Share-Based Compensation

9 Months Ended

Oct. 29, 2011

Share-Based Compensation [Abstract]

Share-Based Compensation

4. SHARE-BASED COMPENSATION

Share-based compensation expense recognized during the period is based on the value of the portion of share-based payment awards that are ultimately expected to vest. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Currently, the Company's stock-based compensation relates to stock options and deferred stock units. The Company's deferred stock units are issued and measured at fair market value on the date of grant and fully vest on the one year anniversary from the date of grant.

The Company had share-based compensation expense of $0.9 million for the three months ended October 29, 2011 compared to $0.4 million for the three months ended October 30, 2010. Share-based compensation expense for the nine months ended October 29, 2011 and the nine months ended October 30, 2010 was $2.1 million and $1.1 million, respectively. Share-based compensation expense is recorded as a component of selling, general and administrative expenses. As of October 29, 2011, unrecognized compensation cost related to the unvested portion of the Company's stock option awards and deferred stock units was $3.8 million, and $0.3 million, respectively, which is expected to be recognized over a weighted-average period of 2.8 years and 0.8 years, respectively.

The Company granted 53,974 deferred stock units to its non-employee directors during the third quarter of fiscal 2011 compared to no deferred stock units granted during the third quarter of fiscal 2010. No stock options to purchase shares of the Company's common stock were granted during the third quarter of fiscal 2011 compared to 15,000 shares of common stock options granted to the Company's employees during the third quarter of fiscal 2010. The weighted-average fair value per stock option granted was $7.13 during the nine-month period ended October 29, 2011 and $2.80 and $3.37 during the three-month and nine-month periods ended October 30, 2010, respectively. The following table presents the weighted-average assumptions used in the Black-Scholes-Merton option pricing model to value the stock options granted during the three-month and nine-month periods ended October 30, 2010 and the nine-month period ended October 29, 2011:

	Three Months Ended			Nine Months Ended
	October 30, 2010			October 29, 2011			October 30, 2010
Expected dividend rate		0	%		0	%		0	%
Expected volatility		94.6	%		90.0	%		94.1	%
Risk-free interest rate		1.3	%		2.0	%		2.0	%
Expected term (years)		4.5			4.5			4.5