SHARE-BASED COMPENSATION

9 Months Ended

Jul. 31, 2011

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

SHARE-BASED COMPENSATION

NOTE 7 - SHARE-BASED COMPENSATION

In March 2007 shareholders approved a new share-based compensation plan ("Plan"), under which options, restricted stock, restricted stock units, stock appreciation rights, performance stock, performance units, and other awards based on, or related to, shares of the Company's common stock may be granted from shares authorized but unissued, or shares previously issued and reacquired by the Company. A maximum of six million shares of common stock may be issued under the Plan. Awards may be granted to officers, employees, directors, consultants, advisors, and independent contractors of the Company or its subsidiaries. In the event of a change in control (as defined in the Plan), the vesting of awards may be accelerated. The Plan, aspects of which are more fully described below, prohibits further awards from being issued under prior plans. The Company incurred total share-based compensation costs for the three and nine month periods ended July 31, 2011, of $0.7 million and $1.8 million, respectively, and $0.5 million and $1.5 million for the three and nine month periods ended August 1, 2010, respectively. The Company received cash from option exercises of $0.2 million and $0.4 million for the three and nine month periods ended July 31, 2011, respectively, and $0.1 million for the nine month period ended August 1, 2010. The Company did not receive any cash from option exercises during the three month period ended August 1, 2010. No share-based compensation cost was capitalized as part of inventory and no related income tax benefits were recorded during the periods presented.

Stock Options

Option awards generally vest over one to four year periods, and have a ten-year contractual term. All incentive and non-qualified stock option grants have an exercise price equal to the market value of the underlying common stock on the date of grant. The grant date fair values of options are based on the closing prices of the Company's common stock on the date of grant using the Black-Scholes option pricing model. Expected volatility is based on the historical volatility of the Company's stock. The Company uses historical option exercise behavior and employee termination data to estimate expected term, which represents the period of time that the options granted are expected to remain outstanding. The risk-free rate of return for the estimated term of the option is based on the U.S. Treasury yield curve in effect at the date of grant. The weighted-average inputs and risk-free rate of return ranges used to calculate the grant date fair value of options issued during the three and nine month periods ended July 31, 2011 and August 1, 2010, are presented in the following table.

	Three Months Ended					Nine Months Ended
	July 31, 2011		August 1, 2010			July 31, 2011			August 1, 2010
Expected volatility		N/A		91.6	%		98.7	%		89.5	%
Risk free rate of return		N/A		1.7	%		1.0% - 1.9	%		1.7% - 2.4	%
Dividend yield		N/A		0.0	%		0.0	%		0.0	%
Expected term		N/A	4.3 years			4.2 years			4.5 years

Information on outstanding and exercisable option awards as of July 31, 2011, is presented below:

Options	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value
Outstanding at July 31, 2011		4,047,441	$	9.32	6.4 years	$	9,642
Exercisable at July 31, 2011		2,055,723	$	14.51	4.4 years	$	2,602

There were no share options granted during the three month period ended July 31, 2011, and there were 80,000 share options granted during the three month period ended August 1, 2010, with a weighted-average grant date fair value of $3.08 per share. There were 620,750 share options granted during the nine month period ended July 31, 2011, with a weighted-average grant date fair value of $4.75 per share and 926,400 share options granted during the nine month period ended August 1, 2010, with a weighted-average grant date fair value of $2.98 per share. As of July 31, 2011, the total unrecognized compensation cost related to non-vested option awards was approximately $3.6 million. That cost is expected to be recognized over a weighted-average amortization period of 2.9 years.

Restricted Stock

The Company periodically grants restricted stock awards. The restrictions on these awards lapse over a service period that has ranged from less-than-one to eight years. No restricted stock awards were granted during the three month period ended July 31, 2011, and 176,250 restricted stock awards were granted during the nine month period ended July 31, 2011, with a weighted-average grant date fair value of $6.71 per share. No restricted stock awards were granted during the nine month period ended August 1, 2010. As of July 31, 2011, the total compensation cost not yet recognized related to unvested restricted stock awards was approximately $1.5 million. That cost is expected to be recognized over a weighted-average amortization period of 2.6 years. As of July 31, 2011, there were 208,577 shares of restricted stock outstanding.