On June 20, 2023, our shareholders approved an amendment and restatement of the Shoe Carnival, Inc. 2017 Equity Incentive Plan (as amended and restated, the “2017 Plan”). Pursuant to the amendment and restatement, the number of shares of our common stock available for issuance under the 2017 Equity Plan was increased by an additional 1,800,000 shares, the term of the 2017 Equity Plan was extended an additional ten years from the date of shareholder approval, and certain other design changes were made to the plan.

Stock-based compensation includes share-settled awards issued pursuant to our 2017 Equity Plan in the form of restricted stock units, performance stock units, and restricted and other stock awards. Additionally, we recognize stock-based compensation expense for the discount on shares sold to employees through our Employee Stock Purchase Plan and for cash-settled stock appreciation rights (SARs). For fiscal years 2023, 2022 and 2021, stock-based compensation expense was comprised of the following:


(In thousands)	2023			2022			2021
Share-settled equity awards	$	4,897		$	5,542		$	5,234
Stock appreciation rights		(42	)		(141	)		269
Employee stock purchase plan		32			33			28
Total stock-based compensation expense	$	4,887		$	5,434		$	5,531
Income tax benefit at statutory rates	$	1,189		$	1,368		$	1,399
Additional income tax benefit on vesting of share-settled awards	$	846		$	562		$	992

As of February 3, 2024, there was approximately $5.3 million of unrecognized compensation expense remaining related to our share-settled equity awards. The cost is expected to be recognized over a weighted average period of approximately 1.6 years.

Under the 2017 Equity Plan, we may issue stock units, restricted stock, stock appreciation rights, stock options and other stock-based awards to eligible participants. According to the terms of the 2017 Equity Plan, no further awards may be made from any previously approved equity plans. As of February 3, 2024, there were approximately 1.9 million shares of our common stock available for issuance under the 2017 Equity Plan, assuming that all unmeasured but outstanding performance stock units vest at the maximum level of performance.

Equity awards issued to employees are classified as either performance-based or service-based. Our outstanding performance-based equity awards were granted such that vesting depended on whether Diluted Net Income per Share met an established threshold, target, or maximum level of performance. Diluted Net Income per Share below the threshold level of performance results in complete forfeiture of the award. Any performance stock units granted in Fiscal 2023 and Fiscal 2022 that are earned based on our actual performance vest in full on March 31, 2026 and March 31, 2025, respectively. Other vesting scenarios have been used in prior years and for awards used to incentivize specific employee performance.

Our service-based restricted stock units and restricted stock awards vest under different scenarios based on the year they were granted, as determined and approved by our Board of Directors. The restricted stock units granted in Fiscal 2023 and Fiscal 2022 vest one-third after two years and two-thirds after three years. For our non-employee Board

members and Vice Chairman, all restricted stock awards are issued to vest on January 2nd of the year following the year of the grant. Awards that contain both performance and service-based conditions require that the performance target be met during the required service period. Other vesting scenarios have been used for employees in prior years and for sign-on awards granted to newly hired employees.

Under the 2017 Equity Plan, recipients of restricted stock, restricted stock units and performance stock units are entitled to receive dividend equivalents, based on dividends actually declared and paid, on such awards, and such dividend equivalents are subject to the same restrictions and risk of forfeiture as the restricted stock, restricted stock units and performance stock units.

The following table summarizes transactions for our restricted stock units and performance stock units:


	Number of Shares			Weighted- Average Grant Date Fair Value
Outstanding at January 28, 2023		560,323		$	23.27
Granted		380,653			24.99
Vested		(284,427	)		16.83
Forfeited		(77,242	)		27.12
Outstanding at February 3, 2024		579,307		$	27.04

The total fair value at grant date of restricted stock units and performance stock units that vested during Fiscal 2023, Fiscal 2022 and Fiscal 2021 was $4.8 million, $3.3 million and $3.7 million, respectively. The weighted-average grant date fair value of restricted stock units and performance stock units granted during Fiscal 2022 and Fiscal 2021 was $30.32 and $28.25, respectively.

The following table summarizes transactions for our restricted stock and other stock awards:


	Number of Shares			Weighted- Average Grant Date Fair Value
Outstanding at January 28, 2023		0		$	0.00
Granted		21,462			21.90
Vested		(21,462	)		21.90
Outstanding at February 3, 2024		0		$	0.00

The total fair value at grant date of restricted stock and other stock awards that vested during Fiscal 2023, Fiscal 2022 and Fiscal 2021 was $0.5 million, $0.5 million and $0.3 million, respectively. The weighted-average grant date fair value of restricted stock and other stock awards granted during Fiscal 2022 and Fiscal 2021 was $24.12 and $32.79, respectively.

Cash-settled SARs were granted to certain non-executive employees. Each SAR entitles holders, upon exercise of their vested shares, to receive cash in an amount equal to the closing price of our stock on the date of exercise less the exercise price, with a maximum amount of gain defined. The SARs granted during the first quarter of Fiscal 2021 vested and became fully exercisable on March 31, 2022 and any unexercised SARs will expire on March 31, 2024. The SARs issued in Fiscal 2021 have a defined maximum gain of $5.00 over the exercise price of $30.94.

The following table summarizes SARs activity:


	Number of Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)
Outstanding at January 28, 2023		76,000		$	30.94
Granted		0			0.00
Forfeited		(7,800	)		30.94
Exercised		0			0.00
Outstanding at February 3, 2024		68,200		$	30.94		0.2

The fair value of these liability awards is remeasured, using a trinomial lattice model, at each reporting period until the date of settlement. Increases or decreases in stock-based compensation expense are recognized over the vesting period, or immediately for vested awards. The weighted-average fair value of outstanding SAR awards as of February 3, 2024, was $0.29.

The fair value was estimated using a trinomial lattice model with the following assumptions:


	February 3, 2024			January 28, 2023
Risk free interest rate yield curve	3.99%-5.49%			3.62%-4.68%
Expected dividend yield		1.8	%	1.3%
Expected volatility		47.54	%		65.42	%
Maximum life	0.2 Years			1.2 Years
Exercise multiple		1.03			1.03
Maximum payout	$	5.00		$	5.00
Employee exit rate	2.2% - 9.0%			2.2% - 9.0%

The risk-free interest rate was based on the U.S. Treasury yield curve in effect at the end of the reporting period. The expected dividend yield was based on our quarterly cash dividends, with the assumption that quarterly dividends would continue at that rate. Expected volatility was based on the historical volatility of our common stock. The exercise multiple and employee exit rate were based on historical data.

In 1995, our Board of Directors and shareholders approved the Shoe Carnival, Inc. Employee Stock Purchase Plan (the “Stock Purchase Plan”). The Stock Purchase Plan reserves 450,000 shares of our common stock (subject to adjustment for any subsequent stock splits, stock dividends and certain other changes in our common stock) for issuance and sale to any employee who has been employed for more than a year at the beginning of the calendar year, and who is not a 10% owner of our common stock, at 85% of the then fair market value up to a maximum of $5,000 in any calendar year. Under the Stock Purchase Plan, 9,000, 9,000 and 5,000 shares of common stock were purchased by plan participants and proceeds to us for the sale of those shares were approximately $183,000, $187,000 and $160,000 for fiscal years 2023, 2022 and 2021, respectively. At February 3, 2024, there were approximately 100,000 shares of unissued common stock reserved for future purchase under the Stock Purchase Plan.