(10)	Legal Proceedings

Other than the items delineated below, the Company is not a party to any material litigation, other than routine litigation from time to time in the ordinary course of business.

The Company is a defendant in a derivative action stemming from the Company’s proposed Merger with a subsidiary of an affiliate of Argonne Capital Group, LLC as discussed below. This action arose when two separately filed stockholder actions were consolidated, discussed below. There was also a third stockholder action, discussed below, but it has been dismissed.

On July 25, 2013, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Mallard Parent, LLC, (“Parent”) and M Acquisition Corporation, (“Merger Sub”), providing for the merger of Merger Sub with and into the Company (the “Merger”), with the Company surviving the Merger as a wholly owned subsidiary of Parent. Parent and Acquisition Sub are beneficially owned by an affiliate of Argonne Capital Group, LLC (the “Sponsor”). The merger consideration was $14.00 per share in cash, without interest, and was to be supported through financing to be obtained by the Sponsor.

Under the Merger Agreement, each share of the Company’s common stock issued and outstanding immediately prior to the effective time of the Merger (other than shares, if any, owned by Parent, Merger Sub, the Company, or any other direct or indirect wholly owned subsidiary of Parent, Merger Sub, or the Company) would have been converted into the right to receive $14.00 per share in cash, without interest.

The Merger was subject to the approval by at least a majority of all outstanding shares of common stock. The Merger was also subject to various other customary conditions, including the absence of any governmental order prohibiting the consummation of the transaction contemplated by the Merger Agreement, the accuracy of the representations and warranties contained in the Merger Agreement, and compliance with the covenants and agreements in the Merger Agreement in all material respects.

The Company was subject to customary “non-solicitation” provisions that limited its ability to solicit, encourage, discuss or negotiate alternative acquisition proposals from third parties or to provide non-public information to third parties. These non-solicitation provisions were subject to a “fiduciary out” provision that allows the Company to provide non-public information and participate in discussions and negotiations with respect to certain unsolicited written acquisition proposals and to terminate the Merger Agreement and enter into an alternative acquisition agreement with respect to a superior proposal in compliance with the terms of the Merger Agreement, provided that the Company’s Board of Directors has concluded that the failure to do so would be inconsistent with its fiduciary obligations under applicable law.

The Merger Agreement contained certain termination rights, including the Company’s right to terminate the Merger Agreement to accept a superior proposal, and provided that, upon termination of the Merger Agreement by the Company under specified conditions, a termination fee would have been payable by the Company. In such circumstances, the Company would have been required to pay Sponsor $2.25 million. Subject to approval by at least a majority of all outstanding shares of common stock, the proposed Merger was expected to close before the end of the 2013 calendar year.

On October 30, 2013, the Company held a special meeting of its stockholders to vote on the proposal to adopt the Merger Agreement. The proposal to adopt the Merger Agreement did not receive approval from more than a majority of the outstanding share of the Company’s common stock, and therefore was not approved by the Company’s Stockholders. As a result of the failure to receive such stockholder approval, on October 30, 2013, the Company delivered to parent and Merger Sub a written notice (the “Termination Notice”) terminating the Merger Agreement in accordance with Section 7.2(b) of the Merger Agreement. As a result of the Termination Notice, the Merger Agreement was terminated and the merger contemplated was abandoned. Because the Termination Notice was delivered because of the failure of the Company’s stockholders to approve the Merger Agreement, no termination fee was paid by either party.

Merger related costs for the thirteen weeks ended May 4, 2014, included in SG&A Expenses from Continuing Operations, were $.1 million.

On September 5, 2013, Advanced Advisors, a Company stockholder, filed a class action petition in the District Court of Shawnee County, Kansas (case no. 13C001007) citing, among other parties, the Company and the Company’s directors, Royce Winsten, Terrence Babilla, Dennis Logue, Lolan Mackey, and Richard Wilson, as defendants. The petition challenged the defendants’ actions in causing the Company to enter into the Merger Agreement under which the Sponsor was to purchase all of the outstanding shares of the Company. The allegations against the defendants included breaches of fiduciary duties and the aiding and abetting of breaches of fiduciary duties. The amount of the damages was unspecified.

On September 23, 2013, Paul Hughes, an individual Company stockholder, filed a class action petition in the District Court of Shawnee County, Kansas (case no. 13C001096) citing, among other parties, the Company and the Company’s directors, Royce Winsten, Terrence Babilla, Dennis Logue, Lolan Mackey, and Richard Wilson, as defendants. The petition challenged the defendants’ actions in causing the Company to enter into the Merger Agreement under which the Sponsor was to purchase all of the outstanding shares of the Company. The allegations against the defendants included breaches of fiduciary duties and the aiding and abetting of breaches of fiduciary duties. The amount of the damages was unspecified. On March 20, 2014, Plaintiffs filed a notice of dismissal without prejudice. On April 10, 2014, the court entered a dismissal order and removed the case from the active docket.

On September 27, 2013, Jeffery R. Geygan, an individual Company stockholder, filed a class action petition in the District Court of Shawnee County, Kansas (case no. 13C001120) citing, among other parties, the Company and the Company’s directors, Royce Winsten, Terrence Babilla, Dennis Logue, Lolan Mackey, and Richard Wilson, as defendants. The petition challenged the defendants’ actions in causing the Company to enter into the Merger Agreement under which the Sponsor was to purchase all of the outstanding shares of the Company. The allegations against the defendants included breaches of fiduciary duties and the aiding and abetting of breaches of fiduciary duties. The amount of the damages was unspecified.

On November 21, 2013, the parties filed a joint motion to consolidate the Geygan case and the Advanced Advisors case, discussed above. On December 18, 2013, the court granted the consolidation motion, and the cases were consolidated under case no. 13C1007. On January 9, 2014, the Plaintiffs filed their consolidated and verified derivative petition, citing, among other parties, the Company and the Company’s directors, Royce Winsten, Terrence Babilla, Dennis Logue, Lolan Mackey, and Richard Wilson, as defendants. The petition challenges the defendants’ actions in causing the Company to enter into the Merger Agreement under which the Sponsor was to purchase all of the outstanding shares of the Company. The allegations against the defendants include breaches of fiduciary duties and the aiding and abetting of breaches of fiduciary duties. The amount of the damages is unspecified.

On January 30, 2014, the Company filed a motion to dismiss the Plaintiffs’ consolidated and verified derivative petition. The court set a July 18, 2014 hearing for the Company’s motion to dismiss.

The Company intends to vigorously defend itself in all of the legal proceedings discussed above.