8. Shareholders’ Equity:

Dividends

On January 23, 2013, the Company’s Board of Directors approved the payment of a $0.04 per share quarterly cash dividend to shareholders of record at the close of business on February 6, 2013, which was paid on March 1, 2013.

On April 24, 2013, the Company’s Board of Directors approved the payment of a $0.05 per share quarterly cash dividend to shareholders of record at the close of business on May 8, 2013, which was paid on June 3, 2013.

On July 24, 2013, the Company’s Board of Directors approved the payment of a $0.05 per share quarterly cash dividend to shareholders of record at the close of business on August 7, 2013, which was paid on September 3, 2013.

Repurchase of Common Stock

In the first nine months of 2013, the Company repurchased 28,422 shares of its common stock for an aggregate purchase price of $1.9 million or $65.26 per share. Under the Board of Directors’ authorization, as of September 28, 2013, the Company has the ability to repurchase an additional 332,730 shares of its common stock. Repurchases may be made from time to time at prevailing prices, subject to certain restrictions on volume, pricing and timing.

Stock Option Plans and Stock-Based Compensation

The Company had authorized up to 750,000 shares of common stock be reserved for granting either nonqualified or incentive stock options to officers and key employees under the Company’s 2001 Stock Option Plan (the “2001 Plan”). The 2001 Plan expired on February 20, 2011. The Company has authorized up to 250,000 shares of common stock to be reserved for granting either nonqualified or incentive stock options to officers and key employees under the Company’s 2010 Stock Option Plan (the “2010 Plan”).

The Company also sponsors a Stock Option Plan for Nonemployee Directors (the “Nonemployee Directors Plan”) and has reserved a total of 300,000 shares for issuance to directors of the Company who are not employees.

Stock option activity under the 2001 Plan, 2010 Plan and Nonemployee Directors Plan (collectively, the “Option Plans”) as of September 28, 2013 was as follows:

	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (years)	Intrinsic Value
Outstanding at December 29, 2012	613,727		$	31.46	7.06	$	16,010,000
Granted	47,500		59.77
Exercised	(168,462	)	18.72
Forfeited	(6,565	)	42.20
Outstanding at September 28, 2013	486,200		$	38.50	7.28	$	17,358,000
Exercisable at September 28, 2013	236,064		$	27.15	6.07	$	11,107,300

The fair value of options granted under the Option Plans during the first nine months of 2013 and 2012 were estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions and results:

	Nine Months Ended
	September 28, 2013			September 29, 2012
Risk free interest rate	1.30		%	0.88		%
Expected life (years)	6			6
Expected volatility	32.5		%	31.4		%
Dividend yield	1.90		%	2.06		%
Option fair value	$	15.84		$	12.95

During the nine months ended September 28, 2013, option holders surrendered 538 shares of previously owned common stock as payment for option shares exercised as provided for by the Option Plans. All unexercised options at September 28, 2013 have an exercise price equal to the fair market value on the date of the grant.

Compensation expense of $842,900 and $683,000 relating to the vested portion of the fair value of stock options granted was expensed to “Selling, General and Administrative Expenses” in the first nine months of 2013 and 2012, respectively. As of September 28, 2013, the Company had $2.5 million of total unrecognized compensation expense related to stock options that is expected to be recognized over the remaining weighted average vesting period of approximately 2.4 years.