Shareholders’ Equity

Preferred Stock. We have 50,000 authorized shares of Series A Junior Participating Preferred Stock, par value $100 per share, of which none were outstanding during any of the periods presented.

Common Stock. The number of shares of common stock, par value $0.50 per share, authorized, issued and in treasury, was as follows:



	April 28, 2012	April 30, 2011
Authorized	100,000,000	100,000,000
Issued	38,375,678	38,312,243
In treasury	1,342,188	1,342,188

Dividends

We paid quarterly dividends totaling $10,364, $10,329 and $10,414 during fiscal 2012, 2011 and 2010, respectively. We intend to retain the remainder of our earnings not used for dividend payments to provide funds for the operation and expansion of our business.

2010 Stock Plan

The 2010 Stock Plan permits a total of 2,000,000 shares of our common stock to be awarded to participants in the form of nonqualified stock options, incentive stock options, restricted stock awards, restricted stock units, stock appreciation rights, and performance share units. The 2010 Stock Plan is designed to allow for "performance-based compensation" under Section 162(m) of the Internal Revenue Code of 1986, as amended ("Code"). As such, qualified awards payable pursuant to the 2010 Stock Plan should be deductible for federal income tax purposes under most circumstances. As of April 28, 2012, there were 716,000 shares still available for award under the 2010 Stock Plan.

Stock Options Awarded Under the 2010 Stock Plan

During each of fiscal 2012 and fiscal 2011, the Compensation Committee approved the award of options to purchase 128,000 shares of our common stock to our executive officers. The stock options have a ten-year term and will vest 33.3% each year over a three-year period. 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 fiscal 2012 and 2011:



	Summary of Option Activity
	Shares		Wtd. Avg. Exercise Price
Outstanding at May 1, 2010	—		$	—
Awarded	128,000		9.24
Exercised	—		—
Cancelled	—		—
Outstanding at April 30, 2011	128,000		$	9.24
Awarded	128,000		$	10.70
Exercised	—		—
Cancelled	(16,000	)	9.97
Outstanding at April 28, 2012	240,000		$	9.97



Options Outstanding at April 28, 2012
Shares	Exercise Price		Avg. Remaining Life (Years)
120,000	$	9.24	8.5
120,000	$	10.70	9.2
240,000	$	9.97



Options Exercisable at April 28, 2012
Shares	Exercise Price		Avg. Remaining Life (Years)
40,000	$	9.24	8.5

The options outstanding had no intrinsic value at April 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 fiscal 2012 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all options holders exercised their options on April 28, 2012. Since the April 28, 2012 closing stock price was lower than the average exercise prices, the options had no intrinsic value.

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



	2010 Stock Plan
	Fiscal 2012			Fiscal 2011
	Awards			Awards
Average expected volatility	52.76		%	85.83		%
Average risk-free interest rate	0.63		%	0.60		%
Dividend yield	2.66		%	3.49		%
Expected life of options	7.03 years			7.03 years
Weighted-average grant-date fair value	$	4.27		$	5.19

Expected volatility was based on the monthly changes in our historical common stock prices over the expected life of the award. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of the grant corresponding to the expected life of the options. Our dividend yield is based on the average dividend yield for the previous two years from the date of grant. The expected life of options is based on historical stock option exercise patterns and the terms of the options.

Restricted Stock Awards and Restricted Stock Units Awarded Under the 2010 Stock Plan

During fiscal 2012, our Compensation Committee awarded 100,000 shares of common stock subject to performance-based restricted stock awards ("RSAs") to certain non-executive members of management during the second quarter of fiscal 2012. The performance measure is the Company's internal enterprise value at the end of fiscal 2015. The internal enterprise value shall equal the product of (i) fiscal 2015 EBITDA and (ii) 7.5 (the historic multiple of EBITDA), subject to an adjustment for cash, short-term investments, debt, preferred stock, certain equity issuances, certain acquisitions and the changes in the dividend rate. The restricted stock awards will vest, i.e., the restrictions will lapse, one-third as of the end of fiscal 2015, one-third as of the end of fiscal 2016 and the final one-third as of the end of fiscal 2017, based on the enterprise value as of the end of fiscal 2015, to the extent the performance goals have been achieved and provided the employee remains employed. The remaining shares will be forfeited.

During fiscal 2011, the Compensation Committee awarded 640,000 shares of RSAs to certain executive officers. The performance measure will be the Company's internal enterprise value at the end of fiscal 2015. The internal enterprise value shall equal the product of (i) fiscal 2015 EBITDA and (ii) 7.5 (the historic multiple of EBITDA), subject to an adjustment for cash, short-term investments, debt, preferred stock, certain equity issuances, certain acquisitions and the changes in the dividend rate. The restricted stock awards will vest, i.e., the restrictions will lapse, at the end of fiscal 2015 to the extent the performance goals have been achieved. The remaining shares will be forfeited.

During fiscal 2011, our Compensation Committee awarded 320,000 shares of common stock subject to time-based restricted stock units ("RSUs") to certain executive officers. The restricted stock units will vest 20% each year on the last day of our fiscal year and be 100% vested on the last day of fiscal 2015, provided the executive remains employed. The shares of common stock underlying the vested RSUs will not be delivered to the employee until after the employee terminates employment from the Company.

Below are key elements related to the stock options, performance-based restricted stock awards and time-based restricted stock units issued in fiscal 2012 and 2011 under the 2010 Stock Plan:

Bonus in Lieu of Dividends - For the performance-based restricted stock awards, bonuses in lieu of dividends will not be paid until the restrictions lapse (i.e., not in first 5 years). At such time as the restrictions lapse, the executive will be paid a “dividend catch-up” bonus calculated based on the dividends declared during the restricted period and the number of shares earned. For the time-based restricted stock units, once the restricted stock units vest and until the shares are delivered, the executive will be paid a quarterly bonus in lieu of dividends calculated based on declared dividends and the total number of vested restricted stock units held.

Tandem Cash Award - The executives were also granted RSA Tandem Cash Awards. These cash incentive awards will become payable if performance under the RSAs described above exceeds target performance. If the performance measure target for the RSAs is exceeded, the amount payable under the RSA tandem cash bonus will equal the product of the closing price of our common stock as of May 1, 2015 and the number of shares awarded to such executive officer not to exceed 40% of the awarded shares.

Change of Control (Performance-based Restricted Stock Awards) - In the event of a change of control, employee shall vest in the percentage of restricted shares that, extrapolated from the Company's external enterprise value as of the date of the change of control, would have vested on the vesting date. External enterprise value equals the fair market value per share of the Company's common stock as determined by the bona fide offer for the Company's common stock causing the change of control.

Change of Control (Time-based Restricted Stock Units) - In the event of a change in control prior to the end of the 5-year period, the vesting accelerates and the restrictions on any unvested shares will lapse.

Change of Control (Stock Options) - In the event of a change in control, the vesting of all outstanding option awards will be accelerated.

The following table summarizes the RSA and RSU activity for fiscal 2012 and 2011 under the 2010 Stock Plan:



	RSA Shares	RSU Shares
Unvested and unissued at May 1, 2010	—	—
Awarded	640,000	320,000
Vested	—	(64,000	)
Forfeited and Cancelled	—	—
Unvested and unissued at April 30, 2011	640,000	256,000
Awarded	100,000	—
Vested	—	(60,000	)
Forfeited and Cancelled	—	(16,000	)
Unvested and unissued at April 28, 2012	740,000	180,000



			Weighted Average Value		Probable Unearned Compensation Expense at		Target Unearned Compensation Expense at
Grant Fiscal Year	Number of Shares	Vesting Period	Weighted Average Value		April 28, 2012		April 28, 2012
2011	640,000	5-year RSA cliff, performance based	$	9.70	$	3,886	$	3,886
2011	320,000	5-year RSU, equal annual installments	9.70		955		N/A
2012	100,000	One-third per year, beginning in fiscal 2015, performance based	8.10		648		648

2007 Stock Plan

The 2007 Stock Plan permits a total of 1,250,000 shares of our common stock to be awarded to participants. Shares issued under the Stock Plan may be either authorized but unissued shares, or treasury shares. If any award terminates, expires, is canceled or forfeited as to any number of shares of common stock, new awards may be granted with respect to such shares. The total number of shares with respect to which awards may be granted to any participant in any calendar year shall not exceed 200,000 shares. As of April 28, 2012, there were 247,321 shares still available for award under the 2007 Stock Plan.

Upon adoption of the 2010 plan, the Board of Directors has determined that the 2007 Stock Plan will only be used for equity awards to our independent directors and non-executive employees.

Stock Options Awarded Under the 2007 Stock Plan

In fiscal 2012, our Compensation Committee awarded options to purchase 52,500 shares of our common stock to certain 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.

In fiscal 2011, the Compensation Committee approved the award of options to purchase 125,000 shares of our common stock to certain non-executive members of the management team that vest on the third anniversary of the date of grant. The stock options awarded under the 2007 Stock Plan have a ten-year term.

In fiscal 2010, the Compensation Committee approved the award of options to purchase 275,000 shares of our common stock to our executive officers and other members of management. The awards vest one-third per year on each anniversary of the date of grant. Additionally, the Compensation Committee approved the award of options to purchase 35,500 shares of our common stock to some members of the management team that vest on the third anniversary of the date of grant.

The following tables summarize the stock option activity and related information for the stock options granted under the 2007 Stock Plan as of April 28, 2012:



	Summary of Option Activity
	Shares		Wtd. Avg. Exercise Price
Outstanding at May 2, 2009	285,000		$	2.72

Awarded	310,500		6.65
Exercised	—		—
Cancelled	—		—
Outstanding at May 1, 2010	595,500		$	4.77

Awarded	125,000		10.55
Exercised	—		—
Cancelled	—		—
Outstanding at April 30, 2011	720,500		$	5.77

Awarded	52,500		8.10
Exercised	(10,000	)	6.46
Cancelled	(25,000	)	9.73
Outstanding at April 28, 2012	738,000		$	5.79

Options Outstanding

at April 28, 2012



Shares	Exercise Price		Avg. Remaining Life (Years)
285,000	$	2.72	6.9
260,000	6.46		7.2
35,500	8.13		7.6
105,000	10.55		8.2
52,500	8.10		9.4
738,000	$	5.79

Options Exercisable

at April 28, 2012



Shares	Exercise Price		Avg. Remaining Life (Years)
285,000	$	2.72	6.9
183,334	6.46		7.2
468,334	$	4.18

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



	Fiscal 2012 Awards			Fiscal 2011 Awards			Fiscal 2010 Awards
Average expected volatility	63.55		%	85.59		%	86.88		%
Average risk-free interest rate	0.35		%	1.09		%	1.43		%
Dividend yield	2.84		%	3.63		%	2.77		%
Expected life of options	7.03 years			7.03 years			6.87 years
Weighted-average grant-date fair value	$	3.75		$	5.88		$	4.02

The options outstanding had an intrinsic value of $2,294 at April 28, 2012.

Restricted Stock Awards Awarded 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 Code. The RSUs are not entitled to voting rights or the payment of dividends. The RSU’s were fully vested as of April 28, 2012. As of April 28, 2012, no shares have been delivered in connection with the RSUs.

At the beginning of fiscal 2012, there were no RSAs outstanding under the 2007 Stock Plan. During fiscal 2012, we awarded 28,860 restricted shares to our independent directors, all of which vested immediately upon grant. During fiscal 2011, the Compensation Committee awarded 24,000 restricted shares to our independent directors, all of which vested immediately upon grant.

During fiscal 2010, it was determined that based on the current economic environment, the performance shares granted in fiscal 2008 and 2009 were not meeting the revenue growth and return on invested capital targets. Due to the performance shares not meeting financial targets, all of the 382,769, performance-based stock awards granted in fiscal 2008 and fiscal 2009 were canceled. There was no adjustment to the pre-tax compensation expense to reflect the performance shares not meeting current and future anticipated revenue growth and return on invested capital targets because the compensation expense was fully reversed in fiscal 2009.

The following table summarizes the RSA activity under the 2007 Stock Plan:



	Fiscal 2012		Fiscal 2011		Fiscal 2010
Unvested at beginning of fiscal year	—		25,350		453,287
Awarded	28,860		24,000		24,000
Vested	(28,860	)	(47,600	)	(62,140	)
Cancelled	—		—		(382,769	)
Forfeited	—		(1,750	)	(7,028	)
Unvested at end of period	—		—		25,350

2000 and 2004 Stock Plans

Stock Options Outstanding Under the 2000 and 2004 Stock Plans

Options to purchase 251,365 shares of our common stock were granted in previous years under the 2000 and 2004 Stock Plans and are outstanding and exercisable as of April 28, 2012. Options to purchase 96,934 shares of our common stock expired during fiscal 2011.

The following tables summarize the stock option activity and related information for the stock options granted under the 2000 and 2004 Stock Plans for fiscal 2012, 2011 and 2010:



	Options Outstanding				Exercisable Options
	Shares		Wtd. Avg. Exercise Price		Shares	Wtd. Avg. Exercise Price
May 2, 2009	625,633		$	10.36	625,633	$	10.36

Granted	—		—
Exercised	(17,648	)	10.62
Cancelled	(78,209	)	12.08
May 1, 2010	529,776		$	10.10	529,776	$	10.10

Granted	—		—
Exercised	(150,075	)	6.85
Cancelled	(96,934	)	13.03
April 30, 2011	282,767		10.82		282,767	10.82

Granted	—		—
Exercised	(21,975	)	9.02
Cancelled	(9,427	)	11.32
April 28, 2012	251,365		$	10.96	251,365	$	10.96

Options Outstanding

at April 28, 2012



Shares	Wtd. Avg. Exercise Price		Avg. Remaining Life (Years)
128,355	$	10.50	0.1
123,010	11.44		1.1
251,365	$	10.96

Stock-based Compensation

We recognize pre-tax compensation expense for stock options, RSA's and RSU's under our 2010, 2007, 2004 and 2000 stock plans in the selling and administrative section of our consolidated statement of operations. Our awards subject to graded vesting are recognized using the accelerated recognition method. As of April 28, 2012, we had $6,329 of unrecognized equity-based compensation cost that we expect to recognize over a weighted average period of 3.2 years.

The table below summarizes the expense for fiscal 2012, 2011 and 2010.



	Compensation Expense
	Fiscal 2012		Fiscal 2011		Fiscal 2010
2010 Stock Plan:
RSAs	$	1,415	$	642	$	—
RSUs	924		1,033		—
Stock options	553		200		—
Total 2010 Stock Plan	$	2,892	$	1,875	$	—

2007 Stock Plan:
RSAs	$	309	$	343	$	421
Stock options	775		788		450
Total 2007 Stock Plan	$	1,084	$	1,131	$	871

Total Compensation Expense	$	3,976	$	3,006	$	871