STOCK-BASED COMPENSATION

The following table summarizes the Company’s stock-based compensation expense (in thousands):



	Thirteen Weeks Ended				Twenty-six Weeks Ended
	August 2, 2014		August 3, 2013		August 2, 2014		August 3, 2013
Deferred Awards	$	2,776	$	3,311	$	5,759	$	6,842
Performance Awards	2,535		2,207		2,614		4,108
Total stock-based compensation expense (1)	$	5,311	$	5,518	$	8,373	$	10,950

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(1)	During the Second Quarter 2014 and the Second Quarter 2013, approximately $1.0 million and $0.9 million, respectively, were included in cost of sales. During Year-To-Date 2014 and Year-To-Date 2013, approximately $1.5 million and $1.6 million, respectively, were included in cost of sales. All other stock-based compensation is included in selling, general & administrative expenses.

The Company recognized a tax benefit related to stock-based compensation expense of approximately $3.3 million and $4.3 million for Year-To-Date 2014 and Year-To-Date 2013, respectively.

Awards Granted During Year-To-Date 2014

The Company granted Deferred Awards and Performance Awards to various executives and members of our Board of Directors during Year-To-Date 2014. Awards were also granted in connection with new hires and contractual obligations. Generally, the Deferred Awards have a three year vesting period with one third of the award vesting annually. Deferred Awards granted to the Board of Directors vest after one year. In general, the Performance Awards granted to executives other than our CEO have a three-year performance period, and, if earned, vest upon completion of the three-year performance period. Depending on the final adjusted earnings per share achieved for the three-year performance period and the Company's total shareholder return ("TSR") relative to that of the Company's peer group, the percentage of Target Shares earned can be 0% and range up to 300% for non-CEO Performance Awards. The Performance Award granted to our CEO, if earned, has a one year performance and vest period. Depending on the final adjusted operating income for the one-year performance period, the percentage of Target Shares earned can be 0% and range up to 200%.

Changes in the Company’s Unvested Stock Awards during Year-To-Date 2014

Deferred Awards



	Number of Shares		Weighted Average Grant Date Fair Value
	(in thousands)
Unvested Deferred Awards, beginning of period	691		$	49.27
Granted	228		48.18
Vested	(212	)	48.71
Forfeited	(44	)	49.99
Unvested Deferred Awards, end of period	663		$	49.02

Total unrecognized stock-based compensation expense related to unvested Deferred Awards approximated $23.5 million as of August 2, 2014, which will be recognized over a weighted average period of approximately 2.4 years.

Performance Awards



	Number of Shares (1)		Weighted Average Grant Date Fair Value
	(in thousands)
Unvested Performance Awards, beginning of period	267		$	47.67
Granted	239		50.90
Vested shares, including shares vested in excess of target	(107	)	46.34
Forfeited	(12	)	49.17
Unvested Performance Awards, end of period	387		$	49.99

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(1)	For those awards in which the performance period is complete, the number of unvested shares is based on actual shares that will vest upon completion of the service period. For those awards in which the performance period is not yet complete, the number of unvested shares is based on the participants earning their Target Shares at 100%.

For those awards in which the performance period is not yet complete, the cumulative expense recognized reflects changes in adjusted operating income estimates as they occur. Total unrecognized stock-based compensation expense related to unvested Performance Awards approximated $12.6 million as of August 2, 2014, which will be recognized over a weighted average period of approximately 1.9 years.

Stock Options

At August 2, 2014, there were no unvested stock options.

Outstanding Stock Options

Changes in the Company’s outstanding stock options for Year-To-Date 2014 were as follows:



	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value
	(in thousands)				(in years)	(in thousands)
Options outstanding, beginning of period	34		$	28.77	3.8	$	817
Exercised	(2	)	23.69		N/A	62
Forfeited	(1	)	23.84		N/A	26
Options outstanding and exercisable, end of period	31		$	29.29	3.7	$	648