Stock-Based Compensation

Stock-based compensation. For the three month periods ended April 29, 2017 and April 30, 2016, the Company recognized stock-based compensation expense as follows:



	Three Months Ended
($000)	April 29, 2017		April 30, 2016
Restricted stock	$	10,701	$	9,065
Performance awards	8,783		7,949
Employee stock purchase plan	754		702
Total	$	20,238	$	17,716

Total stock-based compensation expense recognized in the Company's Condensed Consolidated Statements of Earnings for the three month periods ended April 29, 2017 and April 30, 2016 is as follows:



	Three Months Ended
Statements of Earnings Classification ($000)	April 29, 2017		April 30, 2016
Cost of goods sold	$	9,795	$	7,830
Selling, general and administrative	10,443		9,886
Total	$	20,238	$	17,716

The tax benefit related to stock-based compensation expense for the three month periods ended April 29, 2017 and April 30, 2016 was $7.0 million and $6.1 million, respectively.

Restricted stock awards. The Company grants shares of restricted stock to directors, officers, and key employees. The market value of shares of restricted stock at the date of grant is amortized to expense over the vesting period of generally three to five years.

During the three month periods ended April 29, 2017 and April 30, 2016, shares purchased by the Company for tax withholding totaled 576,813 and 636,997, respectively, and are considered treasury shares which are available for reissuance.

Performance share awards. The Company has a performance share award program for senior executives. A performance share award represents a right to receive shares of restricted stock on a specified settlement date based on the Company’s attainment of a profitability-based performance goal during the performance period, which is the Company’s fiscal year. If attained, the restricted stock then vests over a service period, generally two to three years from the date the performance award was granted.

As of April 29, 2017, shares related to unvested restricted stock and performance share awards totaled 5.3 million shares. A summary of restricted stock and performance share award activity for the three month period ended April 29, 2017 is presented below:



(000, except per share data)	Number of shares		Weighted average grant date fair value
Unvested at January 28, 2017	5,563		$	43.19
Awarded	1,103		65.75
Released	(1,327	)	38.23
Forfeited	(20	)	51.64
Unvested at April 29, 2017	5,319		$	49.82

The unamortized compensation expense at April 29, 2017 was $144.6 million which is expected to be recognized over a weighted-average remaining period of 2.4 years. The unamortized compensation expense at April 30, 2016 was $130.2 million, which was expected to be recognized over a weighted-average remaining period of 2.4 years.

Employee stock purchase plan. Under the Employee Stock Purchase Plan (“ESPP”), eligible employees participating in the quarterly offering period can choose to have up to the lesser of 10% of their annual base earnings or the IRS annual share purchase limit of $25,000 in aggregate market value to purchase the Company’s common stock. The purchase price of the stock is 85% of the closing market price on the date of purchase. Purchases occur on a quarterly basis (on the last trading day of each calendar quarter). The Company recognizes expense for ESPP purchase rights equal to the value of the 15% discount given on the purchase date.

Stock option activity. A summary of the stock option activity for the three month period ended April 29, 2017 is presented below:



	Number of shares		Weighted average exercise price		Weighted average remaining contractual term	Aggregate intrinsic value ($000)
Outstanding at January 28, 2017	48,564		$	8.19
Granted	—		—
Exercised	(16,188	)	8.19
Forfeited	—		—
Outstanding at April 29, 2017, all vested	32,376		$	8.19	0.07	$	1,839

No stock options were granted during the three month periods ended April 29, 2017 and April 30, 2016.

As of April 29, 2017, the outstanding and exercisable options to purchase 32,376 shares of common stock had a weighted average exercise price of $8.19 and a weighted average remaining contractual life of 0.07 years. These remaining stock options were exercised in May 2017.

2017 Equity Incentive Plan. At the Company's Annual Meeting on May 17, 2017, stockholders approved the Ross Stores, Inc. 2017 Equity Incentive Plan ("2017 Plan") which replaced the Company's 2008 Equity Incentive Plan ("Predecessor Plan"). The 2017 Plan, which was authorized to issue a maximum of 12.0 million shares, was immediately effective upon approval and no further awards were granted under the Predecessor Plan, which was terminated.