(12) Stock and Stock Option Plans

The Company had previously adopted a Rights Agreement whereby the Company authorized and declared a dividend of one preferred share purchase right (“Right”) for each outstanding common share of the Company. The Rights Agreement expired in October 2011 and was not renewed.

The Company has stock option and employee incentive plans that provide for the granting of options to purchase or the issuance of shares of common stock at a price fixed by the Board of Directors or a committee. As of January 31, 2013, there were 558,714 shares which remain available to be granted under the plan as stock options. The Company has the ability to issue shares under the plans either from new issuances or from treasury, although it has previously always issued new shares and expects to continue to issue new shares in the future. In the years ended January 31, 2012 and 2011, the Company purchased and subsequently cancelled 5,382 and 5,441, respectively, shares of stock related to settlement of withholding obligations. There were no such treasury stock transactions in the year ended January 31, 2013.

The Company recognized $2,924,000, $3,796,000 and $3,499,000 of compensation cost for share-based plans for the years ended January 31, 2013, 2012 and 2011, respectively. Of these amounts, $905,000, $1,655,000 and $1,057,000, respectively, related to non-vested stock. The total income tax benefit recognized for share-based compensation arrangements was $1,140,000, $1,480,000 and $1,365,000 for the years ended January 31, 2013, 2012 and 2011, respectively.

Options outstanding as of January 31, 2013, as well as the related exercise price and remaining contractual term were as follows:

Grant Date	Options Outstanding		Options Exercisable		Exercise Price		Remaining Contractual Term (Months)
6/04		20,000		20,000	$	16.60		17
6/04		53,076		53,076		16.65		17
6/05		10,000		10,000		17.54		29
9/05		94,707		94,707		23.05		32
1/06		173,981		173,981		27.87		36
6/06		80,000		80,000		29.29		41
6/07		65,625		65,625		42.26		53
7/07		25,500		25,500		42.76		54
2/08		72,439		72,439		35.71		60
1/09		6,000		6,000		24.01		71
2/09		162,752		162,749		15.78		72
2/09		4,580		4,580		15.78		72
6/09		92,551		92,551		21.99		76
6/09		2,472		2,472		21.99		76
2/10		76,590		51,057		27.79		84
2/10		2,721		2,721		25.44		84
2/11		93,193		31,054		33.10		96
3/11		1,312		437		34.50		98
6/11		2,096		698		28.71		100
7/11		17,893		5,963		29.31		102
2/12		174,649		10,140		24.32		108
4/12		27,135		-		21.77		110
7/12		16,477		-		20.89		113
8/12		9,554		-		20.56		114
		1,285,303		965,750

All options were granted at an exercise price equal to the fair market value of the Company’s common stock at the date of grant. The options have contractual terms of 10 years from the date of grant and generally vest ratably over periods of one month to five years. All options outstanding are expected to vest. Certain option awards provide for accelerated vesting if there is a change of control (as defined in the plans) and for equitable adjustments in the event of changes in the Company’s equity structure.

The Company determines the fair value of share-based compensation granted in the form of stock options using the lattice valuation model or the Black-Scholes valuation model. The valuations in each respective year were made using the assumptions noted in the following table. Expected volatilities are based on historical volatility of the Company’s stock price. The Company uses historical data to estimate expected term and employee termination within the valuation model. The risk-free interest rate for the periods within the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The weighted-average fair value at the date of grant for options granted during the fiscal years 2013, 2012 and 2011 was $10.93, $18.70 and $16.08, respectively.

	Years Ended January 31,
Assumptions:	2013	2012	2011
Weighted-average expected volatility	55.1%	65.0%	65.0%
Expected dividend yield	0%	0%	0%
Risk-free interest rate	1.32%	1.94%	2.43%
Expected term (in years)	6.0	5.4	5.4

Stock option transactions for the fiscal years 2013, 2012 and 2011 were as follows:

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Intrinsic Value (in thousands)
Outstanding at February 1, 2010		1,026,227		$	24.86
Granted		88,011			27.72
Exercised		(53,380	)		16.78				757
Forfeited		(29,384	)		31.01
Outstanding at January 31, 2011		1,031,474			25.34
Granted		123,144			32.49
Exercised		(10,611	)		20.77				122
Forfeited		(10,796	)		29.57
Outstanding at January 31, 2012		1,133,211			26.12
Granted		280,547			23.32
Exercised		(54,637	)		17.44				13
Forfeited		(73,818	)		24.50
Outstanding at January 31, 2013		1,285,303			25.97		5.5		1,784

Exercisable at January 31, 2011		693,587			26.23
Exercisable at January 31, 2012		860,756			26.11
Exercisable at January 31, 2013		965,750			25.95		4.5		1,710

Non-vested share transactions for the fiscal years 2013, 2012 and 2011 were as follows:

	Number of Shares			Average Grant Date Fair Value		Intrinsic Value (in thousands)
Nonvested stock at February 1, 2010		79,336		$	36.23
Granted		58,709			27.42
Vested		(28,436	)		32.91
Forfeited		(1,824	)		40.54
Nonvested stock at January 31, 2011		107,785			32.24
Granted		193,188			30.67
Vested		(34,876	)		35.48
Canceled		(33,251	)		35.71
Forfeited		(5,927	)		30.43
Nonvested stock at January 31, 2012		226,919			29.94
Granted		110,958			22.29
Vested		(15,720	)		26.70
Canceled		(46,491	)		27.79
Nonvested stock at January 31, 2013		275,666			27.41	$	5,905

All nonvested stock awards are valued as of the grant date closing stock price and generally vest ratably over service periods of one to five years. Certain nonvested stock awards vest based upon the Company meeting various performance goals. Certain nonvested stock awards provide for accelerated vesting if there is a change of control (as defined in the plans) and for equitable adjustment in the event of changes in the Company’s equity structure.