COMMON STOCK AND STOCK-BASED COMPENSATION

The following table sets forth the changes in the number of issued shares of common stock during the three-month periods presented:



	Three Months Ended
	July 28, 2012	July 30, 2011
Balance at the beginning of the period	38,375,678	38,312,243
Options exercised	—	21,975
Restricted stock awards vested	27,000	28,860
Balance at the end of the period	38,402,678	38,363,078

On July 27, 2012 we paid a quarterly dividend of $2,592.

Stock Options Granted Under the 2010 Stock Plan

In July 2012, the Compensation Committee approved the grant of options to purchase 120,000 shares of our common stock to our executive officers. The stock options have a ten-year term and will vest one-third per year on each anniversary of the date of grant. The exercise price is the closing price on the date granted.

The following tables summarize the stock option activity and related information for the stock options granted under the 2010 Stock Plan for the three months ended July 28, 2012:



	Summary of Option Activity
	Shares	Wtd. Avg. Exercise Price
Outstanding at April 28, 2012	240,000	$	9.97
Granted	120,000	8.64
Exercised	—	—
Cancelled	—	—
Outstanding at July 28, 2012	360,000	$	9.53



Options Outstanding at July 28, 2012
Average Exercise Price		Shares	Avg. Remaining Life (Years)
$	9.24	120,000	8.2
$	10.70	120,000	9.0
$	8.64	120,000	9.9
$	9.53	360,000



Options Exercisable at July 28, 2012
Average Exercise Price		Shares	Avg. Remaining Life (Years)
$	9.24	40,000	8.2
$	10.70	40,000	9.0
$	9.97	80,000

The options outstanding had an intrinsic value of $137 at July 28, 2012. The intrinsic value represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the first quarter of fiscal 2013 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on July 28, 2012.

We estimated the fair value of our employee stock options on the date of grant using the Black-Scholes option-pricing model with the following assumptions:



	Fiscal 2013			Fiscal 2012
	Awards			Awards
Average expected volatility	66.15		%	52.76		%
Average risk-free interest rate	0.39		%	0.63		%
Dividend yield	2.94		%	2.66		%
Expected life of options (in years)	7.18			7.03
Weighted-average grant-date fair value	$	4.13		$	4.27

Restricted Stock Awards ("RSAs") and Restricted Stock Units ("RSUs") Outstanding Under the 2010 Stock Plan

The following table summarizes the RSA and RSU activity for the three months ended July 28, 2012 for the RSA's and RSU's granted under the 2010 Stock Plan:



	RSA Shares	RSU Shares
Unvested and unissued at April 28, 2012	740,000	180,000
Awarded	—	—
Vested	—	—
Forfeited and cancelled	—	—
Unvested and unissued at July 28, 2012	740,000	180,000



	Number of Shares Granted, less Forfeitures		Weighted Average Value		Probable Unearned Compensation Expense at		Target Unearned Compensation Expense at
Grant Fiscal Year	Number of Shares Granted, less Forfeitures	Vesting Period	Weighted Average Value		July 28, 2012		July 28, 2012
2011	640,000	5-year cliff, performance based	$	9.70	$	3,562	$	3,562
2011	304,000	5-year, equal annual installments	9.70		823		N/A
2012	100,000	One-third per year, beginning in fiscal 2015, performance based	8.10		606		606

Stock Options Granted Under the 2007 Stock Plan

In July 2012, our Compensation Committee awarded options to purchase 42,500 shares of our common stock to some non-executive members of the management team that vest one-third per year on each anniversary of the date of the grant. The stock options awarded under the 2007 Stock Plan have a ten-year term. The exercise price is the closing price on the date granted.

The following tables summarize the stock option activity and related information for the stock options granted under the 2007 Stock Plan for the three months ended July 28, 2012:



	Summary of Option Activity
		Wtd. Avg.
	Shares	Exercise Price
Outstanding at April 28, 2012	738,000	$	5.79
Granted	42,500	8.64
Exercised	—	—
Cancelled	—	—
Outstanding at July 28, 2012	780,500	$	5.95



Options Outstanding at July 28, 2012
			Avg.
			Remaining
Average Exercise Price		Shares	Life (Years)
$	2.72	285,000	6.6
$	6.46	260,000	7.0
$	8.13	35,500	7.4
$	10.55	105,000	8.0
$	8.10	52,500	9.1
$	8.64	42,500	9.9
$	5.95	780,500



Options Exercisable at July 28, 2012
			Avg.
			Remaining
Average Exercise Price		Shares	Life (Years)
$	2.72	285,000	6.6
$	6.46	260,000	7.0
$	4.50	545,000

The options outstanding had an intrinsic value of $2,888 at July 28, 2012.

We estimated the fair value of our employee stock options on the date of grant using the Black-Scholes option-pricing model with the following assumptions:



	Fiscal 2013			Fiscal 2012
	Awards			Awards
Average expected volatility	66.15		%	63.55		%
Average risk-free interest rate	0.39		%	0.35		%
Dividend yield	2.94		%	2.84		%
Expected life of options (in years)	7.18			7.03
Weighted-average grant-date fair value	$	4.13		$	3.75

Restricted Stock Awards Outstanding Under the 2007 Stock Plan

In April 2007, 225,000 shares of common stock subject to performance-based RSAs granted to our CEO in fiscal 2006 and 2007 were converted to RSUs. The RSUs were subject to the same vesting schedule and other major provisions of the RSAs they replaced, except the shares for stock underlying the RSUs will not be issued and delivered until the earlier of: (1) thirty days after the CEO’s date of termination of employment with the Company and all of its subsidiaries and affiliates; or (2) the last day of our fiscal year in which the payment of common stock in satisfaction of the RSUs becomes deductible to the Company under Section 162(m) of the Internal Revenue Code. The RSUs are not entitled to voting rights or the payment of dividends. The RSU’s are fully vested as of July 28, 2012. As of July 28, 2012, no shares have been delivered pursuant to the RSUs.

At the beginning of fiscal 2013, there were no RSAs outstanding under the 2007 Stock Plan. During the first quarter of fiscal 2013, we awarded 27,000 shares to our independent directors, all of which vested immediately upon grant.

Stock Options Outstanding Under the 2000 and 2004 Stock Plans

Options to purchase 123,260 shares of our common stock were granted in previous years under the 2000 and 2004 Stock Plans and are outstanding and exercisable as of July 28, 2012. Options to purchase 128,105 shares of our common stock expired in the first quarter of fiscal 2013.

The following tables summarize the stock option activity and related information for the stock options outstanding under the 2000 and 2004 Stock Plans for the three months ended July 28, 2012:



	Summary of Option Activity
			Wtd. Avg.
	Shares		Exercise Price
Outstanding at April 28, 2012	251,365		$	10.96
Exercised	—		—
Expired	(128,105	)	10.50
Outstanding at July 28, 2012	123,260		$	11.44



Options Outstanding and Exercisable at July 28, 2012
			Avg.
			Remaining
Exercise Price		Shares	Life (Years)
$	11.44	123,260	0.9

The options outstanding had no intrinsic value at July 28, 2012.

Stock-based Compensation

We recognize pre-tax compensation expense for stock options, RSA's and RSU's under our 2010 and 2007 stock plans in the selling and administrative section of our consolidated statement of operations. There was no pre-tax compensation expense related to the 2000 and 2004 stock plans in either period presented. The table below summarizes the expense for the three months ended July 28, 2012 and July 30, 2011.



	Compensation Expense
	Three Months Ended
	July 28, 2012		July 30, 2011
2010 Stock Plan:
RSAs	$	366	$	321
RSUs	132		227
Stock options	133		109
Total 2010 Stock Plan	$	631	$	657

2007 Stock Plan:
RSAs	$	233	$	309
Stock options	127		144
Total 2007 Stock Plan	$	360	$	453

Total Compensation Expense	$	991	$	1,110