Note 9 – Stock Based Compensation

Compensation Plan Summaries

We have three stock-based compensation plans: the 1993 Stock Option and Incentive Plan (the “1993 Plan”), the Outside Directors Stock Option Plan (the “Directors Plan”) and the 2000 Stock Option and Incentive Plan (the “2000 Plan”).

The 1993 Plan was approved by our Board of Directors and shareholders effective January 15, 1993, and amended at the 1997 annual meeting of shareholders. The 1993 Plan reserved 1,500,000 shares of common stock for stock option grants (subject to adjustment for subsequent stock splits, stock dividends and certain other changes in the common stock). On January 14, 2003, the 1993 Plan expired. Previously issued stock options can be exercised for up to ten years from their date of grant. At January 28, 2012, there were 50,000 fully vested stock options outstanding under the 1993 Plan.

The Directors Plan was approved by our Board of Directors on March 4, 1999. The plan reserves for issuance 25,000 shares of common stock (subject to adjustment for stock splits, stock dividends and certain other changes to the common stock). No grants have been made under this plan since fiscal 2006, and it is currently the intention of the Board of Directors not to grant stock options under this plan in the future. At January 28, 2012, 11,000 shares of unissued common stock were reserved for possible future grants and there were 7,000 fully vested stock options outstanding under the Directors Plan.

The 2000 Plan was approved by our Board of Directors and shareholders effective June 8, 2000. Currently, the 2000 Plan reserves 2,000,000 shares of common stock for stock option and restricted stock grants (subject to adjustment for subsequent stock splits, stock dividends and certain other changes in the common stock). At January 28, 2012, 274,544 shares of unissued common stock were reserved for future grants under the 2000 Plan.

Stock options currently outstanding under the 2000 Plan typically were granted such that one-third of the shares underlying the stock options granted would vest and become fully exercisable on each of the first three anniversaries of the date of the grant and were assigned a 10-year term from the date of grant. Restricted stock awards issued to employees under the 2000 Plan either vest upon the achievement of specified levels of annual earnings per diluted share during a six-year period starting from the grant date or were granted such that one-third of the shares would vest on each of the first three anniversaries subsequent to the date of the grant. For the performance-based awards, should the annual earnings per diluted share criteria not be met within the six-year period from the grant date, any shares still restricted will be forfeited. Under the 2000 Plan, both service and performance based awards contain nonforefeitable rights to any dividends received. All restricted stock awards issued to date to non-employee Directors vested on January 2 of the year following the year of the grant.

Plan Specific Activity and End of Period Balance Summaries

Stock Options

The following table summarizes the stock option transactions pursuant to the stock-based compensation plans:

	Number of Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value (in thousands)
Outstanding at January 29, 2011		342,718		$	14.70
Granted		0
Forfeited or expired		0
Exercised		(161,687	)		15.24
Outstanding and exercisable at January 28, 2012		181,031		$	14.22		1.51	$	2,089

The total fair value at grant date of previously non-vested stock options that vested was $46,000, $87,000 and $87,000 during fiscal years 2011, 2010, and 2009 respectively.

The following table summarizes information regarding options exercised:

(In thousands)	2011		2010		2009

Total intrinsic value (1)	$	1,624	$	656	$	1,290
Total cash received	$	2,464	$	578	$	998
Associated excess income tax benefits recorded	$	399	$	220	$	385

(1)	Defined as the difference between the market value at exercise and the grant price of stock options exercised.

The following table summarizes information regarding outstanding and exercisable options at January 28, 2012:

	Options Outstanding						Options Exercisable
Range of Exercise Price	Number of Options Outstanding		Weighted Average Remaining Life		Weighted Average Exercise Price		Number of Options Exercisable		Weighted Average Exercise Price
$11.44 – 12.67		102,531		1.62	$	12.54		102,531	$	12.54
$13.68 – 17.12		78,500		1.38	$	16.41		78,500	$	16.41

The following table summarizes information regarding stock-based compensation expense recognized for non-vested options:

(In thousands)	2011 (1)		2010 (1)		2009

Stock-based compensation expense before the recognized income tax benefit	$	22	$	82	$	84
Income tax benefit	$	8	$	31	$	33

(1)	Income tax benefit was calculated using an adjusted effective tax rate. The adjusted rate removes the tax effects from the favorable resolution of certain tax positions.

No stock options were granted during fiscal years 2011, 2010 or 2009. As of January 28, 2012, all options had vested and therefore no unrecognized compensation expense remained.

Restricted Stock Awards

The following table summarizes the restricted share transactions pursuant to the 2000 Plan:

	Number of Shares			Weighted- Average Grant Date Fair Value
Non-vested at January 29, 2011		391,346		$	19.91
Granted		141,393			25.62
Vested		(345,310	)		18.97
Forfeited		(2,668	)		25.72
Non-vested at January 28, 2012		184,761		$	25.96

The total fair value at grant date of previously non-vested stock awards that vested during fiscal 2011, 2010 and 2009 was $6.5 million, $1.3 million and $764,000, respectively. The weighted-average grant date fair value of stock awards granted during fiscal 2010 and fiscal 2009 was $21.65 and $12.26, respectively.

The following table summarizes information regarding stock-based compensation expense recognized for restricted stock awards:

(In thousands)	2011 (1)		2010 (1)		2009

Stock-based compensation expense before the recognized income tax benefit	$	1,882	$	4,875	$	787
Income tax benefit	$	712	$	1,851	$	309

(1)	Income tax benefit was calculated using an adjusted effective tax rate. The adjusted rate removes the tax effects from the favorable resolution of certain tax positions.

The $1.9 million of expense recognized in fiscal 2011 was comprised of compensation expense of $2.6 million offset by income of $716,000. The income was attributable to the fourth quarter reversal of the cumulative prior period expense for performance-based awards, which were deemed by management as not probable of vesting.

The $787,000 of expense recognized in fiscal 2009 was comprised of compensation expense of $1.4 million offset by income of $653,000. The income was attributable to the first quarter reversal of the cumulative prior period expense for performance-based awards, which were deemed by management as not probable of vesting. However, based on our improved financial outlook, a cumulative catch-up of $851,000 was recorded during fiscal 2010 for a portion of these awards deemed probable of vesting.

As of January 28, 2012, there was approximately $2.5 million of unrecognized compensation expense remaining related to both the performance-based and service-based non-vested stock awards. The cost is expected to be recognized over a weighted average period of approximately 2.1 years. This incorporates the current assumptions of the estimated requisite service period required to achieve the designated performance conditions for performance-based stock awards.

Cash-Settled Stock Appreciation Rights (SARs)

Cash-settled stock appreciation rights (SARs) were granted to certain non-executive employees in fiscal 2008. One-third of the shares of the underlying SARs vested and became fully exercisable on each of the first three grant date anniversaries and were assigned a five-year term from the date of grant. Each SAR entitled the holder, upon exercise, to receive cash in the amount equal to the closing price of our stock on the date of exercise less the exercise price. The maximum amount paid, however, could not exceed 100% of the exercise price. In accordance with current authoritative guidance, cash-settled SARs were classified as Other liabilities on the Consolidated Balance Sheets.

The following table summarizes the SARs activity:

	Number of Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)
Outstanding at January 29, 2011		50,686		$	9.72
Granted		0			0.00
Forfeited or expired		(3,168	)		9.72
Exercised		(47,518	)		9.72
Outstanding and exercisable at January 28, 2012		0		$	0.00	0.00

The fair value of liability awards were remeasured, using a trinomial lattice model, at each reporting period until the date of settlement. Increases or decreases in stock-based compensation expense was recognized over the vesting period, or immediately for vested awards. There were no SARs outstanding as of January 28, 2012.

The following table summarizes information regarding stock-based compensation expense recognized for SARs:

(In thousands)	2011 (1)		2010 (1)		2009

Stock-based compensation expense before the recognized income tax benefit	$	197	$	483	$	751
Income tax benefit	$	74	$	183	$	295

(1)	Income tax benefit was calculated using an adjusted effective tax rate. The adjusted rate removes the tax effects from the favorable resolution of certain tax positions.

All remaining SARs were exercised in fiscal 2011, therefore as of January 28, 2012 no unrecognized compensation expense remained.