At our 2017 annual meeting of shareholders, our shareholders approved a new equity incentive plan, the Shoe Carnival, Inc. 2017 Equity Incentive Plan (the “2017 Plan”), which replaced our 2000 Stock Option and Incentive Plan, as amended (the “2000 Plan”). Under the 2017 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 Plan, no further awards may be made under the 2000 Plan. A maximum of 1,000,000 shares of our common stock are available for issuance and sale under the 2017 Plan. In addition, any shares of our common stock subject to an award granted under the 2017 Plan, or to an award granted under the 2000 Plan that was outstanding on the date our shareholders approved the 2017 Plan, that expires, is cancelled or forfeited, or is settled for cash will, to the extent of such cancellation, forfeiture, expiration or cash settlement, automatically become available for future awards under the 2017 Plan. As of February 1, 2020, there were approximately 650,000 shares of our common stock available for future issuances under our 2017 Plan.

Stock-based compensation includes restricted stock units and performance stock units, restricted stock awards, cash-settled stock appreciation rights (“SARs”), and stock options. During fiscal 2017, all remaining stock options were exercised.

Equity awards issued to employees are classified as either performance-based or service-based. Performance-based awards are granted such that they vest upon the achievement of specified levels of diluted net income per share during a specified performance period. Should the diluted net income per share criteria not be met within the stated period, any shares still restricted are forfeited. Currently, performance-based equity awards are granted such that vesting depends on whether diluted net income per share meets an established threshold, target, or maximum level of performance. Diluted net income per share below the threshold level of performance will result in complete forfeiture of the award.

Service-based restricted stock units and restricted stock awards typically are granted under one of four vesting periods: (a) one-third of the shares would vest on each of the first three anniversaries subsequent to the date of the grant; (b) the full award would vest at the end of a 5-year service period subsequent to the date of grant; (c) the full award would vest at the end of a 2-year service period subsequent to the date of grant; or (d) for our Directors, all restricted stock awards are issued to vest on January 2^nd 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.

Under the 2017 Plan, all dividends paid with respect to shares subject to the non-vested portion of a restricted stock award are subject to the same restrictions and risk of forfeiture as the shares of restricted stock to which such dividends relate. Recipients of restricted stock units and performance stock units will be entitled to receive dividend equivalents, based on dividends actually declared and paid, on the restricted stock units and performance stock units, and such dividend equivalents will be subject to the same restrictions and risk of forfeiture as the restricted stock units and performance stock units. For awards granted under the 2000 Plan, all shares of non-vested service-based restricted stock provide non-forfeitable rights to all dividends declared by the Company, and dividends on non-vested performance-based restricted stock are subject to deferral until such times as the shares vest and are released.

The following table summarizes transactions for our restricted stock units and performance stock units pursuant to our stock-based compensation plans:

	Number of Shares			Weighted- Average Grant Date Fair Value
Restricted stock units and performance stock units at February 2, 2019		202,667		$	24.98
Granted		187,745			31.29
Vested		(98,733	)		24.54
Forfeited		(28,544	)		26.83
Restricted stock units and performance stock units at February 1, 2020		263,135		$	29.44

The total fair value at grant date of restricted stock units and performance stock units that vested during fiscal 2019 and 2018 was $2.4 million and $26,000, respectively. No units vested in fiscal 2017. The weighted-average grant date fair value of restricted stock units and performance stock units granted during fiscal 2018 and fiscal 2017 was $25.05 and $19.55, respectively.

The following table summarizes transactions for our restricted stock awards pursuant to our stock-based compensation plans:

	Number of Shares			Weighted- Average Grant Date Fair Value
Restricted stock at February 2, 2019		825,281		$	23.94
Granted		13,548			26.58
Vested		(726,406	)		23.94
Forfeited		(44,988	)		24.27
Restricted stock at February 1, 2020		67,435		$	24.23

The total fair value at grant date of all restricted stock that vested during fiscal 2019, 2018 and 2017 was $17.4 million, $1.3 million and $3.5 million, respectively. The weighted-average grant date fair value of all restricted stock granted during fiscal 2018 and fiscal 2017 was $32.74 and $24.09, respectively.

The following table summarizes information regarding stock-based compensation expense recognized for all share-settled equity awards (restricted stock awards, restricted stock units and performance stock units):

(In thousands)

2019

2018

2017

Stock-based compensation expense before the

recognized income tax benefit

6,226

9,591

5,041

Income tax benefit

1,346

2,328

2,490

The $9.6 million of expense recognized in fiscal 2018 included a $2.2 million cumulative catch-up of expense recorded in the third quarter of fiscal 2018. This cumulative catch-up expense was related to performance-based restricted stock awards, which management had previously determined were not probable to vest prior to their expiration, but given our financial performance in fiscal 2018, in the third quarter of fiscal 2018, such awards were deemed by management as probable to vest.

As of February 1, 2020, there was approximately $3.0 million of unrecognized compensation expense remaining related to both our restricted stock units and performance stock units and performance-based and service-based restricted stock awards. The cost is expected to be recognized over a weighted average period of approximately 0.7 years. This incorporates our current assumptions with respect to the estimated requisite service period required to achieve the designated performance conditions for performance-based stock awards.

Our cash-settled SARs were granted during the first quarter of fiscal 2019 to certain non-executive employees and will vest and become fully exercisable on March 31, 2020. Any unexercised SARs will expire on March 31, 2022. Each SAR entitles the holder, 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 2019 were issued with a defined maximum gain of $10.00 over the exercise price of $34.95.

During the first quarter of fiscal 2015, SARs were granted to certain non-executive employees, such that one-third of the shares underlying the SARs vested and became fully exercisable on each of the first three anniversaries of the date of the grant and were assigned a five-year term from the date of grant, after which any unexercised SARs would expire. Each SAR entitled the holder, 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 defined maximum gain of $10.00 over the exercise price of $24.26. During the second quarter of fiscal 2018, all remaining SARs granted during the first quarter of fiscal 2015 were exercised.

	Number of Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)
Outstanding at February 2, 2019		0		$	0.00
Granted		43,900			34.95
Forfeited		(700	)		34.95
Exercised		0			0.00
Outstanding at February 1, 2020		43,200		$	34.95		2.2

The fair value of these liability awards will be 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, non-vested SAR awards as of February 1, 2020, was $6.37.

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

	February 1, 2020
Risk free interest rate yield curve	1.30%-1.56		%
Expected dividend yield		0.9	%
Expected volatility		48.63	%
Maximum life	2.2 Years
Exercise multiple		1.29
Maximum payout	$	10.00
Employee exit rate	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 option data.

The following table summarizes information regarding stock-based compensation recognized for SARs:

(In thousands)

2019

2018

2017

Stock-based compensation before the

recognized income tax effect

228

540

(61

)

Income tax effect

131

(30

)

As of February 1, 2020, approximately $47,000 in unrecognized compensation expense remained related to non-vested SARs. This expense is expected to be recognized over a period of approximately 0.2 years.

No stock options have been granted since fiscal 2008. During fiscal 2017, all remaining stock options were exercised. The total intrinsic value (defined as the difference between the market value at exercise and the grant price of stock options exercised) of stock options exercised in fiscal 2017 was $127,000 and total cash received was $54,000.