SHARE-BASED PLANS

We have issued nonqualified stock options, restricted stock awards, restricted stock units, and performance share units under our shareholder-approved equity compensation plans. Our restricted stock awards and restricted stock units, as described below and/or in note 7 to the consolidated financial statements in our 2013 Form 10-K, are expensed and reported as nonvested shares. We recognized share-based compensation expense of $3.0 million and $3.7 million in the third quarter of 2014 and the third quarter of 2013, respectively, and $8.0 million and $11.5 million for the year-to-date 2014 and the year-to-date 2013, 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
	2013			2013
Weighted-average fair value of stock options granted	$	11.83		$	12.08
Risk-free interest rate	1.1		%	0.7		%
Expected life (years)	4.2			4.2
Expected volatility	39.9		%	42.1		%
Expected annual forfeiture rate	3.0		%	3.0		%

During the year-to-date 2014, we granted no stock options.

The following table summarizes stock option activity for the year-to-date 2014:



	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 1, 2014	3,377,303		$	34.88
Exercised	(243,218	)	26.90
Forfeited	(139,850	)	38.63
Outstanding stock options at May 3, 2014	2,994,235		$	35.35	4.2	$	16,314
Exercised	(464,400	)	36.73
Forfeited	(50,700	)	40.35
Outstanding stock options at August 2, 2014	2,479,135		$	35.00	4.1	$	20,850
Exercised	(541,797	)	25.75
Forfeited	(72,500	)	39.15
Outstanding stock options at November 1, 2014	1,864,838		$	37.52	4.3	$	15,162
Vested or expected to vest at November 1, 2014	1,775,684		$	37.48	4.2	$	14,515
Exercisable at November 1, 2014	895,774		$	36.89	3.5	$	7,845

The stock options granted in prior years 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 non-vested restricted stock awards and restricted stock units activity for the year-to-date 2014:



	Number of Shares		Weighted Average Grant-Date Fair Value Per Share
Outstanding non-vested restricted stock at February 1, 2014	664,101		$	38.34
Granted	281,056		37.12
Vested	(13,500	)	34.75
Forfeited	(99,200	)	40.19
Outstanding non-vested restricted stock at May 3, 2014	832,457		$	37.77
Granted	32,987		42.86
Vested	(23,776	)	33.65
Forfeited	(22,490	)	39.61
Outstanding non-vested restricted stock at August 2, 2014	819,178		$	38.04
Granted	2,012		43.87
Vested	(31,000	)	34.75
Forfeited	(28,990	)	38.84
Outstanding non-vested restricted stock at November 1, 2014	761,200		$	38.16

The non-vested restricted stock units granted in the year-to-date 2014 generally vest on a ratable basis over three years from the grant date of the award, if certain threshold financial performance objectives are achieved and the grantee remains employed by us through the vesting dates.

The non-vested restricted stock awards granted in prior years 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. As of February 1, 2014, we estimated a five-year period for vesting of all non-vested restricted stock awards granted in prior years, as we do not anticipate achieving the higher financial performance objective for any outstanding grants.

In 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, that had a weighted average grant-date fair value per share of $34.68. The performance share units have a contractual term of seven years. In the second quarter of 2014, Mr. Campisi’s first tranche of 12,600 performance share units vested. In the third quarter of 2014, Mr. Campisi’s second tranche of 12,600 performance share units vested. If the performance goals applicable to the remaining performance share units are not achieved prior to expiration, the awards will be forfeited. A total of 12,600 performance share units remain outstanding at November 1, 2014.

In the year-to-date 2014, we issued 434,124 performance share units, net of forfeitures, to certain members of management, which vest if certain financial performance objectives are achieved over a three-year performance period and the grantee remains employed by us during that period. The financial performance objectives for each fiscal year within the three-year performance period are approved by the Compensation Committee of our Board of Directors during the first quarter of the respective fiscal year. As a result of the process used to establish the financial performance objectives, we will only meet the requirements of establishing a grant date for the performance share units when we communicate the financial performance objectives for the third fiscal year of the award to the award recipients, which will then trigger the service inception date, the fair value of the awards, and the associated expense recognition period. Therefore, we have recognized no expense for these issued performance share units in the year-to-date 2014. If we meet the applicable threshold financial performance objectives over the three-year performance period and the grantee remains employed by us through the end of the performance period, the performance share units will vest on the first trading day after we file our Annual Report on Form 10-K three years after the initial issuance of the award.

In the second quarter of 2014, 23,776 common shares underlying the restricted stock awards granted in 2013 to the non-employee members of our Board of Directors vested on the trading day immediately preceding our 2014 Annual Meeting of Shareholders. These awards were part of the annual compensation granted in 2013 to the non-employee members of the Board of Directors. Additionally, in the second quarter of 2014, each non-employee elected to our Board of Directors at our 2014 Annual Meeting of Shareholders received an annual restricted stock award having a grant date fair value of approximately $110,000. The 2014 restricted stock awards will vest on the earlier of (1) the trading day immediately preceding our 2015 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)	2014		2013		2014		2013
Total intrinsic value of stock options exercised	$	11,050	$	625	$	16,980	$	2,414
Total fair value of restricted stock vested	1,325		—		2,736		1,434
Total fair value of performance shares vested	585		—		1,143		—

The total unearned compensation cost related to all share-based awards outstanding at November 1, 2014 was approximately $23.8 million. This compensation cost is expected to be recognized through January 2019 based on existing vesting terms with the weighted-average remaining expense recognition period being approximately 2.0 years from November 1, 2014.