Note 5 - Stock-Based Compensation

Stock-based compensation includes stock options, cash-settled stock appreciation rights (SARs) and restricted stock awards. Additionally, we recognize stock-based compensation expense for the discount on shares sold to employees through our employee stock purchase plan. For the thirteen and thirty-nine weeks ended November 1, 2014, stock-based compensation expense for the employee stock purchase plan was $8,000 before the income tax benefit of $3,000 and $28,000 before the income tax benefit of $11,000, respectively. For the thirteen and thirty-nine weeks ended November 2, 2013, stock-based compensation expense for the employee stock purchase plan was $7,000 before the income tax benefit of $3,000 and $29,000 before the income tax benefit of $11,000, respectively.

The following table summarizes the share transactions for our restricted stock awards:

	Number of Shares			Weighted- Average Grant Date Fair Value
Restricted stock at February 1, 2014		525,259		$	19.84
Granted		212,060			25.55
Vested		(2,416	)		22.54
Forfeited		(16,400	)		21.71
Restricted stock at November 1, 2014		718,503		$	21.47

The weighted-average grant date fair value of stock awards granted during the thirty-nine-week periods ended November 1, 2014 and November 2, 2013 was $25.55 and $20.80, respectively. The total fair value at grant date of previously non-vested stock awards that vested during the first nine months of fiscal 2014 was $54,000. The total fair value at grant date of previously non-vested stock awards that vested during the first nine months of fiscal 2013 was $2.3 million.

The following section summarizes information regarding stock-based compensation expense recognized for restricted stock awards:

(In thousands)	Thirteen Weeks Ended November 1, 2014			Thirteen Weeks Ended November 2, 2013		Thirty-nine Weeks Ended November 1, 2014		Thirty-nine Weeks Ended November 2, 2013
Stock-based compensation expense before the recognized income tax benefit	$	(1,555	)	$	719	$	259	$	2,425
Income tax benefit	$	(608	)	$	278	$	102	$	926

During the third quarter of fiscal 2014, we recognized a $1.6 million reduction in expense, which was comprised of stock-based compensation expense of $732,000 offset by an expense reversal of $2.3 million. The reduction in expense was attributable to our reversal of our cumulative prior period expense for performance-based awards, which were deemed by management as not probable of vesting prior to their expiration.

As of November 1, 2014, approximately $8.1 million of unrecognized compensation expense remained related to both our performance-based and service-based restricted stock awards. The cost is expected to be recognized over a weighted average period of approximately 3.5 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.

The following table summarizes the SARs activity:

	Number of Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)
Outstanding at February 1, 2014		78,750		$	17.17
Granted		0			0.00
Forfeited		0			0.00
Exercised		(37,750	)		17.17
Outstanding at November 1, 2014		41,000		$	17.17		2.24

Exercisable at November 1, 2014		1,625		$	17.17		2.24

The fair value of these liability awards are 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 was $3.61 as of November 1, 2014.

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

(In thousands)	Thirteen Weeks Ended November 1, 2014		Thirteen Weeks Ended November 2, 2013		Thirty-nine Weeks Ended November 1, 2014		Thirty-nine Weeks Ended November 2, 2013
Stock-based compensation expense before the recognized income tax benefit	$	26	$	59	$	5	$	208
Income tax benefit	$	10	$	23	$	2	$	79

As of November 1, 2014, approximately $14,000 in unrecognized compensation expense remained related to non-vested SARs. This expense is expected to be recognized over a weighted-average period of approximately 0.3 years.