SHARE-BASED PLANS

We have issued nonqualified stock options and restricted stock awards under our shareholder-approved equity compensation plans. Our restricted stock awards, as described below and in note 7 to the consolidated financial statements in our 2011 Form 10-K, are expensed and reported as nonvested shares. We recognized share-based compensation expense of $(0.3) million and $6.2 million in the third quarter of 2012 and the third quarter of 2011, respectively, and $14.4 million and $19.7 million for the year-to-date 2012 and the year-to-date 2011, respectively.

The weighted-average fair value of stock options granted and assumptions used in the model to estimate the fair value of stock options granted during each of the respective periods were as follows:



	Third Quarter						Year-to-Date
	2012			2011			2012			2011
Weighted-average fair value of stock options granted	$	11.67		$	10.92		$	14.16		$	14.44
Risk-free interest rate	0.6		%	1.1		%	0.6		%	1.8		%
Expected life (years)	4.2			4.2			4.2			4.2
Expected volatility	43.2		%	40.9		%	41.1		%	41.7		%
Expected annual forfeiture rate	3.0		%	1.5		%	3.0		%	1.5		%

The following table summarizes stock option activity for the year-to-date 2012:



	Number of Options		Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (000's)
Outstanding stock options at January 28, 2012	3,676,423		$	28.36
Granted	902,000		43.87
Exercised	(1,345,525	)	23.97
Forfeited	(67,325	)	37.06
Outstanding stock options at April 28, 2012	3,165,573		$	34.46	5.2	$	17,625
Granted	48,750		37.59
Exercised	(43,387	)	17.24
Forfeited	(37,500	)	39.00
Outstanding stock options at July 28, 2012	3,133,436		$	34.69	5.0	$	22,437
Granted	25,000		34.27
Exercised	(6,550	)	23.45
Forfeited	(66,250	)	43.51
Outstanding stock options at October 27, 2012	3,085,636		$	34.53	4.7	$	8,090
Vested or expected to vest at October 27, 2012	2,911,921		$	34.34	4.7	$	7,834
Exercisable at October 27, 2012	1,061,322		$	26.54	3.3	$	5,863

The stock options granted in the year-to-date 2012 vest in equal amounts on the first four anniversaries of the grant date and have a contractual term of seven years. The number of stock options expected to vest was based on our annual forfeiture rate assumption.

The following table summarizes the nonvested restricted stock awards activity for the year-to-date 2012:



	Number of Shares		Weighted Average Grant-Date Fair Value Per Share
Outstanding nonvested restricted stock at January 28, 2012	741,289		$	39.40
Granted	525,800		43.85
Vested	(454,800	)	38.79
Forfeited	(6,400	)	39.97
Outstanding nonvested restricted stock at April 28, 2012	805,889		$	42.65
Granted	41,859		37.08
Vested	(22,864	)	33.24
Forfeited	(3,000	)	42.03
Outstanding nonvested restricted stock at July 28, 2012	821,884		$	42.63
Granted	21,500		31.22
Vested	—		—
Forfeited	(55,000	)	43.45
Outstanding nonvested restricted stock at October 27, 2012	788,384		$	42.26

The nonvested restricted stock awards granted to employees in the year-to-date 2012 (other than the award granted to our Chairman, CEO and President, Steven S. Fishman) vest if certain financial performance objectives are achieved. If we meet a threshold financial performance objective and the grantee remains employed by us, the restricted stock will vest on the opening of our first trading window five years after the grant date of the award. If we meet a higher financial performance objective and the grantee remains employed by us, the restricted stock will vest on the first trading day after we file our Annual Report on Form 10-K with the SEC for the fiscal year in which the higher objective is met. On the grant date, we estimated a three-year period for vesting of the nonvested restricted stock awards granted in 2012 based on the projected achievement of the higher financial performance objective.

The nonvested restricted stock award granted to Mr. Fishman in the first quarter of 2012 vests if we achieve a corporate financial goal for 2012 and he is employed by us on March 31, 2013. If either of the conditions is not achieved, the nonvested restricted stock award is forfeited. If both of the conditions are achieved, Mr. Fishman's 2012 nonvested restricted stock award will vest on the later of (1) the first trading day after we file with the SEC our Annual Report on Form 10-K for 2012 or (2) March 31, 2013. During the third quarter of 2012, we changed our estimate from probable to remote on the achievement of the corporate financial goal for Mr. Fishman’s 2012 nonvested restricted stock award. Therefore, the year-to-date share-based compensation expense associated with this award was reversed during the third quarter of 2012.

In the second quarter of 2012, 22,864 common shares underlying the restricted stock awards granted in 2011 to the non-employee members of our Board of Directors vested on the trading day immediately preceding our 2012 Annual Meeting of Shareholders. These awards were part of the annual compensation granted in 2011 to the non-employee members of the Board of Directors. Additionally, in the second quarter of 2012, each non-employee elected to our Board of Directors at our 2012 Annual Meeting of Shareholders received an annual restricted stock award having a grant date fair value of approximately $95,000. The 2012 restricted stock awards will vest on the earlier of (1) the trading day immediately preceding our 2013 Annual Meeting of Shareholders, or (2) the non-employee director’s death or disability. However, the restricted stock award will not vest if the non-employee director ceases to serve on our Board of Directors before either vesting event occurs.

The following activity occurred under our share-based plans during the respective periods shown:



	Third Quarter				Year-to-Date
(in thousands)	2012		2011		2012		2011
Total intrinsic value of stock options exercised	$	96	$	574	$	29,171	$	6,119
Total fair value of restricted stock vested	—		—		21,907		11,618

The total unearned compensation cost related to all share-based awards outstanding at October 27, 2012 was approximately $33.2 million. This compensation cost is expected to be recognized through September 2016 based on existing vesting terms with the weighted-average remaining expense recognition period being approximately 1.9 years from October 27, 2012.