NOTE 14—EQUITY COMPENSATION PLANS

The Company has a stock-based compensation plan (the "2009 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 February 1, 2014, there were 2,738,100 awards outstanding and 770,361 awards available for grant under the 2009 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 or four year periods. Generally, all options granted prior to March 3, 2004 carry an expiration date of ten years and options granted on or after March 3, 2004 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 or four 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 2009 plan in conjunction with its non-qualified deferred compensation plan. Under the deferred compensation plan, 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 2009 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 February 1, 2014 is adequate to satisfy such activity during the next twelve-month period.

The following table summarizes the options under the plans:

	Fiscal Year 2013

	Shares			Weighted Average Exercise Price
Outstanding—beginning of year		1,678,593		$	8.20
Granted		308,963			11.86
Exercised		(188,652	)		7.16
Forfeited		(84,514	)		11.02
Expired		(55,919	)		13.48


Outstanding—end of year		1,658,471			8.67


Vested and expected to vest options—end of year		1,630,736			8.62


Options exercisable—end of year		1,158,960			7.53

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

	Fiscal 2013		Fiscal 2012		Fiscal 2011

Weighted average fair value at grant date per option	$	5.11	$	4.65	$	5.38
Intrinsic value of options exercised	$	1,059	$	874	$	202

The aggregate intrinsic value of outstanding options, exercisable options and expected to vest options at February 1, 2014 was $5.8 million, $5.5 million and $0.3 million, respectively. At February 1, 2014, the weighted average remaining contractual term of outstanding options, exercisable options and expected to vest options was 4.1 years, 3.0 years and 6.6 years, respectively. At February 1, 2014, 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 1.3 years.

The following table summarizes information about non-vested PSUs and RSUs since February 2, 2013:

							Weighted Average Fair Value

Nonvested at February 2, 2013	651,305		145,295		796,600		$	9.67
Granted	259,986		77,607		337,593			12.23
Forfeited	(235,778	)	(7,442	)	(243,220	)		9.30
Vested	—		(65,515	)	(65,515	)		11.57


Nonvested at February 1, 2014	675,513		149,945		825,458			10.68

The following table summarizes information about RSUs during the last three fiscal years:

(dollar amounts in thousands)	Fiscal 2013		Fiscal 2012		Fiscal 2011

Weighted average fair value at grant date per unit	$	12.23	$	9.48	$	10.45
Fair value at vesting date	$	758	$	768	$	1,498
Intrinsic value at conversion date	$	525	$	218	$	896
Tax benefits realized from conversions	$	197	$	82	$	336

At February 1, 2014, there was approximately $2.7 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 1.1 years.

The Company recognized approximately $1.2 million, $1.1 million, and $1.3 million of compensation expense related to stock options, and approximately $1.8 million, $0.2 million, and $1.9 million of compensation expense related to PSUs and RSUs in the aggregate, included in selling, general and administrative expenses for fiscal 2013, 2012, and 2011, respectively. The related tax benefit recognized was approximately $1.1 million, $0.4 million and $1.2 million for fiscal 2013, 2012 and 2011, 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

	February 1, 2014	February 2, 2013	January 28, 2012
Dividend yield	0%	0%	1.0%
Expected volatility	53%	58%	58%
Risk-free interest rate range:
High	0.7%	0.6%	1.9%
Low	0.7%	0.5%	1.6%
Ranges of expected lives in years	4 - 5	4 - 5	4 - 5

The Company granted approximately 109,000 and 106,000 PSUs in fiscal 2013 and 2012, 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 2015 and 2014, 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 2015 and 2014, respectively. At the date of the grants, the fair values were $11.85 per unit and $9.98 per unit for the 2013 and 2012 awards, respectively. The Company also granted approximately 55,000 and 53,000 PSUs for fiscal 2013 and 2012, 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 2015 and 2014, 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 $13.41 per unit and $7.96 per unit grant date fair value for the 2013 and 2012 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 2013 and 2012.

During fiscal 2013, the Company granted approximately 4,000 restricted stock units 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 $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 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 2013, 2012 and 2011 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 2013 and 2012 was immaterial. As of February 1, 2014, there were 1,875,753 shares available for issuance under this plan.