Stock Options and Stock Awards

9 Months Ended

Dec. 01, 2012

Stock Options and Stock Awards

Stock Options and Stock Awards

8. Stock Options and Stock Awards

        The Company recognizes stock-based compensation expense over the requisite service period of the award, net of an estimate for the impact of forfeitures. Operating results for the thirty-nine week periods ended December 1, 2012 and November 26, 2011 include $12,872 and $11,612, respectively, of compensation costs related to the Company's stock-based compensation arrangements.

        The total number and type of newly awarded grants and the related weighted average fair value for the thirty-nine week periods ended December 1, 2012 and November 26, 2011 are as follows:

	December 1, 2012				November 26, 2011
	Shares		Weighted Average Fair Value		Shares		Weighted Average Fair Value
Stock options granted		12,020	$	0.91		17,889	$	0.82
Stock awards granted		5,450	$	1.31		8,526	$	1.23
Total awards		17,470				26,415

        Typically, stock options granted vest, and are subsequently exercisable in equal annual installments over a four-year period for employees. During fiscal 2012, certain employee stock options and awards were issued that vest 50% in year 3 and 50% in year four. Stock awards granted to non-employee directors vest 80% in year one, 10% in year two and 10% in year three.

        The Company calculates the fair value of stock options using the Black-Scholes-Merton option pricing model. The following assumptions were used in the Black-Scholes-Merton option pricing model:

	Thirty-Nine Week Period Ended
	December 1, 2012			November 26, 2011
Expected stock price volatility		85	%		79	%
Expected dividend yield		0	%		0	%
Risk-free interest rate		0.7	%		1.45	%
Expected option life		5.5 years			5.5 years

        As of December 1, 2012, there was $20,578 of total unrecognized pre-tax compensation costs related to unvested stock options, net of estimated forfeitures. These costs are expected to be recognized over a weighted average period of 2.53 years. As of December 1, 2012, there was $11,010 of total unrecognized pre-tax compensation costs related to unvested restricted stock grants, net of estimated forfeitures. These costs are expected to be recognized over a weighted average period of 2.26 years.