Stock-Based Compensation (Tables)

6 Months Ended

Jul. 28, 2012

Summary of Stock Options Outstanding under All Plans

The following table summarizes stock options outstanding under all of our plans as of the end of the second quarter of fiscal 2012, as well as activity during fiscal year-to-date 2012:

	Options			Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding at January 28, 2012		5,890,439		$	9.29
Granted		1,683,354		$	9.68
Exercised		(152,501	)	$	5.62
Forfeited or expired		(391,247	)	$	13.73
Outstanding at July 28, 2012		7,030,045		$	9.21		7.23	$	12,951
Exercisable at July 28, 2012		3,032,067		$	11.03		5.15	$	5,282

Cash Proceeds, Tax Benefits and Intrinsic Values Related to Stock Options Exercised

Cash proceeds, tax benefits and intrinsic values related to total stock options exercised during the second quarter of fiscal 2012 and 2011 and during fiscal year-to-date 2012 and 2011 are provided in the following table (in thousands):

	Three Months Ended				Six Months Ended
	July 28, 2012		July 30, 2011		July 28, 2012		July 30, 2011
Proceeds from stock options exercised	$	208	$	494	$	857	$	942
Tax benefit related to stock options exercised	$	49	$	44	$	265	$	88
Intrinsic value of stock options exercised	$	123	$	110	$	663	$	220

Effect of Recording Stock-Based Compensation

The effect of recording stock-based compensation for the second quarter of fiscal 2012 and 2011 and for fiscal year-to-date 2012 and 2011 was as follows (in thousands):

	Three Months Ended						Six Months Ended
	July 28, 2012			July 30, 2011			July 28, 2012			July 30, 2011
Stock-based compensation by type of award:
Employee and director stock options and awards	$	1,012		$	1,824		$	1,967		$	2,646
Non-employee stock award		13			-			17			-
Employee stock purchase plan		42			39			84			78
Total stock-based compensation expense		1,067			1,863			2,068			2,724
Tax effect on stock-based compensation expense		(385	)		(711	)		(747	)		(1,019	)
Net effect on net income or loss	$	682		$	1,152		$	1,321		$	1,705

Monte Carlo Simulation Valuation Model

Weighted Average Assumptions used for Stock Options Granted

The following weighted average assumptions were used in the Monte Carlo simulation valuation model for the stock options granted in March 2011 that are subject to the vesting determination:

Risk free interest rate	4%
Contractual life	10 years
Expected volatility	58%
Expected dividend yield	5%
Weighted average fair value at grant date	$2.06

Black-Scholes Option Valuation Model

Weighted Average Assumptions used for Stock Options Granted

The following weighted average assumptions were used in the Black-Scholes option valuation model for stock options granted:

	Three Months Ended						Six Months Ended
	July 28, 2012			July 30, 2011			July 28, 2012			July 30, 2011
Risk free interest rate		1	%		2	%		1	%		2	%
Expected life	5 years			5 years			5 years			5 years
Expected volatility		58	%		58	%		57	%		58	%
Expected dividend yield		3	%		4	%		4	%		5	%
Weighted average fair value at grant date (with the exception of Lisa Harper’s 100,000 stock options granted in March 2012 that are subject to the performance condition)	$	3.77		$	2.68		$	3.50		$	2.10