NOTE 15—EQUITY COMPENSATION PLANS

The Company has a stock-based compensation plan (the "Stock Incentive Plan") under which it has previously granted, and may continue to grant, non-qualified stock options, incentive stock options, restricted stock units ("RSUs"), and Performance Share Units ("PSUs") to key employees and members of its Board of Directors. As of January 31, 2015, there were 2,643,520 awards outstanding and 2,455,697 awards available for grant under the Stock Incentive Plan.

Incentive stock options and non-qualified stock options granted to non-officers vest fully on the third anniversary of their grant date and to officers vest in equal tranches over three year periods. All currently outstanding options carry an expiration date of seven years. RSUs previously granted to non-officers vest fully on the third anniversary of their grant date. RSUs previously granted to officers vest in equal tranches over three year periods. PSUs granted to officers vest on the third anniversary of their grant date if, and only if, certain predetermined performance targets are achieved.

The Company has also granted RSUs under the Stock Incentive Plan in conjunction with its non-qualified deferred compensation plan. Under the deferred compensation plan, through fiscal 2013, the first 20% of an officer's bonus deferred into the Company's stock fund was matched by the Company on a one-for-one basis with RSUs that vest over a three-year period, with one third vesting on each of the first three anniversaries of the grant date. On January 31, 2014, the Company amended and restated the deferred compensation plan to eliminate the automatic matching employer contributions effective for fiscal 2014.

The terms and conditions applicable to future grants under the Stock Incentive Plan are generally determined by the Board of Directors, provided that the exercise price of stock options must be at least 100% of the quoted market price of the common stock on the grant date. The Company currently satisfies all share requirements resulting from RSU and PSU conversions and option exercises from its treasury stock. The Company believes its treasury share balance at January 31, 2015 is adequate to satisfy such activity during the next twelve-month period.

The following table summarizes the options under the Stock Incentive Plan:

	Fiscal Year 2014
	Shares			Weighted Average Exercise Price
Outstanding—beginning of year		1,658,471		$	8.67
Granted		1,234,447			8.02
Exercised		(255,023	)		3.73
Forfeited		(878,801	)		7.15
Expired		(212,818	)		13.11

Outstanding—end of year		1,546,276			9.22

Vested and expected to vest options—end of year		1,499,115			9.18

Options exercisable—end of year		921,422			8.28

The following table summarizes information about options during the last three fiscal years (dollars in thousands except per option):

	Fiscal 2014		Fiscal 2013		Fiscal 2012
Weighted average fair value at grant date per option	$	2.25	$	5.11	$	4.65
Intrinsic value of options exercised	$	1,532	$	1,059	$	874

The aggregate intrinsic value of outstanding options, exercisable options and expected to vest options at January 31, 2015 was $1.5 million, $1.5 million and $0.0 million, respectively. At January 31, 2015, the weighted average remaining contractual term of outstanding options, exercisable options and expected to vest options was 4.2 years, 2.9 years and 6.2 years, respectively. At January 31, 2015, there was approximately $1.7 million of total unrecognized pre-tax compensation cost related to non-vested stock options, which is expected to be recognized over a weighted average period of 1.4 years.

The following table summarizes information about non-vested PSUs and RSUs since February 1, 2014:

	Number of PSUs			Number of RSUs			Total			Weighted Average Fair Value
Nonvested at February 1, 2014		675,513			149,945			825,458		$	10.68
Granted		367,102			337,111			704,213			8.03
Forfeited		(581,609	)		(45,604	)		(627,213	)		7.37
Vested		—			(142,942	)		(142,942	)		10.59

Nonvested at January 31, 2015		461,006			298,510			759,516			7.93

The following table summarizes information about PSUs and RSUs, in the aggregate, during the last three fiscal years:

(dollar amounts in thousands)	Fiscal 2014		Fiscal 2013		Fiscal 2012
Weighted average fair value at grant date per unit	$	8.03	$	12.23	$	9.48
Fair value at vesting date	$	1,463	$	758	$	768
Intrinsic value at conversion date	$	188	$	525	$	218
Tax benefits realized from conversions	$	71	$	197	$	82

At January 31, 2015, there was approximately $3.0 million of total unrecognized pre-tax compensation cost related to non-vested PSUs and RSUs, in the aggregate, which is expected to be recognized over a weighted-average period of 1.2 years.

The Company recognized approximately $1.2 million, $1.2 million, and $1.1 million of compensation expense related to stock options, and approximately $1.1 million, $1.8 million, and $0.2 million of compensation expense related to PSUs and RSUs in the aggregate, included in selling, general and administrative expenses for fiscal 2014, 2013, and 2012, respectively. The related tax benefit recognized was approximately $0.9 million, $1.1 million and $0.4 million for fiscal 2014, 2013, and 2012, respectively.

Expected volatility is based on historical volatilities for a time period similar to that of the expected term and the expected term of the options is based on actual experience. The risk-free rate is based on the U.S. treasury yield curve for issues with a remaining term equal to the expected term. The fair value of each option granted is estimated on the date of grant using the Black-Scholes option-pricing model. The following are the weighted-average assumptions:

	Year ended
	January 31, 2015			February 1, 2014			February 2, 2013
Dividend yield		0	%		0	%		0	%
Expected volatility		41	%		53	%		58	%
Risk-free interest rate range:
High		1.5	%		0.7	%		0.6	%
Low		0.1	%		0.7	%		0.5	%
Ranges of expected lives in years		1 - 5			4 - 5			4 - 5

The Company granted approximately 155,000 and 109,000 PSUs in fiscal 2014 and 2013, respectively that will vest if the employees remain continuously employed through the third anniversary date of the grant and the Company achieves a return on invested capital target for fiscal years 2016 and 2015, respectively. The number of underlying shares that may be issued upon vesting will range from 0% to 150%, depending upon the Company achieving the financial targets in fiscal years 2016 and 2015, respectively. At the date of the grants, the fair values were $10.26 per unit and $11.85 per unit for the 2014 and 2013 awards, respectively. The Company also granted approximately 77,000 and 55,000 PSUs for fiscal 2014 and 2013, respectively, that will vest if the employees remain continuously employed through the third anniversary date of the grant and will become exercisable if the Company satisfies a total shareholder return target in fiscal 2016 and 2015, respectively. The number of underlying shares that may become exercisable will range from 0% to 175% depending on whether the market condition is achieved. The Company used a Monte Carlo simulation to estimate a $9.13 per unit and $13.41 per unit grant date fair value for the 2014 and 2013 PSUs, respectively. The non-vested restricted stock award table reflects the maximum vesting of underlying shares for performance and market based awards granted in both 2014 and 2013.

During fiscal 2014 and 2013, the Company granted approximately 900 and 4,000 restricted stock units, respectfully, for officers' deferred bonus matches under the Company's non-qualified deferred compensation plan, which vest over a three-year period. The fair value of these awards was $12.27 and $11.25 per unit and the compensation expense recorded for these awards was immaterial. The Company did not grant any restricted stock units for officers' deferred bonus matches under the Company's non-qualified deferred compensation plan during fiscal 2012.

During fiscal 2014, the Company granted approximately 58,000 restricted stock units to its non-employee directors of the board, which vest over a one-year period with a quarter vesting on each of the first four quarters following their grant date. The fair value for these awards was $11.25 per unit. During fiscal 2013, the Company granted approximately 54,000 restricted stock units to its non-employee directors of the board, which vest over a one-year period with a quarter vesting on each of the first four quarters following their grant date. The fair value for these awards was $12.05 per unit. During fiscal 2012, the Company granted approximately 33,000 restricted stock units to its non-employee directors of the board, which vest over a one-year period with a quarter vesting on each of the first four quarters following their grant date. The fair value was $9.98 per unit.

The Company reflects in its consolidated statement of cash flows any tax benefits realized upon the exercise of stock options or issuance of RSUs in excess of that which is associated with the expense recognized for financial reporting purposes. The amounts reflected as financing cash inflows and operating cash outflows in the Consolidated Statement of Cash Flows for fiscal 2014, 2013 and 2012 are immaterial.

During fiscal 2011, the Company began an employee stock purchase plan which provides eligible employees the opportunity to purchase shares of the Company's stock at a stated discount through regular payroll deductions. The aggregate number of shares of common stock that may be issued or transferred under the plan is 2,000,000 shares. All shares purchased by employees under this plan will be issued through treasury stock. The Company's expense for the discount during fiscal years 2014, 2013 and 2012 was immaterial. As of January 31, 2015, there were 1,803,880 shares available for issuance under this plan.