12.	EQUITY AWARD PLANS

In January 2006 the stockholders of the Company approved the adoption of the Amended and Restated 2005 Equity Incentive Plan (the “2005 Plan”) and, subsequently, have approved amendments to increase the number of issuable shares. Under the 2005 Plan, employees, directors, consultants and other individuals who provide services to the Company may be granted awards in the form of stock options, stock appreciation rights, restricted stock, restricted stock units or deferred stock units. Up to 2,800,000 shares of the Company’s common stock may be issued in respect of awards under the 2005 Plan, as amended, with no more than 1,500,000 of those shares permitted to be issued in respect of restricted stock, restricted stock units, or deferred stock units granted under the 2005 Plan. Awards of stock options to purchase the Company’s common stock will have exercise prices as determined by the Compensation Committee of the Board of Directors (the “Compensation Committee”), but such exercise prices may not be lower than the fair market value of the stock on the date of grant.

No stock options have been granted by the Company with an exercise price less than the fair market value of the Company’s common stock on the date of grant for any of the periods presented. The majority of the stock options issued under the 2005 Plan vest ratably over four-year periods and stock options issued under the 2005 Plan generally expire ten years from the date of grant. Restricted stock awards issued under the 2005 Plan have restrictions that lapse ratably over periods ranging from one to four years. The non-executive chairman of the Company’s Board of Directors is granted 6,000 shares of restricted stock and each non-employee director, other than the non-executive chairman, of the Company’s Board of Directors is granted 4,000 shares of restricted stock on an annual basis that will vest one year from the date of grant. The Company issues new shares of common stock upon exercise of vested stock options. As of January 28, 2017 there were 272,294 shares of the Company’s common stock available for grant under the 2005 Plan in the form of stock options, restricted stock, restricted stock units or deferred stock units.

Stock option activity for all plans was as follows:

	Outstanding Stock Options			Weighted Average Exercise Price		Weighted Average Remaining Life		Aggregate Intrinsic Value
	(in thousands)					(years)		(in thousands)

Balance—January 30, 2016		720		$	16.00
Granted		451			7.16
Exercised		(2	)		3.52
Forfeited		(64	)		15.62
Expired		(150	)		17.19
Balance—January 28, 2017		955		$	11.68		8.3		$ 2
Exercisable—January 28, 2017		273		$	16.26		7.1		$ 1

During fiscal 2016, 2015, 2014 and the four months ended January 31, 2015 the total intrinsic value of stock options exercised was $5,000, $63,000, $3,576,000 and $93,000, respectively. The total cash received from these stock option exercises was $6,000, $69,000, $271,000 and $29,000, respectively, and the actual tax benefit realized for the tax deductions from these option exercises was $2,000, $24,000, $1,347,000 and $35,000, respectively. During fiscal 2014 and the four months ended January 31, 2015 options to purchase 176,899 and 10,000 shares of common stock, respectively, with aggregate exercise prices of, $1,976,000 and $69,000, respectively, were exercised by the option holders and net-share settled by the Company, such that the Company withheld 68,739 and 4,455 shares of the Company’s common stock, respectively, which had a fair market value equal to the aggregate exercise prices of the stock options.

The weighted-average fair value of stock options granted during fiscal 2016, 2015, 2014 and the four months ended January 31, 2015 was estimated to be $2.96, $2.58, $8.21 and $3.04 per option share, respectively. The weighted-average fair value of each option granted is calculated on the date of grant using the Black-Scholes option pricing model.

Weighted-average assumptions for option grants were as follows:

	Year Ended								Four Months Ended				Year Ended
	January 28, 2017				January 30, 2016				January 31, 2015				September 30, 2014

Expected dividend yield			none				5.7	%			5.6	%			3.2	%
Expected price volatility			45.0	%			36.1	%			38.1	%			49.1	%
Risk-free interest rate			1.3	%			1.4	%			1.8	%			1.4	%
Expected life		5.3 years				5.0 years				5.4 years				4.7 years

Expected dividend yield was determined using a weighted average of the Company’s annualized dividend rate compared to the market price of the Company’s common stock as of the grant date. Expected volatility was determined using a weighted average of the historic volatility of the Company’s common stock as of the option grant date measured over a period equal to the expected life of the grant. Risk-free interest rates were based on the United States Treasury yield curve in effect at the date of the grant. Expected lives were determined using a weighted average of the historic lives of previously issued grants of the Company’s stock options.

The following table summarizes information about stock options outstanding as of January 28, 2017:

	Stock Options Outstanding						Stock Options Exercisable
Range of Exercise Prices	Number Outstanding		Weighted Average Remaining Life		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
	(in thousands)		(years)				(in thousands)

$ 3.52 to $ 7.00		83		9.5	$	5.68		1	$	3.52
7.01 to 8.00		368		9.2		7.49		—		—
8.01 to 14.00		25		5.3		11.64		17		11.80
14.01 to 15.00		370		7.8		14.34		183		14.33
15.01 to 19.00		16		8.0		15.51		5		15.59
19.01 to 23.00		73		6.5		20.17		52		20.38
23.01 to 31.38		20		6.8		31.03		15		31.03
$ 3.52 to $31.38		955		8.3	$	11.68		273	$	16.26

Restricted stock activity for the 2005 Plan was as follows:

	Outstanding Restricted Shares			Weighted Average Grant Date Fair Value
	(in thousands)

Nonvested—January 30, 2016		181		$	17.28
Granted		207			7.12
Vested		(96	)		9.85
Forfeited		(16	)		16.97
Nonvested—January 28, 2017		276		$	9.55

The Compensation Committee established performance goals for the award of performance-based RSUs for the Company’s executive officers, under the 2005 Plan, in each of August 2016 and April 2016 (collectively the “Fiscal 2016 Awards”) and April 2015 (the “Fiscal 2015 Awards”). The RSUs earned, if any, under the awards will be based on the Company’s cumulative operating income, as defined in the applicable award agreement (“RSU Operating Income”) for a specified three-year period (“Performance Period”). The grant of any RSUs under these awards will generally be further contingent on the continued employment of the executive officers with the Company through the dates on which the shares in respect of these RSUs, if any, are issued following the end of the applicable Performance Periods, as well as the achievement of certain minimum levels of RSU Operating Income in the final fiscal year of each applicable Performance Period. Any dividends declared on the shares of the Company’s common stock underlying the RSUs will be credited as additional RSUs based on the fair market value of the Company’s common stock on the dividend record date. The additional RSUs, if any, will be earned on the same terms as the original RSUs.

The following table sets forth the aggregate minimum, target and maximum RSUs, excluding RSUs from dividends declared, that may be earned by the executive officers for each fiscal year award cycle. The minimum RSUs will be earned if the Company’s RSU Operating Income during the Performance Period equals the specified threshold RSU Operating Income. Additional RSUs are earned ratably for RSU Operating Income that exceeds the specified threshold, up to the maximum amount for RSU Operating Income that equals or exceeds the specified maximum RSU Operating Income.

Awards	Performance Period	Minimum RSUs		Target RSUs		Maximum RSUs

Fiscal 2016 Awards	January 31, 2016 to February 3, 2018		13,698		54,789		82,185
Fiscal 2015 Awards	February 2, 2015 to January 28, 2017		15,218		30,436		45,655

Fiscal 2015 Awards include the prorated number of RSUs that may be earned by the Company’s former President and exclude RSUs forfeited by the Company’s former Executive Vice President & Chief Financial Officer. During fiscal 2016 the Company determined that the Fiscal 2016 Awards and Fiscal 2015 Awards were unlikely to be earned, even at the minimum level. No RSUs were earned under the awards for the three-year Performance Periods ending September 30, 2016, 2015 and 2014 because the Company’s RSU Operating Income during the Performance Period was less than the threshold RSU Operating Income required to earn the minimum level of award.

During fiscal 2016 three members of the Company’s Board of Directors received a cumulative total of 13,867 shares of restricted stock as compensation for their service on a special committee of the Board of Directors. The awards will vest at the earlier of 1) one day prior to the 2017 annual meeting of stockholders, 2) the end of the grantee’s Board service other than via resignation, or 3) a change in control of the Company (as defined in the 2005 Plan). During fiscal 2016, 10,974 deferred stock units were awarded to three members of the Company’s Board of Directors in lieu of cash retainers totaling $75,000.

Stock-based compensation expense in fiscal 2016, 2015, 2014 and the four months ended January 31, 2015 was $1,801,000, $2,784,000, $3,747,000 and $1,073,000, respectively. As of January 28, 2017 $3,626,000 of total unrecognized compensation cost related to all non-vested equity awards is expected to be recognized over a weighted-average period of 1.5 years.

During fiscal 2016, 2015, 2014 and the four months ended January 31, 2015 certain stock option exercises and vesting restricted stock awards were net-share settled by the Company such that the Company withheld shares of the Company’s common stock, which had a fair market value equivalent to the minimum statutory obligation for the applicable income and employment taxes for the awards, and the Company remitted the cash value to the appropriate taxing authorities. The total shares withheld in connection with tax obligations, which were 7,408, 15,024, 76,386 and 8,257, respectively, during fiscal 2016, 2015, 2014 and the four months ended January 31, 2015, are reflected as repurchase of common stock in the accompanying financial statements, and were based on the value of the Company’s common stock on the exercise or vesting date. The remaining shares, net of those withheld, were delivered to the award holders. Total payments for tax obligations to the tax authorities were $54,000, $127,000, $2,178,000 and $123,000 for fiscal 2016, 2015, 2014 and the four months ended January 31, 2015, respectively.