EQUITY PLANS

The Company has three equity incentive plans: the 2002 Stock Incentive Plan (the "2002 Plan"), the 2004 Equity Incentive Plan, as amended (the "2004 Plan"), and the 2012 Equity Incentive Plan, as amended and restated (the "2012 Plan") (collectively, the "Plans"). Prior to the expiration of the applicable plan, these shares may be used to issue stock options, restricted stock, restricted stock units or performance based awards to employees, officers, directors and others. The maximum term of all incentive and non-statutory stock options or share awards granted under the Plans is 4 years. There were 2,800,000 shares authorized for grant under the 2002 Plan and 1,250,000 shares authorized for grant under the 2012 Plan, which was amended in fiscal 2016 and further amended in fiscal 2018 to increase shares available for issuance by 2,000,000 and 1,800,000 shares, respectively. As of July 28, 2018, 2,676,949 shares were available for grant under the 2012 Plan. The authorization for new grants under the 2002 Plan and 2004 Plan has expired.

The Company recognized total share-based compensation expense of $25.8 million for the fiscal year ended July 28, 2018, compared to $25.7 million and $15.3 million for the fiscal years ended July 29, 2017 and July 30, 2016, respectively. The total income tax benefit for share-based compensation arrangements was $6.5 million, $10.0 million, and $6.1 million, for the fiscal years ended July 28, 2018, July 29, 2017 and July 30, 2016, respectively.

Share-based compensation expense related to performance-based share awards was $5.6 million and $9.0 million for the fiscal years ended July 28, 2018 and July 29, 2017, respectively. For the fiscal year ended July 30, 2016, the Company did not record share-based compensation expense related to performance-based share awards, including compensation expense related to performance units with vestings tied to the Company's performance in fiscal 2016, as a result of performance measures not being attained at the end of the fiscal year and the resulting forfeiture of these awards.

Vesting requirements for awards under the Plans are generally at the discretion of the Company's Board of Directors, or the Compensation Committee thereof, and for time vesting awards are typically four equal annual installments for employees and two equal installments for non-employee directors with the first installment on the date of grant and the second installment on the six month anniversary of the grant date. As of July 28, 2018, there was $36.0 million of total unrecognized compensation cost related to outstanding share-based compensation arrangements (including stock options, restricted stock units and performance-based restricted stock units). This cost is expected to be recognized over a weighted-average period of 2.3 years.

Restricted Stock Units

The fair value of restricted stock units and performance share units are determined based on the number of units granted and the quoted price of the Company's common stock as of the grant date. The following summary presents information regarding restricted stock units and performance units under the Plans as of July 28, 2018 and changes during the fiscal year then ended:



	Number of Shares		Weighted Average Grant-Date Fair Value
Outstanding at July 29, 2017	1,270,111		$	44.56
Granted	716,952		$	40.06
Vested	(434,730	)	$	47.24
Forfeited	(207,731	)	$	41.38
Outstanding at July 28, 2018	1,344,602		$	41.78

The total intrinsic value of restricted stock units vested was $12.4 million, $10.5 million and $12.3 million during the fiscal years ended July 28, 2018, July 29, 2017 and July 30, 2016, respectively.

During fiscal 2018, the Company granted 109,100 performance share units to its executives (subject to the issuance of 109,100 additional shares if the Company's performance exceeds specified targeted levels) with a weighted average grant-date fair value of $39.74. All of the performance units are tied to the Company's performance in the fiscal year ending August 3, 2019.

During fiscal 2017, the Company granted 397,242 performance share units to its executives (subject to the issuance of 221,242 additional shares if the Company's performance exceeds specified targeted levels) with a weighted average grant-date fair value of $40.82 tied to the Company's performance in fiscal years 2017, 2018 and 2019. As of the fiscal year ended July 29, 2017, 150,396 of these performance share units vested, based on the Company's earnings per diluted share, adjusted EBITDA, and adjusted ROIC with an estimated intrinsic value of approximately $5.7 million using the Company's stock price as of July 28, 2017. As of the fiscal year ended July 28, 2018, 111,860 performance units vested based on the Company's earnings per diluted share, adjusted EBITDA, and adjusted ROIC with an intrinsic value of approximately $3.6 million using the Company stock price as of July 27, 2018. As of July 28, 2018, there are 75,000 performance share units outstanding that are tied to the Company's performance in the fiscal year ending August 3, 2019.

No performance share units vested during the fiscal year ended July 30, 2016.

Stock Options

The fair value of stock option grants was estimated at the date of grant using the Black-Scholes option pricing model. Black-Scholes utilizes assumptions related to volatility, the risk-free interest rate, the dividend yield and expected life. Expected volatilities utilized in the model are based on the historical volatility of the Company's stock price. The risk-free interest rate is derived from the U.S. Treasury yield curve in effect at the time of grant. The model incorporates exercise and post-vesting forfeiture assumptions based on an analysis of historical data. The expected term is derived from historical information and other factors.

The Company did not grant stock options in fiscal 2018 or 2017. The following summary presents the weighted average assumptions used for stock options granted in fiscal 2016:



	Fiscal year ended
		July 30, 2016
Expected volatility		27.5	%
Dividend yield		—	%
Risk free interest rate		1.3	%
Expected term (in years)		4.0

The following summary presents information regarding outstanding stock options as of July 28, 2018 and changes during the fiscal year then ended with regard to options under the Plans:



	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at beginning of year	328,689		$	49.52
Exercised	(37,012	)	$	26.34
Outstanding at end of year	291,677		$	52.46	4.4 years	$	200,391
Exercisable at end of year	262,235		$	51.92	4.2 years	$	200,391

The weighted average grant-date fair value of options granted during the fiscal year ended July 30, 2016 was $15.59. The aggregate intrinsic value of options exercised during the fiscal years ended July 28, 2018, July 29, 2017, and July 30, 2016, was $0.7 million, $0.1 million and $2.6 million, respectively.