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Note 5. Stock Incentive Plans
 6 Months Ended
Jul. 02, 2011
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]
5. Stock Incentive Plans

On April 3, 2000, the Company adopted the 2000 Stock Option Plan (the Plan). In 2003, the Company adopted the Build-A-Bear Workshop, Inc. 2002 Stock Incentive Plan; in 2004, the Company adopted the Build-A-Bear Workshop, Inc. 2004 Stock Incentive Plan, and in 2009, the Company amended and restated the Build-A-Bear Workshop, Inc. 2004 Stock Incentive Plan (collectively, the Plans).

Under the Plans, as amended, from January 3, 2009, up to 3,230,000 shares of common stock were reserved and may be granted to employees and nonemployees of the Company. The Plan allows for the grant of incentive stock options, nonqualified stock options, stock appreciation rights (SAR) and restricted stock. Options granted under the Plan expire no later than 10 years from the date of the grant. The exercise price of each incentive stock option shall not be less than 100% of the fair value of the stock subject to the option on the date the option is granted. The vesting provision of individual options generally ranges from one to four years. Each share of stock awarded pursuant to an option or subject to the exercised portion of a SAR reduces the number of shares available by one share. Each share of stock awarded pursuant to any other stock-based awards, including restricted stock grants, reduces the number of shares available by 1.27 shares.

(a) Stock Options

The following table is a summary of the balances and activity for the Plans related to stock options for the twenty-six weeks ended July 2, 2011:

               
Weighted
   
Aggregate
 
         
Weighted
   
Average
   
Intrinsic
 
   
Number of
   
Average
   
Remaining
   
Value
 
   
Shares
   
Exercise Price
   
Contractual Term
   
(in thousands)
 
Outstanding, January 1, 2011
    1,125,223      $ 8.73              
Granted
    303,667        6.22              
Exercised
    38,392        4.98              
Forfeited
    5,817        12.08              
Outstanding, July 2, 2011
    1,384,681      $ 8.27       7.3     $ 572  
                                 
Options Exercisable As Of:
                               
July 2, 2011
    581,755      $ 11.36       5.2     $ 251  

The Company generally issues new shares to satisfy option exercises.

The expense recorded related to options during the twenty-six weeks ended July 2, 2011 was determined using the Black-Scholes option pricing model and the provisions of Staff Accounting Bulletin (SAB) 107 and 110, which allow the use of a simplified method to estimate the expected term of “plain vanilla” options. The assumptions used in the option pricing model for the twenty-six weeks ended July 2, 2011 were: (a) dividend yield of 0%; (b) volatility of 65%; (c) risk-free interest rates ranging from 2.0% to 2.5%; and (d) an expected life of 6.25 years. The assumptions used in the option pricing model for the twenty-six weeks ended July 3, 2010 were: (a) dividend yield of 0%; (b) volatility of 65%; (c) risk-free interest rates ranging from 3.0% to 3.4%; and (d) an expected life of 6.25 years.

(b) Restricted Stock

The following table is a summary of the balances and activity for the Plans related to restricted stock granted as compensation to employees and directors for the twenty-six weeks ended July 2, 2011:

         
Weighted
 
         
Average Grant
 
   
Number of
   
Date Fair Value
 
   
Shares
   
per Award
 
Outstanding, January 1, 2011
    1,468,373      $ 5.96  
Granted
    460,970        6.21  
Vested
    312,981        9.09  
Canceled or expired
    51,840        6.18  
Outstanding, July 2, 2011
    1,564,522      $ 5.40  

The total fair value of shares vested during the twenty-six weeks ended July 2, 2011 and July 3, 2010 was $2.0 million and $1.8 million, respectively.