SHARE-BASED COMPENSATION

6 Months Ended

Apr. 29, 2012

SHARE-BASED COMPENSATION [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 six month periods ended April 29, 2012, of $0.7 million and $1.4 million, respectively, and $0.6 million and $1.1 million for the three and six month periods ended May 1, 2011, respectively. The Company received cash from option exercises of $0.1 million and $0.2 million for the three and six month periods ended April 29, 2012, respectively, and $0.1 million and $0.2 million for the three and six month periods ended May 1, 2011, respectively. No share-based compensation cost was capitalized as part of an asset and no related income tax benefits were recorded during the periods presented.

Stock Options

Option awards generally vest in one to four years, 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 closing prices of the Company's common stock on the dates 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 six month periods ended April 29, 2012 and May 1, 2011, are presented in the following table.

	Three Months Ended				Six Months Ended
	April 29, 2012		May 1, 2011		April 29, 2012		May 1, 2011
Expected volatility		102.2%		98.8%		102.1%		98.7%
Risk free rate of return		0.9%		1.9%		0.7% - 0.9%		1.0% - 1.9%
Dividend yield		N/A		N/A		N/A		N/A
Expected term		4.3 years		4.2 years		4.3 years		4.2 years

Information on outstanding and exercisable option awards as of April 29, 2012, is presented below.

Options	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value
Outstanding at April 29, 2012		4,099,414	$	8.43	6.4 years	$	6,106
Exercisable at April 29, 2012		2,320,526	$	11.17	4.9 years	$	3,236

There were 32,000 share options granted during the three month period ended April 29, 2012, with a grant date fair value of $4.72 per share, and there were 369,250 share options granted during the three month period ended May 1, 2011, with a weighted-average grant date fair value of $4.81 per share. There were 524,500 share options granted during the six month period ended April 29, 2012, with a weighted-average grant date fair value of $4.47 per share and 620,750 share options granted during the six month period ended May 1, 2011, with a weighted-average grant date fair value of $4.75 per share. As of April 29, 2012, the total unrecognized compensation cost related to unvested option awards was approximately $4.3 million. That cost is expected to be recognized over a weighted-average amortization period of 2.8 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 April 29, 2012, and 168,750 restricted stock awards were issued during the six month period ended April 29, 2012, with a weighted-average grant date fair value of $6.28 per share. No restricted stock awards were granted during the three month period ended May 1, 2011, and 176,250 restricted stock awards were issued during the six month period ended May 1, 2011, with a weighted-average grant date fair value of $6.71 per share. As of April 29, 2012, the total compensation cost not yet recognized related to unvested restricted stock awards was approximately $1.7 million. That cost is expected to be recognized over a weighted-average amortization period of 2.6 years. As of April 29, 2012, there were 285,127 shares of restricted stock outstanding.