Note 5 - Stock-Based Compensation

On April 27, 2012, we completed a three-for-two stock split of the shares of our common stock, which was effected in the form of a stock dividend. All share and per share amounts referenced below give effect to the stock split and have been adjusted retroactively for all periods presented.

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 28, 2012		271,546		$	9.48		1.51	$	2,089
Grants		0
Forfeited or expired		0
Exercised		(93,949	)		10.94
Outstanding and exercisable at April 28, 2012		177,597		$	8.71		1.81	$	2,014

The following table summarizes information regarding options exercised:

(In thousands)	Thirteen Weeks Ended April 28, 2012		Thirteen Weeks Ended April 30, 2011
Total intrinsic value (1)	$	639	$	58
Total cash received	$	1,027	$	51
Associated excess income tax benefits recorded	$	353	$	22

(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 April 28, 2012:

		Options Outstanding and Exercisable
Range of Exercise Price		Number of Options Outstanding		Weighted Average Remaining Life		Weighted Average Exercise Price
$	7.63 - 8.45		141,298		1.41		$	8.35
$	9.12 - 10.73		36,299		3.34		$	10.10

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

(In thousands)	Thirteen Weeks Ended April 28, 2012		Thirteen Weeks Ended April 30, 2011
Stock-based compensation expense before the recognized income tax benefit	$	0	$	9
Income tax benefit (1)	$	0	$	3

(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 have been granted since fiscal 2008. All outstanding options had vested as of the end of fiscal 2011, therefore no unrecognized compensation expense remains.

Restricted Stock Awards

The following table summarizes the share transactions for our restricted stock awards:

	Number of Shares			Weighted- Average Grant Date Fair Value
Non-vested at January 28, 2012		277,145		$	17.31
Granted		242,250			17.69
Vested		0			0.00
Forfeited or expired		(22,539	)		15.31
Non-vested at April 28, 2012		496,856		$	17.59

The weighted-average grant date fair value of stock awards granted during the thirteen-week periods ended April 28, 2012 and April 30, 2011 was $17.69 and $17.04, respectively. No awards vested during the first quarter of fiscal 2012. The total fair value at grant date of previously non-vested stock awards that vested during the first quarter of fiscal 2011 was $5.8 million. The 22,539 awards that expired in the first quarter of fiscal 2012 represent the third tier of the restricted stock awards granted on March 13, 2006. These awards expired unvested as the performance measure was not achieved.

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

(In thousands)	Thirteen Weeks Ended April 28, 2012		Thirteen Weeks Ended April 30, 2011
Stock-based compensation expense before the recognized income tax benefit	$	610	$	1,133
Income tax benefit (1)	$	234	$	434

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

As of April 28, 2012, there was approximately $6.2 million of unrecognized compensation expense remaining related to both our performance-based and service-based non-vested stock awards. The cost is expected to be recognized over a weighted average period of approximately 1.8 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) have typically been granted to certain non-executive employees such that one-third of the shares underlying the SARs would vest and become fully exercisable on each of the first three anniversaries of the date of the grant and were assigned a five-year term from the date of grant. SARs entitle the holder, upon exercise, to receive cash in an amount equal to the closing price of our stock on the date of exercise less the exercise price, with a maximum amount of gain defined. SARs granted during the first quarter of fiscal 2012 were issued with a defined maximum gain of $6.67 over the exercise price of $17.17. In accordance with current authoritative guidance, cash-settled SARs are classified as Other liabilities on the Condensed 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 28, 2012		0	$	0.00
Granted		135,375		17.17
Forfeited or expired		0		0.00
Exercised		0		0.00
Outstanding at April 28, 2012		135,375	$	17.17		4.76
Exercisable at April 28, 2012		0	$	0.00		0.00

The fair value of these liability awards is remeasured at each reporting period until the date of settlement. Increases or decreases in stock-based compensation expense are recognized over the vesting period, or immediately for vested awards. The weighted-average fair value of outstanding, non-vested SAR awards was $3.37 as of April 28, 2012.

The fair value was estimated using a trinomial lattice model with the following assumptions:

	April 28, 2012
Risk free interest rate yield curve	0.07% - 0.82%
Expected dividend yield	0.0%
Expected volatility	59.66%
Maximum life	4.76 Years
Exercise multiple	1.31
Maximum payout	$6.67
Employee exit rate	2.2% - 9.0%

The risk free interest rate was based on the U.S. Treasury yield curve in effect at the end of the reporting period. We had not paid and did not anticipate paying cash dividends; therefore, the expected dividend yield was assumed to be zero. Expected volatility was based on the historical volatility of our stock. The exercise multiple and employee exit rate are based on historical option data.

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

(In thousands)	Thirteen Weeks Ended April 28, 2012		Thirteen Weeks Ended April 30, 2011
Stock-based compensation expense before the recognized income tax benefit	$	69	$	71
Income tax benefit (1)	$	27	$	27

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

As of April 28, 2012, there was approximately $383,000 in unrecognized compensation expense related to non-vested SARs. The cost is expected to be recognized over a weighted-average period of approximately 1.8 years.

Employee Stock Purchase Plan

The following table summarizes information regarding stock-based compensation expense recognized for the employee stock purchase plan:

(In thousands)	Thirteen Weeks Ended April 28, 2012		Thirteen Weeks Ended April 30, 2011
StStock-based compensation expense before the recognized income tax benefit (1)	$	12	$	12
Income tax benefit (2)	$	5	$	5

(1)	Amounts are representative of the 15% discount employees are provided for purchases under the employee stock purchase plan.

(2)	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.