EQUITY COMPENSATION PLANS

12 Months Ended

Jan. 28, 2012

EQUITY COMPENSATION PLANS

EQUITY COMPENSATION PLANS

NOTE 14—EQUITY COMPENSATION PLANS

        The Company has a stock-based compensation plan originally approved by the stockholders on May 21, 1990 under which it has previously granted non-qualified stock options and incentive stock options to key employees and members of its Board of Directors. There are no awards remaining available for grant under the 1990 Plan. The Company has a stock-based compensation plan originally approved by the stockholders on June 2, 1999 under which it has previously granted and may continue to grant non-qualified stock options, incentive stock options and restricted stock units ("RSUs") to key employees and members of its Board of Directors. On June 24, 2009, the stockholders renamed the 1999 Plan to the 2009 Plan, extended its terms to December 31, 2014 and increased the number of shares issuable thereunder by 1,500,000. As of January 28, 2012, there were 2,952,304 awards outstanding and 1,232,934 awards available for grant under the 2009 Plan.

        Incentive stock options and non-qualified stock options granted under the 1990 and 2009 plans to non-officers vest fully on the third anniversary of their grant date and officers vest in equal tranches over three or four year periods. Generally, all options granted prior to March 3, 2004 carry an expiration date of ten years and options granted on or after March 3, 2004 carry an expiration date of seven years. RSUs previously granted to non-officers vest fully on the third anniversary of their grant date. RSUs previously granted to officers vest in equal tranches over three or four year periods.

        The Company has also granted RSUs under the 2009 plan in conjunction with its non-qualified deferred compensation plan. Under the deferred compensation plan, the first 20% of an officer's bonus deferred into the Company's stock fund is matched by the Company on a one-for-one basis with RSUs that vest over a three-year period, with one third vesting on each of the first three anniversaries of the grant date.

        The exercise price, term and other conditions applicable to future stock option and RSU grants under the 2009 plan are generally determined by the Board of Directors; provided that the exercise price of stock options must be at least 100% of the quoted market price of the common stock on the grant date. The Company currently satisfies all share requirements resulting from RSU conversions and option exercises from its treasury stock. The Company believes its treasury share balance at January 28, 2012 is adequate to satisfy such activity during the next twelve-month period.

        The following table summarizes the options under the plans:

	Fiscal Year 2011
	Shares			Weighted Average Exercise Price
Outstanding—beginning of year		1,831,802		$	8.55
Granted		265,139			12.30
Exercised		(45,321	)		7.13
Forfeited		(10,507	)		9.01
Expired		(32,683	)		15.01
Outstanding—end of year		2,008,430			8.97
Vested and expected to vest options—end of year		1,978,204			8.92
Options exercisable—end of year		1,241,128		$	9.13

        The following table summarizes information about options during the last three fiscal years (dollars in thousands except per option):

	Fiscal 2011		Fiscal 2010		Fiscal 2009
Weighted average fair value at grant date per option	$	5.38	$	4.28	$	2.10
Intrinsic value of options exercised	$	202	$	609	$	43

        The aggregate intrinsic value of outstanding options, exercisable options and expected to vest options at January 28, 2012 was $7.8 million, $5.2 million and $2.6 million, respectively. At January 28, 2012, the weighted average remaining contractual term of outstanding options, exercisable options and expected to vest options was 3.9 years, 3.1 years and 5.2 years, respectively. At January 28, 2012, there was approximately $1.7 million of total unrecognized pre-tax compensation cost related to non-vested stock options, which is expected to be recognized over a weighted average period of 1.3 years.

        The following table summarizes information about non-vested RSUs since January 28, 2012:

	Number of RSUs			Weighted Average Fair Value
Nonvested at January 29, 2011		432,331		$	10.16
Granted		321,314			10.45
Forfeited		(3,051	)		9.09
Vested		(123,847	)		12.09
Nonvested at January 28, 2012		626,747		$	9.93

        The following table summarizes information about RSUs during the last three fiscal years:

(dollar amounts in thousands)	Fiscal 2011		Fiscal 2010		Fiscal 2009
Weighted average fair value at grant date per unit	$	10.45	$	9.32	$	9.18
Fair value at vesting date	$	1,498	$	1,861	$	1,455
Intrinsic value at conversion date	$	896	$	809	$	675
Tax benefits realized from conversions	$	336	$	301	$	251

        At January 28, 2012, there was approximately $2.5 million of total unrecognized pre-tax compensation cost related to non-vested RSUs, which is expected to be recognized over a weighted-average period of 1.9 years.

        The Company recognized approximately $1.3 million, $1.4 million, and $1.0 million of compensation expense related to stock options, and approximately $1.9 million, $2.1 million, and $1.6 million of compensation expense related to restricted stock units, included in selling, general and administrative expenses for fiscal 2011, 2010, and 2009, respectively. The related tax benefit recognized was approximately $1.2 million, $1.3 million and $1.0 million for fiscal 2011, 2010 and 2009, respectively.

        Expected volatility is based on historical volatilities for a time period similar to that of the expected term and the expected term of the options is based on actual experience. The risk-free rate is based on the U.S. treasury yield curve for issues with a remaining term equal to the expected term. The fair value of each option granted during fiscal 2011, 2010 and 2009 is estimated on the date of grant using the Black-Scholes option-pricing model and, in certain situations where the grant includes both a market and a service condition, the Monte Carlo simulation model is used. The following are the weighted-average assumptions:

	Year ended
	January 28, 2012			January 29, 2011			January 30, 2010
Dividend yield		1.0	%		1.35	%		2.3	%
Expected volatility		58	%		56	%		65	%
Risk-free interest rate range:
High		1.9	%		2.0	%		2.3	%
Low		1.6	%		0.9	%		1.6	%
Ranges of expected lives in years		4 - 5			4 - 5			4 - 5

        The Company granted approximately 95,000 and 105,000 RSUs in fiscal 2011 and 2010, respectively, that will vest if the employees remain continuously employed through the third anniversary date of the grant and the Company achieves a return on invested capital target for fiscal year 2013 and 2012, respectively. The number of underlying shares that may be issued upon vesting will range from 0% to 150%, depending upon the Company achieving the financial targets in fiscal year 2013 and 2012, respectively. At the date of the grants, the fair values were $12.48 per unit and $10.34 per unit for the 2011 and 2010 awards, respectively. The Company also granted approximately 48,000 and 52,000 RSUs for fiscal 2011 and 2010, respectively, that will vest if the employees remain continuously employed through the third anniversary date of the grant and will become exercisable if the Company satisfies a total shareholder return target in fiscal 2013 and 2012, respectively. The number of underlying shares that may become exercisable will range from 0% to 175% depending upon whether the market condition is achieved. The Company used a Monte Carlo simulation to estimate a $14.73 and $12.99 per unit grant date fair value for the 2011 and 2010 RSUs, respectively. The non-vested restricted stock award table reflects the maximum vesting of underlying shares for performance and market based awards granted in both 2011 and 2010.

        During fiscal 2011 and 2010, the Company granted approximately 50,000 and 61,000 restricted stock units, respectively, related to officers' deferred bonus matches under the Company's non-qualified deferred compensation plan, which vest over a three year period. The fair value of these awards was $13.68 and $12.53, respectively. During fiscal 2011 and 2010, the Company granted approximately 42,000 and 52,000 RSUs, respectively, to its non-employee directors of the board that vested immediately. The fair value for these awards was $10.67 and $9.55 per unit, respectively.

        The Company reflects in its consolidated statement of cash flows any tax benefits realized upon the exercise of stock options or issuance of RSUs in excess of that which is associated with the expense recognized for financial reporting purposes. The amounts reflected as financing cash inflows and operating cash outflows in the Consolidated Statement of Cash Flows for fiscal 2011, 2010 and 2009 are immaterial.

        During fiscal 2011, the Company began an employee stock purchase plan which provides eligible employees the opportunity to purchase shares of the Company's stock at a stated discount through regular payroll deductions. The aggregate number of shares of common stock that may be issued or transferred under the plan is 2,000,000 shares. All shares purchased by employees under this plan will be issued through treasury stock. The Company's expense for the discount during fiscal 2011 was immaterial. As of January 28, 2012, there were 1,964,238 shares available for issuing under this plan.