Employee Deferred Compensation Plan that allows key employees to defer a portion of their eligible compensation in a number of investment choices, including units, representing shares of our common stock. We provide a 10 percent match on deferred compensation invested into units, representing shares of our common stock. A summary of deferred compensation units as of March 1, 2014, and changes during the 13 weeks then ended is presented below:

	Non-employee
	Directors	Employees	Total
Units outstanding November 30, 2013	312,680	61,288	373,968
Participant contributions	3,139	644	3,783
Company match contributions	314	64	378
Payouts	-	(4,577)	(4,577)
Units outstanding March 1, 2014	316,133	57,419	373,552