SHARE-BASED PLANS

We have issued nonqualified stock options, restricted stock awards and performance share units 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 2012 Form 10-K, are expensed and reported as nonvested shares. Our performance share units, as described below, are also expensed and reported as nonvested shares. We recognized share-based compensation expense of $3.2 million and $6.6 million in the second quarter of 2013 and the second quarter of 2012, respectively, and $7.8 million and $14.7 million for the year-to-date 2013 and the year-to-date 2012, 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:



	Second Quarter						Year-to-Date
	2013			2012			2013			2012
Weighted-average fair value of stock options granted	$	11.87		$	13.48		$	12.10		$	14.23
Risk-free interest rate	0.7		%	0.5		%	0.7		%	0.6		%
Expected life (years)	4.2			4.2			4.2			4.2
Expected volatility	41.1		%	43.4		%	42.3		%	41.0		%
Expected annual forfeiture rate	3.0		%	3.0		%	3.0		%	3.0		%

The following table summarizes stock option activity for the year-to-date 2013:



	Number of Options		Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (000's)
Outstanding stock options at February 2, 2013	3,029,086		$	34.49
Granted	851,000		35.72
Exercised	(55,420	)	16.24
Forfeited	(78,675	)	37.72
Outstanding stock options at May 4, 2013	3,745,991		$	34.97	4.8	$	15,650
Granted	164,750		35.94
Exercised	(70,400	)	24.45
Forfeited	(233,650	)	39.03
Outstanding stock options at August 3, 2013	3,606,691		$	34.96	4.7	$	13,814
Vested or expected to vest at August 3, 2013	3,443,036		$	34.77	4.6	$	13,730
Exercisable at August 3, 2013	1,669,689		$	30.66	3.4	$	12,743

The stock options granted in the year-to-date 2013 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 stock award activity other than stock options for the year-to-date 2013:



	Number of Shares		Weighted Average Grant-Date Fair Value Per Share
Outstanding nonvested awards other than stock options at February 2, 2013	783,609		$	42.25
Granted	339,500		35.54
Vested	—		—
Forfeited	(248,300	)	43.75
Outstanding nonvested awards other than stock options at May 4, 2013	874,809		$	39.22
Granted	110,251		35.09
Vested	(39,784	)	35.70
Forfeited	(138,300	)	40.28
Outstanding nonvested awards other than stock options at August 3, 2013	806,976		$	38.64

The nonvested restricted stock awards granted to employees in the year-to-date 2013 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 2013 based on the projected achievement of the higher financial performance objective.

In the second quarter of 2013, 20,784 common shares underlying the restricted stock awards granted in 2012 to the non-employee members of our Board of Directors vested on the trading day immediately preceding our 2013 Annual Meeting of Shareholders. These awards were part of the annual compensation granted in 2012 to the non-employee members of the Board of Directors. Additionally, in the second quarter of 2013, each non-employee elected to our Board of Directors at our 2013 Annual Meeting of Shareholders received an annual restricted stock award having a grant date fair value of approximately $100,000. The 2013 restricted stock awards will vest on the earlier of (1) the trading day immediately preceding our 2014 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.

In the second quarter of 2013, in connection with his appointment as CEO and President, Mr. David J. Campisi was awarded 37,800 performance share units, which vest based on the achievement of share price performance goals. The performance share units have a contractual term of seven years. If the performance goals applicable to the performance share units are not achieved prior to expiration, the awards will be forfeited.

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



	Second Quarter				Year-to-Date
(In thousands)	2013		2012		2013		2012
Total intrinsic value of stock options exercised	$	749	$	953	$	1,789	$	29,075
Total fair value of restricted stock vested	1,434		804		1,434		21,907

The total unearned compensation cost related to all share-based awards outstanding at August 3, 2013 was approximately $43.3 million. This compensation cost is expected to be recognized through July 2017 based on existing vesting terms with the weighted-average remaining expense recognition period being approximately 2.1 years from August 3, 2013.