Stock-Based Awards

The Company has certain stock-based compensation plans which provide for the grants of stock-based awards, including stock options, restricted shares, performance shares, restricted share units, performance share units, and stock appreciation rights.

Compensation expense for stock-based awards is based on fair value at the measurement date and fluctuates over time as a result of the vesting period of the stock-based awards and Company’s performance, as measured by criteria set forth in the performance-based awards. Expense is included in general and administrative expenses in the condensed consolidated statements of operations and the amount of expense ultimately recognized is based on the number of awards that actually vest. Accordingly, future stock-based compensation expense may vary from fiscal year to fiscal year.

Stock-based compensation expense and the related tax benefit recognized related to stock options and restricted share units during the three and nine months ended April 23, 2016 and April 25, 2015 were as follows (dollars in thousands):



	For the Three Months Ended				For the Nine Months Ended
	April 23, 2016		April 25, 2015		April 23, 2016		April 25, 2015
Stock-based compensation	$	3,892	$	3,219	$	12,600	$	10,773
Tax benefit recognized in the statement of operations	$	1,467	$	1,248	$	4,809	$	4,221

The performance criteria for targets awards are based on the Company’s fiscal year operating earnings (adjusted for certain amounts) as a percentage of contract revenues and its fiscal year operating cash flow level. Additionally, certain awards include three-year performance goals that, if met, result in supplemental shares awarded. For performance-based restricted share units (“Performance RSUs”), the Company evaluates compensation expense quarterly and recognizes expense for performance-based awards only if it determines it is probable that performance criteria for the awards will be met.

During the nine months ended April 23, 2016, the Company recognized approximately $5.2 million in stock-based compensation expense in connection with certain performance-based target awards related to the fiscal 2016 performance criteria. In addition, during the nine months ended April 23, 2016, the Company recognized approximately $0.3 million in stock-based compensation expense in connection with supplemental shares for the three-year performance period ending fiscal 2016. In the event the Company determines it is no longer probable that it will achieve certain performance criteria for the awards, it would reverse the associated stock-based compensation expense that it had previously recognized in the period such determination is made.

As of April 23, 2016, the Company had total unrecognized compensation expense of $30.3 million related to stock options, time-based restricted share units (“RSUs”) and target Performance RSUs (based on the Company’s estimate of performance goal achievement) of $3.4 million, $9.0 million, and $17.9 million, respectively. This expense will be recognized over a weighted-average number of years of 2.8, 2.8, and 1.6, respectively, based on the average remaining service periods for the awards. As of April 23, 2016, the Company may recognize an additional $6.6 million in compensation expense in future periods if the maximum amount of Performance RSUs is earned based on certain performance goals being met.

Stock Options

The following table summarizes stock option award activity during the nine months ended April 23, 2016:



	Stock Options
	Shares		Weighted Average Exercise Price
Outstanding as of July 25, 2015	915,323		$	16.86
Granted	35,863		$	78.20
Options exercised	(144,756	)	$	12.55
Canceled	(800	)	$	13.88
Outstanding as of April 23, 2016	805,630		$	20.37

Exercisable options as of April 23, 2016	621,858		$	15.42

RSUs and Performance RSUs

The following table summarizes RSU and Performance RSU award activity during the nine months ended April 23, 2016:



	Restricted Stock
	RSUs				Performance RSUs
	Share Units		Weighted Average Grant Price		Share Units		Weighted Average Grant Price
Outstanding as of July 25, 2015	322,008		$	24.46	945,540		$	26.46
Granted	89,977		$	72.06	238,209		$	77.86
Share units vested	(122,910	)	$	23.79	(361,998	)	$	25.28
Forfeited or canceled	(22,928	)	$	24.35	(192,613	)	$	23.15
Outstanding as of April 23, 2016	266,147		$	40.88	629,138		$	47.61

The total amount of granted Performance RSUs presented above consists of 170,304 target shares granted to officers and employees and 67,905 supplemental shares granted to officers of the Company and its subsidiaries. During fiscal 2016, the Company canceled approximately 169,790 supplemental shares of Performance RSUs outstanding as of July 25, 2015, as a result of fiscal 2015 performance criteria for attaining supplemental shares not being met. The total amount of Performance RSUs outstanding as of April 23, 2016 consists of 503,848 target shares and 125,290 supplemental shares.