15.	SHARE-BASED PLANS

The Company has share-based incentive compensation plans under which certain officers, employees and members of the Board of Directors are participants and may be granted stock options, restricted stock and stock performance awards.

ASC 718, Compensation – Stock Compensation, and ASC 505, Equity, require companies to recognize compensation expense in an amount equal to the fair value of all share-based payments granted to employees over the requisite service period for each award. In certain limited circumstances, the Company’s incentive compensation plan provides for accelerated vesting of the awards, such as in the event of a change in control, qualified retirement, death or disability. The Company has a policy of issuing treasury shares in satisfaction of share-based awards.

Share-based compensation expense of $6.5 million, $5.6 million and $6.1 million was recognized in 2012, 2011 and 2010, respectively, as a component of selling and administrative expenses. The following table details the share-based compensation expense by plan and the total related income tax benefit for 2012, 2011 and 2010:



($ thousands)	2012			2011		2010
Expense for share-based compensation plans:
Stock options	$	215	$	513	$	824
Stock performance awards		328		471		1,243
Restricted stock grants		5,946		4,649		4,077
Total share-based compensation expense		6,489		5,633		6,144
Less: Income tax benefit		2,507		2,107		2,082
Total share-based compensation expense, net of income tax benefit	$	3,982	$	3,526	$	4,062

The Company issued 925,676, 559,401 and 546,300 shares of common stock in 2012, 2011 and 2010, respectively, for restricted stock grants, stock options exercised and stock performance awards issued to employees and common and restricted stock grants issued to directors. There were no significant modifications to any share-based awards in 2012, 2011 or 2010.

Stock Options

Stock options are granted to employees at exercise prices equal to the quoted market price of the Company’s stock at the date of grant. Stock options generally vest over four years and have a term of 10 years. Compensation cost for all stock options is recognized over the requisite service period for each award. No dividends are paid on unexercised options. Expense for stock options is recognized on a straight-line basis separately for each vesting portion of the stock option award.

The Company granted 26,000, 111,500 and 143,000 stock options during 2012, 2011 and 2010, respectively. Fair values of options granted in 2012, 2011 and 2010 were estimated using the Black-Scholes option-pricing model based on the following assumptions:



	2012		2011		2010
Dividend yield		3.1%		2.2%		2.0%
Expected volatility		66.5%		62.9%		59.8%
Risk-free interest rate		1.4%		2.5%		2.9%
Expected term (in years)		7		7		7

Dividend yields are based on historical dividend yields. Expected volatilities are based on historical volatilities of the Company’s common stock. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected term of the options. The expected term of options represents the weighted-average period of time that options granted are expected to be outstanding, giving consideration to vesting schedules and the Company’s historical exercise patterns.

Summarized information about stock options outstanding and exercisable at February 2, 2013 is as follows:



	Outstanding				Exercisable
		Weighted-	Weighted-			Weighted-
	Number	Average	Average		Number	Average
	of	Remaining	Exercise		of	Exercise
Exercise Price Range	Options	Life (Years)	Price		Options	Price
$3.33 – $8.65	127,700	7	$	4.07	60,625	$	3.83
$8.66 – $13.97	163,406	4		10.75	109,281		11.19
$13.98 – $19.29	774,548	3		15.75	706,548		15.87
$19.30 – $24.61	140,906	3		21.38	140,906		21.38
$24.62 – $29.93	3,000	4		24.97	3,000		24.97
$29.94 – $35.25	80,247	4		35.25	80,247		35.25
	1,289,807	3	$	15.81	1,100,607	$	16.88

The weighted-average remaining contractual term of stock options outstanding and currently exercisable at February 2, 2013 was 3.4 years and 2.7 years, respectively. The aggregate intrinsic value of stock options outstanding and currently exercisable at February 2, 2013 was $3.9 million and $2.4 million, respectively. Intrinsic value for stock options is calculated based on the exercise price of the underlying awards as compared to the quoted price of the Company’s common stock as of the reporting date.

The following table summarizes stock option activity for 2012 under the current and prior plans:



		Number of	Weighted-Average
	Options		Exercise Price
Outstanding at January 28, 2012		1,662,610	$	15.79
Granted		26,000		9.18
Exercised		(139,243)		10.10
Forfeited		(253,935)		18.43
Canceled or expired		(5,625)		8.04
Outstanding at February 2, 2013		1,289,807	$	15.81
Exercisable at February 2, 2013		1,100,607	$	16.88

The intrinsic value of stock options exercised was $0.5 million, $0.4 million and $1.1 million for 2012, 2011 and 2010, respectively. The amount of cash received from the exercise of stock options was $0.9 million in each of 2012, 2011 and 2010. In addition, 33,033, 349 and 7,124 shares were tendered by employees in satisfaction of the exercise price of stock options during 2012, 2011 and 2010, respectively. The tax impact associated with stock options exercised was less than $0.1 million for 2012, less than $0.1 million for 2011, and $0.2 million for 2010.

The following table summarizes nonvested stock option activity for 2012 under the current and prior plans:



	Number of		Weighted-Average
	Nonvested		Grant Date
	Options		Fair Value
Nonvested at January 28, 2012		278,275	$	5.26
Granted		26,000		5.46
Vested		(95,350)		5.18
Forfeited		(19,725)		6.50
Nonvested at February 2, 2013		189,200	$	5.07

The weighted-average grant date fair value of stock options granted for 2012, 2011 and 2010 was $5.46, $6.83 and $7.48, respectively. The total grant date fair value of stock options vested during 2012, 2011 and 2010 was $0.5 million, $0.9 million and $1.3 million, respectively. As of February 2, 2013, the total remaining unrecognized compensation cost related to nonvested stock options amounted to $0.3 million, which will be amortized over the weighted-average remaining requisite service period of 2.4 years.

Restricted Stock

Under the Company’s incentive compensation plans, restricted stock of the Company may be granted at no cost to certain officers, key employees and directors. Plan participants are entitled to cash dividends and voting rights for their respective shares. Restrictions limit the sale or transfer of these shares during the requisite service period, which generally ranges from one to eight years. Expense for restricted stock grants is recognized on a straight-line basis separately for each vesting portion of the stock award based upon fair value of the award on the date of grant. The fair value of the restricted stock grants is the quoted market price for the Company’s common stock on the date of grant.

The following table summarizes restricted stock activity for the year ended February 2, 2013:



	Number of		Weighted-Average
	Nonvested		Grant Date
	Restricted Shares		Fair Value
Nonvested at January 28, 2012		1,850,297	$	11.09
Granted		759,400		9.71
Vested		(330,072)		14.43
Forfeited		(169,300)		11.39
Nonvested at February 2, 2013		2,110,325	$	10.14

For the years ended February 2, 2013, January 28, 2012 and January 29, 2011, restricted shares granted were 759,400, 656,350 and 565,864, respectively. Restricted shares forfeited during 2012, 2011 and 2010 were 169,300, 186,350 and 100,719, respectively. The weighted-average fair value of restricted stock awards granted for the years ended February 2, 2013, January 28, 2012, and January 29, 2011, was $9.71, $13.78 and $13.97, respectively. The total grant date fair value of restricted stock awards vested during the years ended February 2, 2013, January 28, 2012 and January 29, 2011, was $4.8 million, $3.4 million and $4.4 million, respectively. As of February 2, 2013, the total remaining unrecognized compensation cost related to nonvested restricted stock grants amounted to $10.2 million, which will be amortized over the weighted-average remaining requisite service period of 1.7 years.

The Company recognized $0.9 million and $1.0 million in 2012 and 2011, respectively, of excess tax benefits related to restricted stock vesting and dividends, which was reflected as an increase to additional paid-in capital. During 2010, the Company recognized $0.3 million, of excess tax deficiencies related to restricted stock vesting and dividends, which was reflected as a decrease to additional paid-in capital.

Restricted Stock Units for Non-Employee Directors

Equity-based grants may be made to non-employee directors in the form of cash-equivalent restricted stock units (“RSUs”) at no cost to the non-employee director. The RSUs are subject to a vesting requirement (usually one-year), earn dividend equivalent units and are payable in cash on the date the director terminates service or such earlier date as a director may elect, subject to restrictions, based on the then-current fair value of the Company’s common stock. Dividend equivalents are paid on outstanding RSUs at the same rate as dividends on the Company’s common stock, are automatically re-invested in additional RSUs and vest immediately as of the payment date for the dividend. Expense related to the initial grant of RSUs is recognized ratably over the vesting period based upon the fair value of the RSUs, as remeasured at the end of each period. Expense for the dividend equivalents is recognized at fair value immediately. Gains and losses resulting from changes in the fair value of the RSUs subsequent to the vesting period and through the settlement date are reported in the Company’s consolidated statements of earnings.

The following table summarizes restricted stock unit activity for the year ended February 2, 2013:



		Outstanding			Accrued⁽¹⁾	Nonvested RSUs
		Number of	Number of	Total	Total	Weighted-Average
		Vested	Nonvested	Number	Number	Grant Date
		RSUs	RSUs	of RSUs	of RSUs	Fair Value
	January 28, 2012	165,338	65,975	231,313	209,321	$	10.41
	Granted ⁽²⁾	4,377	68,215	72,592	50,325		11.94
	Vested	67,390	(67,390)	–	21,992		10.47
	Settled	(6,432)	–	(6,432)	(6,432)		16.31
	February 2, 2013	230,673	66,800	297,473	275,206	$	11.91
⁽¹⁾	Accrued RSUs include all fully vested awards and a pro-rata portion of nonvested awards based on the elapsed portion of the vesting period.
⁽²⁾	Granted RSUs include 5,792 RSUs resulting from dividend equivalents paid on outstanding RSUs, of which 4,377 related to outstanding vested RSUs and 1,415 related to outstanding nonvested RSUs.

Information about RSUs granted, vested and settled during 2012, 2011 and 2010 is as follows:



	($ thousands, except per unit amounts)	2012		2011		2010
	Weighted-average grant date fair value of RSUs granted⁽¹⁾	$	12.04	$	10.31	$	16.46
	Fair value of RSUs vested		1,156		601		534
	RSUs settled		6,432		47,796		–
⁽¹⁾	Includes dividend equivalents granted on outstanding RSUs, which vest immediately.

The following table details the RSU compensation expense and the total related income tax benefit for 2012, 2011 and 2010:



($ thousands)	2012		2011		2010
Compensation expense	$	2,769	$	159	$	798
Income tax benefit		(1,077)		(62)		(310)
Compensation expense, net of income tax benefit	$	1,692	$	97	$	488

The aggregate intrinsic value of RSUs outstanding and currently vested at February 2, 2013 is $5.1 million and $4.0 million, respectively. Aggregate intrinsic value for RSUs is calculated based on the average of the high and low prices of the Company’s common stock as of the reporting date. As of February 2, 2013 and January 28, 2012, the liabilities associated with the accrued RSUs totaled $4.7 million and $2.0 million, respectively.

Stock Performance Awards

Under the Company’s incentive compensation plans, common stock or cash may be awarded at the end of the performance period at no cost to certain officers and key employees if certain financial goals are met. Under the plan, employees are granted stock performance awards at a target number of shares, which cliff-vest generally over a three-year service period. At the end of the three-year period, the employee will be given an amount of shares between 0% and 200% of the targeted award, depending on the achievement of specified financial goals for the three-year period. Beginning in 2012, stock performance awards will only settle in cash.

Expense for stock performance awards is recognized based upon the fair value of the awards on the date of grant and the anticipated number of shares or cash to be awarded on a straight-line basis over the three-year service period. The fair value of the stock performance awards is the quoted market price for the Company’s common stock on the date of grant. The Company had nonvested outstanding stock performance awards for 222,325 shares at a 60% target level as of February 2, 2013, which may result in the issuance of up to 382,525 shares at the end of the service periods.

The following table summarizes stock performance activity for the year ended February 2, 2013:



	Number of		Number of		Weighted-
	Nonvested Stock Performance Awards at		Nonvested Stock Performance Awards		Average Grant Date
	Target Level		at Maximum Level		Fair Value
Nonvested at January 28, 2012		285,750		428,625	$	14.56
Granted		104,325		208,650		9.46
Vested		(140,000)		(210,000)		13.99
Expired		–		–		–
Forfeited		(27,750)		(44,750)		13.34
Nonvested at February 2, 2013		222,325		382,525	$	12.67

The weighted-average grant-date fair value of stock performance awards granted for 2012, 2011, and 2010 was $9.46, $15.20, and $13.99, respectively. Stock performance awards of 140,000 and 323,500 vested in 2012 and 2011, respectively, and no awards vested in 2010. As of February 2, 2013, the remaining unrecognized compensation cost related to nonvested stock performance awards was $1.6 million.