3. Stock-Based Compensation

As approved by the Company's shareholders, the Company established the Amended and Restated 2001 Equity Incentive Plan (the "2001 Equity Incentive Plan") and the Second Amended and Restated 2008 Equity Incentive Plan (the "2008 Equity Incentive Plan" and collectively with the 2001 Equity Incentive Plan, the "Equity Incentive Plans") to reward, retain and attract key personnel. The Equity Incentive Plans provide for grants of nonqualified or incentive stock options, stock appreciation rights ("SARs"), performance shares or units, stock units and stock grants. To fund the 2001 and 2008 Equity Incentive Plans, 12,375,000 and 4,550,000 shares of the Company's common stock were reserved for issuance upon exercise of awards, respectively.

The following table summarizes stock-based compensation expense by type of grant for each period (in thousands):



	Thirteen Weeks Ended						Twenty-Six Weeks Ended
	August 3, 2013			July 28, 2012			August 3, 2013			July 28, 2012
Stock options and SARs	$	466		$	673		$	796		$	1,540
Non-vested stock	921			827			1,972			1,455
Performance shares	659			611			1,257			441
Total compensation expense	2,046			2,111			4,025			3,436
Related tax benefit	(745		)	(794		)	(1,489		)	(1,292		)
	$	1,301		$	1,317		$	2,536		$	2,144

As of August 3, 2013, the Company had unrecognized compensation cost of $20.8 million related to stock-based compensation awards granted. That cost is expected to be recognized over a weighted average period of 2.6 years.

Stock Options and SARs

The Company historically granted shares of stock options and SARs to its employees and members of management. The right to exercise stock options and SARs generally vests over four years from the date of grant, with 25% vesting at the end of each of the first four years following the date of grant. Stock options and SARs are settled by issuance of common stock. Stock options issued prior to January 29, 2005 will generally expire, if not exercised, within ten years from the date of the grant, while stock options and SARs granted after that date will generally expire, if not exercised, within seven years from the date of grant. No stock options or SARs were granted during the twenty-six weeks ended August 3, 2013 or July 28, 2012.

The following table summarizes information about stock options and SARs outstanding under the Equity Incentive Plans as of August 3, 2013 and changes during the twenty-six weeks ended August 3, 2013:



	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (in thousands)
Outstanding at February 2, 2013	1,877,415		$	16.69
Exercised	(585,798	)	16.98
Forfeited	(65,110	)	17.21
Outstanding at August 3, 2013	1,226,507		$	16.52	2.9	$	10,642

Vested or expected to vest at August 3, 2013	1,158,582		$	16.48	2.8	$	10,105

Exercisable at August 3, 2013	886,882		$	16.23	2.4	$	7,957

The following table summarizes information about non-vested stock option awards and SARs outstanding as of August 3, 2013 and changes during the twenty-six weeks ended August 3, 2013:



Stock Options/SARs	Number of Shares		Weighted Average Grant Date Fair Value
Non-vested at February 2, 2013	790,164		$	7.31
Vested	(389,089	)	6.63
Forfeited	(61,450	)	7.96
Non-vested at August 3, 2013	339,625		$	7.97

The aggregate intrinsic value of stock options and SARs, defined as the amount by which the market price of the underlying stock on the date of exercise exceeds the exercise price of the award, exercised during the twenty-six weeks ended August 3, 2013 and July 28, 2012 was $5.6 million and $2.9 million, respectively.

Non-vested Stock

The Company grants shares of non-vested stock to its employees, members of management and independent directors. The non-vested stock converts one for one to common stock at the end of the vesting period at no cost to the recipient to whom it is awarded. The vesting period of the non-vested stock ranges from one to four years from the date of grant.

The following table summarizes information about non-vested stock granted by the Company as of August 3, 2013 and changes during the twenty-six weeks ended August 3, 2013:



Non-vested Stock	Number of Shares		Weighted Average Grant Date Fair Value
Outstanding at February 2, 2013	642,409		$	16.21
Granted	308,373		25.30
Vested	(174,617	)	16.37
Forfeited	(85,390	)	15.56
Outstanding at August 3, 2013	690,775		$	20.31

The aggregate intrinsic value of non-vested stock that vested during the current year was $4.4 million. The payment of the employees' tax liability for a portion of the vested shares was satisfied by withholding shares with a fair value equal to the tax liability. As a result, the actual number of shares issued was 134,099.

Performance Shares

The Company grants performance shares to members of senior management, at no cost to the recipient, as a means of rewarding them for the Company's long-term performance based on shareholder return performance measures. The actual number of shares that could be issued ranges from zero to a maximum of two times the number of granted shares outstanding as reflected in the table below. The actual number of shares issued is determined by the Company's shareholder return performance relative to a specific group of companies over a three-year performance cycle. Compensation expense, which is recorded ratably over the vesting period, is based on the fair value at grant date and the anticipated number of shares of the Company's common stock, which is determined on a Monte Carlo probability model. Grant recipients do not have any shareholder rights until the granted shares have been issued.

The following table summarizes information about the performance shares that remain outstanding as of August 3, 2013:



Period Granted	Target Shares Outstanding at February 2, 2013	Target Shares Granted During Current Year	Target Shares Vested During Current Year		Target Shares Forfeited During Current Year		Target Shares Outstanding at August 3, 2013	Weighted Average Grant Date Fair Value Per Share
2011	39,800	—	(1,150	)	(5,775	)	32,875	$	25.00
2012	238,100	—	(3,300	)	(25,000	)	209,800	18.04
2013	—	158,400	—		—		158,400	33.81
Total	277,900	158,400	(4,450	)	(30,775	)	401,075

During the current year, 104,490 shares, with an aggregate intrinsic value of $2.7 million, vested related to the 2010 performance share grant. The payment of the recipients' tax liability of approximately $0.9 million for vested shares was satisfied by withholding shares with a fair value equal to the tax liability. As a result, the actual number of shares issued was 75,176.