EQUITY PLANS

The Company has three equity incentive plans that provide for the issuance of stock options: the 2002 Stock Incentive Plan (the "2002 Plan"), the 2004 Equity Incentive Plan, as amended (the "2004 Plan"), and the 2012 Equity Incentive Plan, as amended and restated (the "2012 Plan") (collectively, the "Plans"). The maximum term of all incentive and non-statutory stock options or share awards granted under the Plans is 4 years. There were 2,800,000 shares authorized for grant under the 2002 Plan and 1,250,000 under the 2012 Plan prior to December 16, 2015, when the 2012 Plan was amended to increase shares available for issuance by 2,000,000. There were 1,054,267 remaining shares authorized for grant under the 2004 Plan as of December 16, 2010, the effective date when the 2004 Plan was amended to allow for the award of stock options. Prior to the expiration of the applicable plan, these shares may be used to issue stock options, restricted stock, restricted stock units or performance based awards to employees, officers, directors and others. As of July 29, 2017, 1,389,248 shares were available for grant under the 2012 Plan. The authorization for new grants under the 2002 Plan and 2004 Plan has expired.

The Company recognized total share-based compensation expense of $25.7 million for the fiscal year ended July 29, 2017, compared to $15.3 million and $14.0 million for the fiscal years ended July 30, 2016 and August 1, 2015, respectively. For the fiscal year ended July 29, 2017, share-based compensation expense related to performance-based share awards was $9.0 million. For the fiscal year ended July 30, 2016, the Company did not record share-based compensation expense related to performance-based share awards, including compensation expense related to performance units with vestings tied to Company's performance in fiscal 2016, as a result of performance measures not being attained at the end of the fiscal year and the resulting forfeiture of these awards. The Company recognized a benefit of $1.0 million related to performance-based share awards for the fiscal year ended August 1, 2015 due to the reversal of share-based compensation expense recorded in fiscal 2014 caused by performance measures not being attained as of the end of fiscal 2015 and the resulting forfeiture of these awards.

Vesting requirements for awards under the Plans are generally at the discretion of the Company's Board of Directors, or the Compensation Committee thereof, and for time vesting awards are typically four equal annual installments for employees and two equal installments for non-employee directors with the first installment on the date of grant and the second installment on the six month anniversary of the grant date. As of July 29, 2017, there was $38.6 million of total unrecognized compensation cost related to outstanding share-based compensation arrangements (including stock options, restricted stock units and performance-based restricted stock units). This cost is expected to be recognized over a weighted-average period of 2.4 years.

Restricted Stock Units

The fair value of restricted stock units and performance share units are determined based on the number of units granted and the quoted price of the Company's common stock as of the grant date. The following summary presents information regarding restricted stock units and performance units under the Plans as of July 29, 2017 and changes during the fiscal year then ended:



	Number of Shares		Weighted Average Grant-Date Fair Value
Outstanding at July 30, 2016	733,797		$	55.55
Granted	1,107,526		$	40.16
Vested	(420,098	)	$	50.14
Forfeited	(151,114	)	$	50.16
Outstanding at July 29, 2017	1,270,111		$	44.56

The total intrinsic value of restricted stock units vested was $10.5 million, $12.3 million and $17.3 million during the fiscal years ended July 29, 2017, July 30, 2016 and August 1, 2015, respectively.

During fiscal 2017, the Company granted 397,242 performance share units to its executives (subject to the issuance of 221,242 additional shares if the Company's performance exceeds specified targeted levels) with a weighted average grant-date fair value of $40.82. As of the fiscal year ended July 29, 2017, 150,396 of these performance share units vested based on the Company's earnings per diluted share, adjusted EBITDA and adjusted ROIC, with an estimated intrinsic value of approximately $5.7 million using the Company stock price as of July 28, 2017. Of the performance share units granted during fiscal 2017, 252,290 are tied to the Company's performance in the fiscal years ending July 28, 2018 and August 3, 2019.

No performance share units vested during the fiscal years ended July 30, 2016 and August 1, 2015.

Stock Options

The fair value of stock option grants were estimated at the date of grant using the Black-Scholes option pricing model. Black-Scholes utilizes assumptions related to volatility, the risk-free interest rate, the dividend yield and expected life. Expected volatilities utilized in the model are based on the historical volatility of the Company's stock price. The risk-free interest rate is derived from the U.S. Treasury yield curve in effect at the time of grant. The model incorporates exercise and post-vesting forfeiture assumptions based on an analysis of historical data. The expected term is derived from historical information and other factors.

The Company did not grant stock options in fiscal 2017. The following summary presents the weighted average assumptions used for stock options granted in fiscal 2016 and 2015:



	Fiscal year ended
		July 30, 2016		August 1, 2015
Expected volatility		27.5	%	26.2	%
Dividend yield		—	%	—	%
Risk free interest rate		1.3	%	1.4	%
Expected term (in years)		4.0		4.0

The following summary presents information regarding outstanding stock options as of July 29, 2017 and changes during the fiscal year then ended with regard to options under the Plans:



	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at beginning of year	343,629		$	49.13
Exercised	(8,510	)	$	32.20
Forfeited	(2,572	)	$	64.55
Cancelled	(3,858	)	$	42.82
Outstanding at end of year	328,689		$	49.52	5.0 years	$	868,658
Exercisable at end of year	265,847		$	47.05	4.4 years	$	868,658

The weighted average grant-date fair value of options granted during the fiscal years ended July 30, 2016 and August 1, 2015 was $15.59 and $14.82, respectively. The aggregate intrinsic value of options exercised during the fiscal years ended July 29, 2017, July 30, 2016, and August 1, 2015, was $0.1 million, $2.6 million and $3.1 million, respectively.