STOCK OPTIONS AND RESTRICTED STOCK

12 Months Ended

Dec. 31, 2012

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, 2012 and 2011 totaled 2.7 million and 3.2 million, respectively.

Compensation cost recorded for stock-based employee compensation awards (including awards to non-employee directors and consultants) reflected as an SG&A expense was $19.7 million, $16.7 million and $22.0 million for 2012, 2011 and 2010, respectively.  The total tax benefit recognized for the compensation cost recorded for stock-based employee compensation awards for 2012, 2011 and 2010 totaled $6.3 million, $5.1 million and $8.2 million, respectively.  Total compensation cost related to unvested awards not yet recognized at December 31, 2012 was $17.4 million, which is expected to be amortized over a weighted-average period of approximately 26 months.  Cash received from option exercises for 2010 was $0.6 million.  No options were exercised in 2011 or 2012.

Stock Options

In general, options become exercisable over either a three-year or five-year period from the grant date and expire seven years after the date of grant.  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.

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

	2012					2011					2010
	Options			Weighted Average Exercise Price		Options			Weighted Average Exercise Price		Options			Weighted Average Exercise Price
Outstanding, January 1,		1.9		$	36.50		4.4		$	34.74		6.2		$	32.79
Exercised		-			-		-			-		(0.1	)		11.81
Cancelled		-			-		(0.1	)		32.87		(0.4	)		32.30
Expired		(1.9	)		36.50		(2.4	)		33.43		(1.3	)		27.35
Outstanding, December 31,		-		$	-		1.9		$	36.50		4.4		$	34.74
Exercisable, December 31,		-		$	-		1.9		$	36.50		4.4		$	34.74

	2012		2011		2010
Weighted-average contractual term (in years) of:
Options outstanding at end of year		-		0.2		0.9
Options exercisable at end of year		-		0.2		0.9
Intrinsic value (in millions) of:
Options outstanding at end of year	$	-	$	-	$	-
Options exercisable at end of year	$	-	$	-	$	-
Options exercised during the year	$	-	$	-	$	0.4
Fair value (in millions) of options vested during the year	$	-	$	-	$	1.1

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):

	2012					2011					2010
	Shares			Weighted Average Fair Value		Shares			Weighted Average Fair Value		Shares			Weighted Average Fair Value
Nonvested, January 1,		5.0		$	9.91		4.7		$	10.79		3.6		$	10.33
Granted		3.2			7.69		2.2			9.82		1.9			15.23
Vested		(1.5	)		7.19		(1.5	)		11.58		(0.6	)		20.48
Forfeited		(0.8	)		6.87		(0.4	)		13.58		(0.2	)		12.73
Nonvested, December 31,		5.9		$	9.80		5.0		$	9.91		4.7		$	10.79

	2012		2011		2010
Fair value (in millions) of shares vested during the year	$	10.9	$	17.4	$	13.8