STOCK OPTIONS AND RESTRICTED STOCK

12 Months Ended

Dec. 31, 2011

STOCK OPTIONS AND RESTRICTED STOCK [Abstract]

STOCK OPTIONS AND RESTRICTED STOCK

STOCK OPTIONS AND RESTRICTED STOCK

        Under The Jones Group Inc. 2009 Long Term Incentive Plan, we may grant stock options and other awards from time to time to key employees, officers, directors, advisors and independent consultants to us or to any of our subsidiaries. Shares available for future option and restricted stock grants at December 31, 2011 and 2010 totaled 3.2 million and 2.5 million, respectively.

        Compensation cost recorded for stock-based employee compensation awards (including awards to non-employee directors) reflected as an SG&A expense was $16.7 million, $22.0 million and $13.0 million for 2011, 2010 and 2009, respectively. The total tax benefit recognized for the compensation cost recorded for stock-based employee compensation awards for 2011, 2010 and 2009 totaled $5.1 million, $8.2 million and $4.6 million, respectively. Total compensation cost related to unvested awards not yet recognized at December 31, 2011 was $15.9 million, which is expected to be amortized over a weighted-average period of approximately 21 months. Cash received from option exercises for 2010 was $0.6 million. No options were exercised in 2009 or 2011.

Stock Options

        In general, options become exercisable over either a three-year or five-year period from the grant date and expire 10 years after the date of grant for options granted on or before May 28, 2003 and seven years after the date of grant thereafter. In certain cases for non-employee directors, options become exercisable six months after the grant date. Our policy is to issue new shares upon the exercise of options and, when possible, to offset these new shares by repurchasing shares in the open market.

        Compensation cost for stock options is based on the fair value of each option award as determined on the date of the grant using the Black-Scholes-Merton option pricing model. Expected volatilities are based on historical volatility of our stock price and implied volatilities from publicly traded options on our stock. We use historical data to estimate an option's expected life; the expected life for grants to senior management-level employees and other employees are considered separately for valuation purposes. The risk-free interest rate input is based on the U.S. Treasury yield curve in effect at the time of the grant. Compensation cost, net of projected forfeitures, is recognized on a straight-line basis over the period between the grant and vesting dates, with compensation cost for grants with a graded vesting schedule recognized on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was, in substance, multiple awards. We did not grant any options in 2009, 2010 or 2011.

        The following tables summarize information about stock option transactions and related information (options in millions):

	2011			2010			2009
	Options		Weighted Average Exercise Price	Options		Weighted Average Exercise Price	Options		Weighted Average Exercise Price
Outstanding, January 1,	4.4		$34.74	6.2		$32.79	7.0		$32.73
Exercised	-		-	(0.1	)	11.81	-		-
Cancelled	(0.1	)	32.87	(0.4	)	32.30	(0.3	)	33.22
Expired	(2.4	)	33.43	(1.3	)	27.35	(0.5	)	31.54
Outstanding, December 31,	1.9		$36.50	4.4		$34.74	6.2		$32.79
Exercisable, December 31,	1.9		$36.50	4.4		$34.74	6.1		$32.74

	2011	2010	2009
Weighted-average contractual term (in years) of:
Options outstanding at end of year	0.2	0.9	1.6
Options exercisable at end of year	0.2	0.9	1.6
Intrinsic value (in millions) of:
Options outstanding at end of year	$  -	$  -	$0.3
Options exercisable at end of year	$  -	$  -	$0.3
Options exercised during the year	$  -	$0.4	$  -
Fair value (in millions) of options vested during the year	$  -	$1.1	$2.1

Restricted Stock

        Compensation cost for restricted stock that vests based upon the passage of time or on the achievement of a performance condition is measured as the excess, if any, of the quoted market price of our stock at the date the common stock is granted over the amount the employee must pay to acquire the stock (which is generally zero). Compensation cost for restricted stock that vests upon the achievement of a performance condition is also based upon the probability that the performance condition will be satisfied. Compensation cost for restricted stock that vests based upon the achievement of a market condition is determined based on a Monte Carlo valuation model and is recognized regardless of whether or not the market condition is satisfied.

        Compensation cost, net of projected forfeitures, is recognized over the period between the issue date and the date any restrictions lapse, with compensation cost for grants with a graded vesting schedule recognized on a straight-line basis over the requisite service period for the total award. Restricted share awards generally vest over a period of approximately three years. The restrictions do not affect voting and dividend rights except for certain grants with performance and market conditions where dividends are paid only to the extent the shares vest.

        The following tables summarize information about unvested restricted stock transactions and related information (shares in millions):

	2011			2010			2009
	Shares		Weighted Average Fair Value	Shares		Weighted Average Fair Value	Shares		Weighted Average Fair Value
Nonvested, January 1,	4.7		$10.79	3.6		$10.33	1.8		$19.78
Granted	2.2		9.82	1.9		15.23	2.1		3.55
Vested	(1.5	)	11.58	(0.6	)	20.48	(0.2	)	28.99
Forfeited	(0.4	)	13.58	(0.2	)	12.73	(0.1	)	11.80
Nonvested, December 31,	5.0		9.91	4.7		$10.79	3.6		$10.33

	2011	2010	2009
Fair value (in millions) of shares vested during the year	$17.4	$13.8	$4.5