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 27, 2013	July 28, 2012
Balance at the beginning of the period	38,455,853	38,375,678
Options exercised	97,007	—
Restricted stock awards vested	27,000	27,000
Balance at the end of the period	38,579,860	38,402,678

On July 26, 2013, we paid a quarterly dividend of $2,605.

Stock Options Granted Under the 2010 Stock Plan

In July 2013, 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 27, 2013:



	Summary of Option Activity
	Shares	Wtd. Avg. Exercise Price
Outstanding at April 27, 2013	360,000	$	9.53
Granted	120,000	17.27
Exercised	—	—
Cancelled	—	—
Outstanding at July 27, 2013	480,000	$	11.46



Options Outstanding at July 27, 2013
Average Exercise Price		Shares	Avg. Remaining Life (Years)
$	9.24	120,000	7.3
$	10.70	120,000	8.1
$	8.64	120,000	9.1
$	17.27	120,000	10.0
$	11.46	480,000



Options Exercisable at July 27, 2013
Average Exercise Price		Shares	Avg. Remaining Life (Years)
$	9.24	80,000	7.3
$	10.70	80,000	8.1
$	8.64	40,000	9.1
$	9.70	200,000

The options outstanding had an intrinsic value of $3,618 at July 27, 2013. 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 2014 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 27, 2013.

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 2014			Fiscal 2013
	Awards			Awards
Average expected volatility	65.77		%	66.15		%
Average risk-free interest rate	0.65		%	0.39		%
Dividend yield	2.81		%	2.94		%
Expected life of options (in years)	7.61			7.18
Weighted-average grant-date fair value	$	8.36		$	4.13

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 27, 2013 for the RSA's and RSU's granted under the 2010 Stock Plan:



	RSA Shares	RSU Shares
Unvested and unissued at April 27, 2013	700,000	120,000
Awarded	—	—
Vested	—	—
Forfeited and cancelled	—	—
Unvested and unissued at July 27, 2013	700,000	120,000



	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 27, 2013		July 27, 2013
2011	600,000	5-year cliff, performance based	$	9.70	$	2,277	$	2,277
2011	300,000	5-year, equal annual installments	9.70		353		N/A
2012	100,000	One-third per year, beginning in fiscal 2015, performance based	8.10		440		440

Stock Options Granted Under the 2007 Stock Plan

In July 2013, 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 27, 2013:



	Summary of Option Activity
			Wtd. Avg.
	Shares		Exercise Price
Outstanding at April 27, 2013	778,000		$	5.94
Granted	42,500		17.27
Exercised	(25,832	)	10.08
Cancelled	—		—
Outstanding at July 27, 2013	794,668		$	6.41



Options Outstanding at July 27, 2013
			Avg.
			Remaining
Average Exercise Price		Shares	Life (Years)
$	2.72	285,000	5.7
$	6.46	260,000	6.0
$	8.13	35,500	6.5
$	10.55	85,000	7.1
$	8.10	48,334	8.3
$	8.64	38,334	9.1
$	17.27	42,500	10.0
$	6.41	794,668



Options Exercisable at July 27, 2013
			Avg.
			Remaining
Average Exercise Price		Shares	Life (Years)
$	2.72	285,000	5.7
$	6.46	260,000	6.0
$	8.13	35,500	6.5
$	10.55	85,000	7.1
$	8.10	13,334	8.3
$	8.64	10,001	9.1
$	5.57	688,835

The options outstanding had an intrinsic value of $10,002 at July 27, 2013.

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 2014			Fiscal 2013
	Awards			Awards
Average expected volatility	65.77		%	66.15		%
Average risk-free interest rate	0.65		%	0.39		%
Dividend yield	2.81		%	2.94		%
Expected life of options (in years)	7.61			7.18
Weighted-average grant-date fair value	$	8.36		$	4.13

Restricted Stock Awards and Restricted Stock Units 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, however, a bonus in lieu of dividends is paid. The RSU’s are fully vested as of July 27, 2013. As of July 27, 2013, no shares have been delivered pursuant to the RSUs.

At the end of fiscal 2013, there were no RSAs outstanding under the 2007 Stock Plan. During the first quarter of fiscal 2014, 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

There were no options to purchase shares of our common stock granted in previous years under the 2000 and 2004 Stock Plans outstanding of July 27, 2013. Options to purchase 1,410 shares of our common stock expired in the first quarter of fiscal 2014.

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 27, 2013:



	Summary of Option Activity
			Wtd. Avg.
	Shares		Exercise Price
Outstanding at April 27, 2013	73,185		$	11.44
Exercised	(71,775	)	11.44
Expired	(1,410	)	11.44
Outstanding at July 27, 2013	—		$	—

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 27, 2013 and July 28, 2012.



	Compensation Expense
	Three Months Ended
	July 27, 2013		July 28, 2012
2010 Stock Plan:
RSAs	$	369	$	366
RSUs	74		132
Stock options	101		133
Total 2010 Stock Plan	$	544	$	631

2007 Stock Plan:
RSAs	$	466	$	233
Stock options	156		127
Total 2007 Stock Plan	$	622	$	360

Total Compensation Expense	$	1,166	$	991