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Stock-Based Compensation
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Jul. 30, 2011
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| Stock-Based Compensation |
Note 7: Stock-Based Compensation
Stock Options. In the first quarter of fiscal 2012, we
granted 0.3 million stock options to
employees. Compensation expense for stock options is
equal to the fair value on the date the award was approved and is
recognized over the service period. The vesting period
for our stock options ranges from one to four years. The
fair value for the employee stock options granted was estimated at
the date of the grant using the Black-Scholes option-pricing model,
which requires management to make certain
assumptions. Expected volatility was estimated based on
the historical volatility of our common shares. The
average expected life was based on the contractual term of the
stock option and expected employee exercise and post-vesting
employment termination trends. The risk-free rate was
based on U.S. Treasury issues with a term equal to the expected
life assumed at the date of the grant. The turnover rate
was estimated at the date of the grant based on historical
experience. The fair value of stock options granted
during the first quarter of fiscal 2012 was calculated using the
following assumptions:
Restricted Shares. We granted 0.2 million restricted shares
to employees during the first quarter of fiscal
2012. Compensation expense for restricted stock is equal
to the market value of our common shares on the date the award was
approved and is recognized over the service period. The
vesting period for our restricted shares is four
years.
Performance Awards. We
granted 0.7 million performance awards in the first quarter of
fiscal 2012. The award opportunity ranges from 50% of
the employee’s target award if minimum performance
requirements are met to a maximum of 200% of the target award based
on the attainment of certain financial goals over a specific
performance period, which is generally three fiscal
years. The shares are offered at no cost to the
employees. The cost of performance awards is expensed
over the service period based on the probability that the
performance goals will be obtained.
Total
compensation expense recognized in the Consolidated Statement of
Operations for all equity based compensation was $1.6 million and
$1.0 million, for the first quarter of fiscal 2012 and fiscal 2011,
respectively.
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