Stock Options and Stock Awards

6 Months Ended

Aug. 31, 2013

Stock Options and Stock Awards

Stock Options and Stock Awards

8. Stock Options and Stock Awards

        The Company recognizes share-based compensation expense over the requisite service period of the award, net of an estimate for the impact of forfeitures. Operating results for the twenty-six week periods ended August 31, 2013 and September 1, 2012 include $8,077 and $8,653, 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 thirteen week periods ended August 31, 2013 and September 1, 2012 are as follows:

	August 31, 2013				September 1, 2012
	Shares		Weighted Average Fair Value		Shares		Weighted Average Fair Value
Stock options granted		4,828	$	1.91		12,020	$	0.91
Stock awards granted		2,721	$	2.77		5,450	$	1.31
Total awards		7,549				17,470

        Typically, stock options granted vest, and are subsequently exercisable in equal annual installments over a four-year period for employees. 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:

	Twenty-Six Week Period Ended
	August 31, 2013			September 1, 2012
Expected stock price volatility		85	%		85	%
Expected dividend yield		0	%		0	%
Risk-free interest rate		1.4	%		0.7	%
Expected option life		5.5 years			5.5 years

        As of August 31, 2013, the total unrecognized pre-tax compensation costs related to unvested stock options and restricted stock grants, net of estimated forfeitures and the weighted average period of cost amortization are as follows:

	August 31, 2013
	Unvested stock options		Unvested restricted stock
Unrecognized pre-tax costs	$	20,204	$	12,508
Weighted average amortization period		2.6 years		2.1 years