Stock-Based Compensation

3 Months Ended

Jul. 30, 2011

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:

(Unaudited)	7/30/11
Risk-free interest rate		1.5	%
Dividend rate		0	%
Expected life in years		5.5
Stock price volatility		88.8	%
Turnover rate		4.0	%
Fair value per share	$	6.68

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.