9. Share-Based Compensation

The Company’s 2008 and 2004 Stock Incentive Plans each authorize up to 10,000,000 common shares, which can be granted as RSU’s, unrestricted shares, incentive stock options, nonqualified stock options, PSU’s or as SAR’s. Awards under these plans generally expire seven or ten years from the date of grant, thirty days after termination of employment or six months after the date of death or termination due to disability of the grantee. As of January 31, 2013, there were 6,259,024 and 809,182 common shares available to grant under the 2008 and 2004 Stock Incentive Plans, respectively.

A Lattice Binomial pricing model (“Model”) was used to estimate the fair value of stock options and SAR’s. The Model allows for assumptions such as the risk-free rate of interest, volatility and exercise rate to vary over time reflecting a more realistic pattern of economic and behavioral occurrences. The Company uses historical data on exercise timing to determine the expected life assumption. The risk-free rate of interest for periods within the contractual life of the award is based on U.S. Government Securities Treasury Constant Maturities over the expected term of the equity instrument. The expected volatility is based on a weighted average of the implied volatility and the Company’s most recent historical volatility.

Based on the Company’s historical experience, it has assumed an annualized forfeiture rate of 5% for its unvested share based awards granted during the fiscal years ended January 31, 2013, 2012 and 2011. For share based awards granted in previous years that remain unvested, annualized forfeiture rates of 5% and 2% have been assumed. The Company will record additional expense if the actual forfeiture rate is lower than it estimated, and will record a recovery of prior expense if the actual forfeiture is higher than estimated.

Share-based compensation expense, included in selling, general and administrative expenses in the Consolidated Statements of Income, for the fiscal years ended January 31, 2013, 2012 and 2011 was as follows:


	Fiscal Year Ended January 31,
	2013			2012			2011
Stock Options	$	2,214		$	2,886		$	4,331
Stock Appreciation Rights		2,578			1,111			463
Performance Stock Units (1)(2)		6,124			(959	)		5,929
Restricted Shares		(24	)		30			2

Total	$	10,892		$	3,068		$	10,725

(1)	Includes the reversal of $3,418 of previously recognized compensation expense in fiscal 2013, related to 320,200 PSU’s that will not vest as the achievement of the related performance target is not probable

(2)	Includes the reversal of $8,800 of previously recognized compensation expense in fiscal 2012, related to 1,054,466 PSU’s, granted to a former executive officer of the Company, that will not vest due to the service requirement not being met.

The total tax benefit associated with share-based compensation expense for the fiscal years ended January 31, 2013, 2012 and 2011 was $3,921, $1,058 and $3,700, respectively.

Stock Options

The Company may grant stock options which generally vest over a period of three to five years. Stock options become exercisable over the vesting period in installments determined by the administrator, which can vary depending upon each individual grant. Stock options granted to non-employee directors generally vest over a period of one year. The following weighted average assumptions were used in the Model to estimate the fair value of stock options at the date of grant:


	Fiscal Year Ended January 31,
	2013			2012			2011
Expected life, in years		3.6			3.5			4.3
Risk-free interest rate		0.5	%		0.9	%		1.8	%
Volatility		45.0	%		50.0	%		49.9	%
Dividend rate		—			—			—

The following table summarizes the Company’s stock option activity for the fiscal year ended January 31, 2013:


	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value
Awards outstanding at beginning of year		6,030,650		$	26.86
Granted		100,000			29.92
Exercised		(1,382,760	)		22.18
Forfeited or Expired		(431,150	)		33.09

Awards outstanding at end of year		4,316,740			27.82		2.7	$	64,658
Awards outstanding expected to vest		4,302,980			27.82		2.7	$	62,663

Awards exercisable at end of year		3,870,715		$	27.27		2.6	$	60,098

The following table summarizes other information related to stock options during the years ended January 31, 2013, 2012 and 2011:


	Fiscal Year Ended January 31,
	2013		2012		2011
Weighted-average grant date fair value—per share	$	7.71	$	10.36	$	12.07
Intrinsic value of awards exercised	$	19,544	$	22,615	$	55,100
Net cash proceeds from the exercise of stock options	$	30,671	$	4,136	$	24,129

The Company recognized tax benefits related to stock options of $6,532, $953 and $1,336, for the fiscal years ended January 31, 2013, 2012 and 2011, respectively. Total unrecognized compensation cost of stock options granted but not yet vested, as of January 31, 2013, was $2,391, which is expected to be recognized over the weighted average period of 1.1 years.

Stock Appreciation Rights

The Company may grant SAR’s which generally vest over a five year period. Each vested SAR entitles the holder the right to the differential between the value of the Company’s common share price at the date of exercise and the value of the Company’s common share price at the date of grant. The following weighted average assumptions were used in the Model to estimate the fair value of SAR’s at the date of grant:


	Fiscal Year Ended January 31,
	Fiscal 2013			Fiscal 2012			Fiscal 2011
Expected life, in years		5.0			4.8			5.3
Risk-free interest rate		0.9	%		0.8	%		1.6	%
Volatility		48.2	%		48.8	%		47.9	%
Dividend rate		—			—			—

The following table summarizes the Company’s SAR activity for the fiscal year ended January 31, 2013:


	Awards			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value
Awards outstanding at beginning of year		650,800		$	30.91
Granted		595,000			31.47
Exercised		—			—
Forfeited or Expired		(47,000	)		32.25

Awards outstanding at end of year		1,198,800			31.15		6.7	$	13,966
Awards outstanding expected to vest		1,141,360			31.15		6.7	$	13,268

Awards exercisable at end of year		50,000		$	26.85		6.8	$	798

The weighted-average grant date fair value of SAR’s awarded during the fiscal years ended January 31, 2013, 2012 and 2011 was $11.85, $9.50 and $12.57, per share, respectively. Total unrecognized compensation cost of SAR’s granted, but not yet vested as of January 31, 2013 was $9,163, which is expected to be recognized over the weighted average period of 3.2 years.

Performance Stock Units

The Company may grant PSU’s which vest based on the achievement of various company performance targets and external market conditions. The fair value of the PSU’s are determined using a Monte Carlo simulation. Once the Company determines that it is probable that the performance targets will be met, compensation expense is recorded for these awards. If any of these performance targets are not met, the awards are forfeited. Each PSU is equal to one common share with varying maximum award value limitations. PSU’s typically vest over a five year period.

The following table summarizes the Company’s PSU activity for the fiscal year ended January 31, 2013:


	Shares			Weighted Average Fair Value
Non-vested awards outstanding at beginning of year		2,523,950		$	17.23
Granted		406,190			18.22
Vested		—			—
Forfeited		(330,530	)		16.94

Non-vested awards outstanding at end of year		2,599,610		$	17.42

The weighted-average grant date fair value of PSU’s awarded during the fiscal years ended January 31, 2013, 2012 and 2011 was $18.22, $16.21 and $24.03, per share, respectively. No PSU’s vested during the fiscal years ended January 31, 2013 and January 31, 2012. The aggregate grant date fair value of PSU’s vested during the fiscal year ended January 31, 2011 was $1,060. Unrecognized compensation cost related to non-vested PSU’s as of January 31, 2013 was $24,376 which is expected to be recognized over a weighted average period of 3.0 years.

Restricted Stock Units

The Company may grant RSU’s which vest based on the achievement of specified service and external market conditions. RSU’s typically vest over a three to five year period.

The following table summarizes the Company’s RSU activity for the fiscal year ended January 31, 2013:


	Shares			Weighted Average Fair Value
Non-vested awards outstanding at beginning of year		10,666		$	21.11
Granted		—			—
Vested		—			—
Exercised		—			—
Forfeited / Cancelled		(10,666	)		21.11

Non-vested awards outstanding at end of year		—			—

There were no RSU’s granted during the fiscal year ended January 31, 2013. The weighted-average grant date fair value of RSU’s awarded during the fiscal years ended January 31, 2012 and January 31, 2011 was $20.08 and $36.64, per share, respectively. No RSU’s vested during the fiscal years ended January 31, 2013 and January 31, 2011. The aggregate grant date fair value of RSU’s vested during the fiscal year ended January 31, 2012 was $12. As of January 31, 2013, there were no grants of non-vested RSU’s outstanding.