STOCK-BASED COMPENSATION

The following table summarizes the Company’s stock-based compensation expense:



	Thirteen Weeks Ended				Twenty-six Weeks Ended
	July 29, 2017		July 30, 2016		July 29, 2017		July 30, 2016
	(In thousands)
Deferred Awards	$	2,661	$	2,121	$	5,926	$	4,427
Performance Awards	4,160		3,966		8,554		8,204
Total stock-based compensation expense ⁽¹⁾	$	6,821	$	6,087	$	14,480	$	12,631

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⁽¹⁾	During the Second Quarter 2017 and the Second Quarter 2016, approximately $1.0 million and $0.9 million, respectively, were included in cost of sales. During Year-To-Date 2017 and Year-To-Date 2016, approximately $2.0 million and $1.5 million, respectively, were included in cost of sales. All other stock-based compensation is included in selling, general and administrative expenses.

The Company recognized a tax benefit related to stock-based compensation expense of approximately $5.6 million and $5.0 million during Year-To-Date 2017 and Year-To-Date 2016, respectively.

Awards Granted During Year-To-Date 2017

The Company granted Deferred Awards and Performance Awards to various executives and members of our Board of Directors during Year-To-Date 2017. Awards were also granted in connection with new hires and contractual obligations. Generally, the Deferred Awards have a three year vesting period with one third of the award vesting annually. Generally, the Deferred Awards granted to members of the Board of Directors vest after one year. Performance Awards granted during Year-To-Date 2017 have a three-year performance period, and, if earned, vest upon completion of the three-year performance period. Depending on the cumulative adjusted earnings per share achieved for the three-year performance period, adjusted operating margin expansion achieved for the three-year performance period and adjusted return on invested capital achieved as of the end of fiscal 2019, the percentage of Target Shares earned range from 0% to 200%.

Changes in the Company’s Unvested Stock Awards during Year-To-Date 2017

Deferred Awards



	Number of Shares		Weighted Average Grant Date Fair Value
	(In thousands)
Unvested Deferred Awards, beginning of period	469		$	61.19
Granted	191		110.81
Vested	(178	)	60.94
Forfeited	(30	)	74.15
Unvested Deferred Awards, end of period	452		$	81.39

Total unrecognized stock-based compensation expense related to unvested Deferred Awards approximated $26.4 million as of July 29, 2017, which will be recognized over a weighted average period of approximately 2.3 years.

Performance Awards



	Number of Shares ⁽¹⁾		Weighted Average Grant Date Fair Value
	(In thousands)
Unvested Performance Awards, beginning of period	515		$	68.11
Granted	161		114.40
Shares earned in excess of target	192		50.97
Vested shares, including shares vested in excess of target	(286	)	50.97
Forfeited	(27	)	81.66
Unvested Performance Awards, end of period	555		$	83.76

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⁽¹⁾	For those awards in which the performance period is complete, the number of unvested shares is based on actual shares that will vest upon completion of the service period.

For those awards in which the performance period is not yet complete, the number of unvested shares in the table above is based on the participants earning their Target Shares at 100%. However, the cumulative expense recognized reflects changes in estimated adjusted earnings per share, adjusted operating margin expansion, and adjusted return on invested capital as they occur. Total unrecognized stock-based compensation expense related to unvested Performance Awards approximated $38.5 million as of July 29, 2017, which will be recognized over a weighted average period of approximately 2.0 years.