Share-Based Compensation

6 Months Ended

Jul. 28, 2012

Share-Based Compensation

Note 8 – Share-Based Compensation

Under its equity incentive plans, the Company may grant share appreciation awards consisting of stock-settled stock appreciation rights (“stock-settled SARs”), cash-settled stock appreciation rights (“cash-settled SARs”), as well as full value awards in the form of nonvested shares and nonvested share units and phantom stock units (“phantom nonvested share units”).

The Company’s 2006 Stock Incentive Plan (“2006 SIP”) allows the Company to grant a maximum of 4,987,000 shares. On May 24, 2012, the Company’s stockholders approved the 2012 Stock Incentive Plan (“2012 SIP”), which allows the Company to grant an additional 3,375,000 shares. Appreciation awards to be granted under the plans have a maximum term of seven years and can vest on a graded schedule, a cliff basis or based on performance. The exercise price of an appreciation award may not be less than the fair market value of the Company's stock on the grant date. Associates who receive full value awards pay no monetary consideration. Awards under the plans can be granted with or without performance restrictions. Restrictions, including performance restrictions, lapse over periods of up to seven years, as determined at the date of grant.

The number of shares for grants made in the twenty-six weeks ended July 28, 2012 and July 30, 2011 are as follows:

13 Weeks Ended

26 Weeks Ended

July 28, 2012

July 30, 2011

July 28, 2012

July 30, 2011

Share units

Maximum share equivalents

Share units

Maximum Share equivalents

Share units

Maximum share equivalents

Share units

Maximum Share equivalents

Stock-settled SARs(1):

Vest in installments over 3 years

—

—

—

—

—

—

213,141

118,412

⁽¹⁾  All of the stock-settled SARs issued by the Company in the periods presented contain an appreciation cap, which limits the appreciation for which shares of common stock will be granted. The appreciation cap is limited to 125% of the fair market value of the underlying common stock on the grant date of the SAR, meaning that the maximum shares issuable under a SAR is 0.56 shares per SAR.

	13 Weeks Ended				26 Weeks Ended
	July 28, 2012		July 30, 2011		July 28, 2012		July 30, 2011
Nonvested shares and nonvested share units:
Cliff vest after 3 years		2,443		4,031		239,926		160,718
Performance grant—vest in installments over 3 years(2)		814		677		96,849		131,755
Performance grant—cliff vest after 3 years(2)		—		4,880		—		97,463
Phantom nonvested share units:
Cliff vest after 3 years		—		—		7,212		1,350
Performance grant—vest in installments over 3 years(2)		—		—		536		450
Performance grant—cliff vest after 3 years(2)		—		—		—		6,584

⁽²⁾  Certain nonvested shares are subject to a performance condition for vesting. The performance grant vests only if the performance condition is met. As of July 28, 2012, the Company has assessed the likelihood that the performance condition will be met and has recorded the related expense based on the estimated outcome.

The total fair value of share grants for the thirteen weeks ended July 28, 2012 and July 30, 2011 is $0.1 million and $0.1 million, respectively. The total fair value of share grants for the twenty-six weeks ended July 28, 2012 and July 30, 2011 is $6.3 million and $9.6 million, respectively.

Total share-based compensation expense is summarized as follows:

	13 Weeks Ended				26 Weeks Ended
(dollars in millions)	July 28, 2012		July 30, 2011		July 28, 2012		July 30, 2011
Cost of sales	$	0.4	$	1.3	$	1.0	$	2.2
Selling, general and administrative expenses		1.3		3.8		3.1		6.4
Share-based compensation expense	$	1.7	$	5.1	$	4.1	$	8.6

Included in share-based compensation expense for the twenty-six weeks ended July 28, 2012 is $0.8 million of expense that was recognized as a result of the grants made in 2012. No amount of share-based compensation was capitalized. As of July 28, 2012, the Company had unrecognized compensation expense related to nonvested awards of $9.2 million, which is expected to be recognized over a weighted average period of 1.0 years.