NOTE 12 - STOCK-BASED COMPENSATION

As approved by our shareholders, we established the Amended and Restated 2001 Equity Incentive Plan (“2001 Equity Incentive Plan”) and the Amended and Restated 2008 Equity Incentive Plan (“2008 Equity Incentive Plan” and collectively with the 2001 Equity Incentive Plan, “Equity Incentive Plans”) to reward, retain and attract key personnel. The Equity Incentive Plans provide for grants of non-qualified or incentive stock options, 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 our common stock were reserved for issuance upon exercise of awards, respectively. The 2001 Equity Incentive Plan expired in the second quarter of 2014.

Stock-based compensation expense by type of grant for each period presented was as follows (in thousands, except per share amounts):



	Fiscal Year
	2016			2015			2014
Stock options and SARs	$	—		$	30		$	703
Non-vested stock	6,676			7,171			5,034
Performance shares	2,785			5,193			3,927
Total stock-based compensation expense	9,461			12,394			9,664
Related tax benefit	(3,557		)	(4,660		)	(3,634		)
Stock-based compensation expense, net of tax	$	5,904		$	7,734		$	6,030

As of January 28, 2017, we had unrecognized compensation cost of $14.9 million related to stock-based compensation awards granted. That cost is expected to be recognized over a weighted average period of 2.3 years.

SARs

Prior to 2012, we granted stock options and SARs to our employees, which generally vested over four years from the date of grant. There were no stock options outstanding as of January 28, 2017 and January 30, 2016. Outstanding SARs will expire, if not exercised or forfeited, within seven years from the date of grant. Exercised SARs are settled by the issuance of common stock in an amount equal to the increase in our stock price between the grant date and the exercise date.

The following table summarizes SARs activity during 2016:



	Number of Outstanding Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (in thousands)
Outstanding, vested and exercisable at January 30, 2016	224,400		$	17.16
Forfeited	(46,500	)	15.14
Outstanding, vested and exercisable at January 28, 2017	177,900		$	17.69	0.8	$	—

No SARs were exercised during 2016. 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 2015 and 2014 was $0.9 million and $3.7 million, respectively.

Non-vested Stock

We grant shares of non-vested stock to our employees and non-employee 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. Compensation expense is recorded ratably over the vesting period, which ranges from one to four years from the date of grant. Certain non-vested stock awards have shareholder rights, including the right to vote and to receive dividends. The fair value of non-vested stock awards is based on the closing share price of our common stock on the date of grant. The fair value of non-vested stock awards that do not have dividend rights is discounted for the present value of expected dividends during the vesting period.

The following table summarizes non-vested stock activity during 2016:



Non-vested Stock	Number of Shares		Weighted Average Grant Date Fair Value
Outstanding at January 30, 2016	894,526		$	20.20
Granted	1,411,947		6.75
Vested	(384,756	)	19.04
Forfeited	(325,307	)	12.18
Outstanding at January 28, 2017	1,596,410		10.22

The aggregate intrinsic value of non-vested stock that vested during 2016, 2015 and 2014 was $2.7 million, $5.4 million and $5.7 million, respectively. The weighted-average grant date fair value for non-vested stock granted in 2016, 2015 and 2014 was $6.75, $18.70 and $22.81, respectively. The payment of the employees’ tax liability for a portion of the non-vested stock that vested during 2016 was satisfied by withholding shares with a fair value equal to the tax liability. As a result, the actual number of shares issued was 299,139.

Performance Shares

We grant performance shares as a means of rewarding management for our long-term performance based on shareholder return performance measures. The actual number of shares that may be issued ranges from zero to a maximum of twice the number of granted shares outstanding, as reflected in the table below and is based on our shareholder return performance relative to a specific group of companies over a 3-year performance cycle. Compensation expense is recorded ratably over the corresponding 3-year vesting period. The fair value of performance shares is determined using 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 were outstanding at January 28, 2017:



Period Granted	Target Shares Outstanding at Beginning of Year	Target Shares Granted	Target Shares Vested		Target Shares Forfeited		Target Shares Outstanding at End of Year	Weighted Average Grant Date Fair Value per Share
2015	223,876	—	(6,983	)	(58,403	)	158,490	$	28.33
2016	—	451,680	(5,168	)	(116,279	)	330,233	8.69
Total	223,876	451,680	(12,151	)	(174,682	)	488,723

For the 2014 performance grant, none of the 120,318 target shares that vested on January 28, 2017 were earned. The aggregate intrinsic value of shares that vested and were earned during 2016, 2015 and 2014 was $0.1 million, $4.9 million and $0.8 million, respectively. The payment of the recipients’ tax liability for shares that were earned during 2016 was satisfied by withholding shares with a fair value equal to the tax liability. As a result, the actual number of shares issued was 11,323.