|   |   |                                                                                 |
|--------|--------|--------------------------------------------------------------------------------------|
| þ |   | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |

|   |   |                                                                                     |
|--------|--------|------------------------------------------------------------------------------------------|
| o      |   | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |

|  Minnesota                 |   | 41-1704319          |
|---------------------------------|--------|---------------------|
| (State or other jurisdiction of |   | (IRS Employer       |
| incorporation or organization)  |   | Identification No.) |

|                       |   |                                      |
|----------------------------|--------|-------------------------------------------|
| Title of each class        |   | Name of each exchange on which registered |
| Common Stock, No par value |   | The NASDAQ Global Market                  |

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|     |
|----------|
|     |   |   |
|     |   |   |
|     | Explanatory Note |   |
|     |   |   |
|     | PART III |   |
| Item 10  | Directors, Executive Officers, and Corporate Governance |   |
| Item 11. | Executive Compensation |   |
| Item 12  | Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters |   |
| Item 13  | Certain Relationships and Related Transactions, and Director Independence |   |
| Item 14  | Principal Accountant Fees and Services |   |
|     |   |   |
|     | PART IV |   |
| Item 15  | Exhibits and Financial Statement Schedules |   |
|     |   |   |
|     | SIGNATURES |   |

----

----

----

----

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| Name             | Position                                                          |
|------------------|-------------------------------------------------------------------|
|             |                                                              |
| Richard S Willis | Current President and CEO                                         |
| Cary L. Deacon   | Former President and CEO                                          |
| Diane D. Lapp    | Current CFO                                                       |
| J. Reid Porter   | Former Interim President and CEO, Chief Operating Officer and CFO |
| Ward O. Thomas   | President of Distribution and Encore                              |
| Joyce A. Fleck   | President of Business and Logistics Services                      |
| Calvin Morrell   | Former President of Encore                                        |

----

----

| AnnualCompensationComponent                                                                                              | Key Features                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Purpose                                                                                                                                                                                                                                                                                                                      | FY 2012 Design/Actions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|--------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Base Salary                                                                                                              | Fixed annual cash amount.  Base pay increases considered on an annual basis to reward performance and align within the median range of our comparator group.                                                                                                                                                                                                                                                                                                                                | Provide a fixed amount of cash compensation upon which the Named Executive Officers can rely which is critical to attract and retain qualified individuals.   Adjustments in base salary used to reward individual performance and reflect increased responsibilities.                                             | No actions were taken with respect to the base salaries of the Named Executive Officers except in connection with increased responsibilities for Mr. Porter and Ms. Lapp and as part of the new hire compensation package for Mr. Willis.                                                                                                                                                                                                                                                                                                                 |
| AnnualIncentivePlan(CashIncentiveAward)                                                                                  | Named executive officers participate in the same Annual Incentive Plan as other management employees.   Compensation Committee established short-term financial goals based on EBITDA and Net Sales targets to reflect focus on revenue growth and profitability with no bonus accrual below a designated threshold EBITDA amount.   Individual Named Executive Officers performance evaluated against consolidated financial goals and those of their respective business units. | Motivate and reward achieving or exceeding Company, business unit and individual performance goals, reinforcing pay-for-performance.   Focus our entire organization on key business objectives and motivate our Named Executive Officers to lead their organizations to achieve short-term financial goals.       | Annual Incentive Plan design remained the same as previous years except that the individual objective component for the Named Executive Officers and other Company officers was removed.   Since the Company’s consolidated EBITDA did not reach the threshold amount, the Named Executive Officers did not receive an annual incentive award for FY2012 and no discretionary awards were made by the Compensation Committee.                                                                                                             |
| Long-TermIncentiveCompensation (Awarded value delivered through grants of stock options and restricted stockunits). | Stock options: generally vest in one-third increments over three-year service period.   Restricted Stock Units:generally vest in one-third increments over three-year service period; Award settled in shares of Company stock.§                                                                                                                                                                                                                                                       | Equity awards support our growth strategy, provide a link between the Named Executive Officers and our shareholders, and serve as a retention tool, restricted stock units prior to vesting provide added retention value as, unlike underwater stock options, they maintain value in times of stock volatility.   | The aggregate grant date fair value of all employee equity awards granted in FY2012 was approximately the same as the grant date fair value of equity awards granted in FY2011.   In FY 2012, none of the Named Executive Officers serving at fiscal year end exercised vested stock options and realized an aggregate of $103,151 on the vesting of restricted stock units.  Departing Named Executive Officers realized an aggregate of $650,402 on the exercise of vested stock options and the vesting of restricted stock units. |

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|   | · | Compensation Decision Independence: — The Compensation Committee is comprised solely of independent directors, and the Compensation Committee uses an independent and conflict-free compensation consultant that does not provide any other services to the Company. We will continue to monitor Committee and consultant independence and comply with exchange listing standards promulgated in accordance with the SEC rule adopted under the Dodd-Frank Act when finalized; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Ownership Guidelines: — The Named Executive Officers are subject to stock ownership guidelines with an expectation that they reach a certain level of stock ownership within five years of assuming their current position through stock purchases and retention of shares acquired through equity grants. The Compensation Committee periodically reviews achievement of the guidelines and may consider failure to meet the goals as a negative factor when making compensation decisions. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Hedging Prohibited: — The Named Executive Officers are prohibited from engaging in any speculative transactions in our Common Stock and from hedging the economic risk of ownership of our Common Stock. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Clawbacks: — Once the SEC adopts final rules regarding “clawback” of incentive compensation, the Board intends to adopt a “clawback” policy in accordance with those rules providing for recovery of incentive compensation, if any, in excess of what would have been paid to officers of the Company in the event that the Company is required to restate financial results; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Risk Assessment: — When creating compensation incentives, the Compensation Committee discusses and considers any enterprise risks that the Named Executive Officers may be incentivized to take in order to achieve the compensation goals.  The Compensation Committee believes that the Company’s compensation policies and programs do not create any risks that are reasonably likely to have material adverse effect on the Company; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | No Excise Tax Gross-Ups — The Company has not entered into any agreements with the Named Executive Officers that provide for IRC Section 280G excise tax gross-ups with respect to payments contingent upon a change in control; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | No Supplemental Retirement Plans — The Named Executive Officers do not participate in any executive retirement plans other than the 401(K) plan available to all employees; and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | No Option Repricings — Even though the majority of the Company’s outstanding stock options have been underwater for the past several years, the Company has not repriced or replaced any underwater stock options. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | Reviews external market data; |
|--------|--------|-------------------------------|

|   | · | Confirms the reasonableness of total compensation and of each component of compensation when compared to competitive market data; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------|

|   | · | Evaluates overall Company performance in relation to financial and strategic objectives, competition and industry circumstances; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------|

|   | · | In conjunction with the other independent directors on the Board, reviews and approves the annual goals and objectives for the CEO and evaluates the CEO’s performance in light of the established goals and objectives and strategic and operational accomplishments; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | For other Named Executive Officers, reviews annual goals and objectives and assesses individual performance and any changes in duties and responsibilities; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Adjusts base salaries, as appropriate, based on job performance, leadership, tenure, experience, and other factors, including competitive market data; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Approves the design of the annual cash incentive plan, establishes the annual financial objectives for the plan and assesses Company performance in light of the pre-established goals; and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Grants awards under our long-term incentive plan, as appropriate, based on competitive market data and an evaluation of the current performance and future potential of each Named Executive Officer. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | information and advice in order to review and revise the appropriate comparator peer group; |
|--------|--------|---------------------------------------------------------------------------------------------|

|   | · | information and advice in structuring the new CEO compensation package; |
|--------|--------|-------------------------------------------------------------------------|

|   | · | information for comparing total direct compensation against market data; |
|--------|--------|--------------------------------------------------------------------------|

|   | · | information for comparing the Company’s overall equity usage against market data; |
|--------|--------|-----------------------------------------------------------------------------------------|

|   | · | information on executive compensation trends and legislative developments impacting executive compensation in general; and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------|

|   | · | recommendations for compensation program design changes, as appropriate. |
|--------|--------|--------------------------------------------------------------------------|

| Scholastic Corporation              | THQ Inc.       | Leapfrog Enterprises, Inc. |
|-------------------------------------|----------------------------------------------|----------------------------|
| BlueLinx Holdings Inc.         | GTSI Corp.                                   | Gaiam Inc.                 |
| Beacon Roofing Supply, Inc.    | RealNetworks, Inc.                           | Rosetta Stone, Inc.        |
| ModusLink Global Solutions Inc.     | SED International Holdings, Inc.             |                       |
| Take Two Interactive Software, Inc. | PFSweb, Inc..                                |                       |

----

| NEO              |   | BaseSalary |    |   | Percent ofTotal |   |   | Target AnnualIncentive |   |   | Percent ofTotal |   |   | Long Term IncentiveGrant Date Fair Value |   |   | Percent ofTotal |   |
|------------------|--------|------------|---------|--------|-----------------|--------|--------|------------------------|--------|--------|-----------------|--------|--------|------------------------------------------|--------|--------|-----------------|--------|
|             |   |       |    |   |            |   |   |                   |   |   |            |   |   |                                     |   |   |            |   |
| Richard S Willis |   | $          | 450,000 |   |            |   | 26     | %                      |   | $      | 360,000         |   |   |                                     | 21     | %      |            | $      | 897,555 |   |   |   | 53 | % |
| Diane D. Lapp    |   | $          | 255,000 |   |            |   | 50     | %                      |   | $      | 127,500         |   |   |                                     | 24     | %      |            | $      | 139,492 |   |   |   | 26 | % |
| Ward O. Thomas   |   | $          | 270,000 |   |            |   | 53     | %                      |   | $      | 135,000         |   |   |                                     | 26     | %      |            | $      | 106,115 |   |   |   | 21 | % |
| Joyce A. Fleck   |   | $          | 257,500 |   |            |   | 52     | %                      |   | $      | 128,750         |   |   |                                     | 26     | %      |            | $      | 106,115 |   |   |   | 22 | % |

----

| NEO              |   | TargetAward |    |   | Target Percentof Base Salary |   |   | MaximumAward |   |   | Maximum Percentof Base Salary |   |   | ActualAward |   |
|------------------|--------|-------------|---------|--------|------------------------------|--------|--------|--------------|--------|--------|-------------------------------|--------|--------|-------------|--------|
|             |   |        |    |   |                         |   |   |         |   |   |                          |   |   |        |   |
| Richard S Willis |   | $           | 360,000 |   |                         |   | 80     | %            |   | $      | 540,000                       |   |   |        | 120    | % |   |   | 0 |   |
| Diane D. Lapp    |   | $           | 127,500 |   |                         |   | 50     | %            |   | $      | 191,250                       |   |   |        | 75     | % |   |   | 0 |   |
| Ward O. Thomas   |   | $           | 135,000 |   |                         |   | 50     | %            |   | $      | 202,500                       |   |   |        | 75     | % |   |   | 0 |   |
| Joyce A. Fleck   |   | $           | 128,750 |   |                         |   | 50     | %            |   | $      | 193,125                       |   |   |        | 75     | % |   |   | 0 |   |

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|   | · | the projected impact on our Company’s earnings for the anticipated fiscal year grants and outstanding grants from prior years; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the value of the equity awards in the competitive range of the Market Data; |
|--------|--------|-----------------------------------------------------------------------------|

|   | · | the reasonableness of the proportion of our total shares outstanding (our “run rate”) used for annual equity grants; and |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the reasonableness of the potential voting power dilution to our shareowners (our “overhang”). |
|--------|--------|------------------------------------------------------------------------------------------------------------|

----

----

----

|   | · | Appropriate mix between short-term cash compensation and long-term equity grants. |
|--------|--------|-----------------------------------------------------------------------------------|

|   | · | Participation in the same annual incentive and long-term equity plans by all director-level and above employees. |
|--------|--------|------------------------------------------------------------------------------------------------------------------|

|   | · | Maximum payout levels for annual incentive capped at 150% percent of target. |
|--------|--------|------------------------------------------------------------------------------|

|   | · | Negative discretion over annual incentive program payouts and sales bonus programs may be exercised. |
|--------|--------|------------------------------------------------------------------------------------------------------|

|   | · | Ranges for annual incentive metrics established to avoid payouts on an “all or nothing” basis. |
|--------|--------|------------------------------------------------------------------------------------------------------------|

|   | · | Multi-year and overlapping vesting schedules for long-term equity grants. |
|--------|--------|---------------------------------------------------------------------------|

----

|         Name and Principal Position |         Year |   |       Salary($) |    |   | StockAwards($)(1) |   |    |     OptionAwards($)(2) |   |   | Non-EquityIncentivePlanCompensation($)(3) |   |   |   AllOtherCompensation($)(4) |    |   |       Total($) |   |
|---------------------------------------------------------|----------------------------------|--------|--------------------------------|---------|--------|-------------------|--------|---------|----------------------------------|--------|--------|-------------------------------------------|--------|--------|-----------------------------------|---------|--------|-------------------------------|--------|
| Richard S Willis, (5)                                   | FY2012                           |   |                           | 237,115 |   |              |   | 378,000 |                             |   |   | 519,555                                   |   |   |                              | 0       |   |                          |   | 68,068 |   |   |   | 1,202,738 |   |
| President and CEO                                       |                             |   |                           |    |   |              |   |    |                             |   |   |                                      |   |   |                              |    |   |                          |   |   |   |   |   |   |   |
|                                                    |                             |   |                           |    |   |              |   |    |                             |   |   |                                      |   |   |                              |    |   |                          |   |   |   |   |   |   |   |
| Cary L. Deacon, (6)                                     | FY2012                           |   |                           | 24,462  |   |              |   | 0       |                             |   |   | 0                                         |   |   |                              | 0       |   |                          |   | 1,393,619 |   |   |   | 1,418,081 |   |
| Former President and CEO                                | FY2011                           |   |                           | 481,029 |   |              |   | 180,200 |                             |   |   | 317,730                                   |   |   |                              | 0       |   |                          |   | 28,222 |   |   |   | 1,007,181 |   |
|                                                    | FY2010                           |   |                           | 475,000 |   |              |   | 208,000 |                             |   |   | 260,000                                   |   |   |                              | 570,000 |   |                          |   | 28,125 |   |   |   | 1,541,125 |   |
|                                                    |                             |   |                           |    |   |              |   |    |                             |   |   |                                      |   |   |                              |    |   |                          |   |   |   |   |   |   |   |
| Diane D. Lapp, (7)                                      | FY2012                           |   |                           | 232,654 |   |              |   | 86,200  |                             |   |   | 53,292                                    |   |   |                              | 0       |   |                          |   | 4,105 |   |   |   | 376,251 |   |
| Chief Financial Officer                                 |                             |   |                           |    |   |              |   |    |                             |   |   |                                      |   |   |                              |    |   |                          |   |   |   |   |   |   |   |
|                                                    |                             |   |                           |    |   |              |   |    |                             |   |   |                                      |   |   |                              |    |   |                          |   |   |   |   |   |   |   |
| J. Reid Porter, (8)                                     | FY2012                           |   |                           | 230,965 |   |              |   | 131,250 |                             |   |   | 0                                         |   |   |                              | 0       |   |                          |   | 365,612 |   |   |   | 727,827 |   |
| Former Chief Operating Officer,                         | FY2011                           |   |                           | 333,000 |   |              |   | 257,000 |                             |   |   | 0                                         |   |   |                              | 0       |   |                          |   | 8,145 |   |   |   | 598,145 |   |
| CFO and Interim CEO and President                       | FY2010                           |   |                           | 333,000 |   |              |   | 54,600  |                             |   |   | 68,250                                    |   |   |                              | 274,725 |   |                          |   | 7,845 |   |   |   | 738,420 |   |
|                                                    |                             |   |                           |    |   |              |   |    |                             |   |   |                                      |   |   |                              |    |   |                          |   |   |   |   |   |   |   |
| Ward O. Thomas,(9)                                      | FY2012                           |   |                           | 270,000 |   |              |   | 39,500  |                             |   |   | 66,615                                    |   |   |                              | 0       |   |                          |   | 1,745 |   |   |   | 377,860 |   |
| President of Distribution and Encore                    | FY2011                           |   |                           | 159,923 |   |              |   | 41,998  |                             |   |   | 75,375                                    |   |   |                              | 0       |   |                          |   | 0 |   |   |   | 277,296 |   |
|                                                    |                             |   |                           |    |   |              |   |    |                             |   |   |                                      |   |   |                              |    |   |                          |   |   |   |   |   |   |   |
| Joyce A. Fleck,                                         | FY2012                           |   |                           | 257,500 |   |              |   | 39,500  |                             |   |   | 66,615                                    |   |   |                              | 0       |   |                          |   | 4,900 |   |   |   | 368,515 |   |
| President of Business and Logistics                     | FY2011                           |   |                           | 253,173 |   |              |   | 42,400  |                             |   |   | 74,760                                    |   |   |                              | 0       |   |                          |   | 4,900 |   |   |   | 375,233 |   |
| Services                                                | FY2010                           |   |                           | 239,846 |   |              |   | 23,400  |                             |   |   | 29,250                                    |   |   |                              | 187,500 |   |                          |   | 4,412 |   |   |   | 484,408 |   |
|                                                    |                             |   |                           |    |   |              |   |    |                             |   |   |                                      |   |   |                              |    |   |                          |   |   |   |   |   |   |   |
| Calvin Morrell, (10)                                    | FY2012                           |   |                           | 170,980 |   |              |   | 0       |                             |   |   | 0                                         |   |   |                              | 0       |   |                          |   | 394,240 |   |   |   | 565,220 |   |
| Former President of Encore                              | FY2011                           |   |                           | 263,300 |   |              |   | 42,400  |                             |   |   | 74,760                                    |   |   |                              | 0       |   |                          |   | 14,840 |   |   |   | 395,300 |   |
|                                                    | FY2010                           |   |                           | 250,796 |   |              |   | 23,400  |                             |   |   | 29,250                                    |   |   |                              | 132,190 |   |                          |   | 52,130 |   |   |   | 487,766 |   |

----

| (1)    | The amounts in this column represent the grant date fair value of all restricted stock units awarded in the applicable fiscal year as determined using the opening sale price of our Common Stock on such date. This amount was computed in accordance with Financial Accounting Standards Board Accounting Standards Codification (ASC) Topic 718. We recognize the expense for financial reporting purposes over the applicable vesting period.                                                                                                                                                                                 |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| (2)    | The amounts in this column represent the grant date fair value of all stock options awarded in the applicable fiscal year as determined using the Black-Scholes pricing model. This amount was computed in accordance with Financial Accounting Standards Board Accounting Standards Codification (ASC) Topic 718. The assumptions used to arrive at the Black-Scholes value are discussed in Note 21 to our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2012. We recognize the expense for financial reporting purposes over the applicable vesting period. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| (3)    | The amounts in this column represent the annual incentive paid under our Annual Incentive Plan as discussed in “Compensation Discussion and Analysis.” The amounts listed for FY2010 were earned for FY2010 although paid after the end of the 2010 fiscal year. No awards were earned for FY2011 or FY2012 under the Annual Management Incentive Plan.                                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| (4)    | The table below shows the components of this column for FY2012, which include amounts paid or accrued by the Company in FY2012 for perquisites, severance, tax gross-ups and Company matching contributions to our 401(K) defined contribution plan.                                                                                                                                                                                                                                                                                                                                                                              |

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| Name    |   | 401(k) PlanMatch |    |   | Employment TerminationPayments |   |      | EarnedUnusedVacation |   |   | LifeInsurance |   |   | MedicalExpenseReimbursement |    |   | CommutingExpenseReimbursement |   |    | Tax Gross-Up onCommuting ExpenseReimbursement |   |   | RelocationExpenseReimbursement |   |
|---------|--------|------------------|---------|--------|--------------------------------|--------|-----------|----------------------|--------|--------|---------------|--------|--------|-----------------------------|---------|--------|-------------------------------|--------|---------|-----------------------------------------------|--------|--------|--------------------------------|--------|
| Willis  |   | $                | — |   |                           | $      | —   |                 |   | $      | —       |   |   |                        | — |   |                          | $      | 7,147   |                                          |   | $      | 32,740                         |   |   | $ | 28,181 |   |   | $ | — |   |
| Deacon  |   | $                | 4,777   |   |                           | $      | 1,358,500 |                 |   | $      | 18,817        |   |   |                        | 11,525  |   |                          | $      | — |                                          |   | $      | —                        |   |   | $ | — |   |   | $ | — |   |
| Porter  |   | $                | 4,900   |   |                           | $      | 357,500   |                 |   | $      | —       |   |   |                        | 3,212   |   |                          | $      | — |                                          |   | $      | —                        |   |   | $ | — |   |   | $ | — |   |
| Lapp    |   | $                | 4,105   |   |                           | $      | —   |                 |   | $      | —       |   |   |                        | — |   |                          | $      | — |                                          |   | $      | —                        |   |   | $ | — |   |   | $ | — |   |
| Thomas  |   | $                | 1,745   |   |                           | $      | —   |                 |   | $      | —       |   |   |                        | — |   |                          | $      | — |                                          |   | $      | —                        |   |   | $ | — |   |   | $ | — |   |
| Fleck   |   | $                | 4,900   |   |                           | $      | —   |                 |   | $      | —       |   |   |                        | — |   |                          | $      | — |                                          |   | $      | —                        |   |   | $ | — |   |   | $ | — |   |
| Morrell |   | $                | 4,900   |   |                           | $      | 311,863   |                 |   | $      | 7,982         |   |   |                        | — |   |                          | $      | — |                                          |   | $      | —                        |   |   | $ | — |   |   | $ | 69,495 |   |

| (5)    | Mr. Willis was hired as an executive officer of the Company and appointed President and CEO on September 15, 2011. He continues to serve as a director of the Company but, as of his date of employment, no longer received any additional compensation for his services as a director. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                    |
| (6)    | The Board of Directors terminated Mr. Deacon’s employment with the Company on April 6, 2011.                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                    |
| (7)    | Ms. Lapp was appointed as an executive officer of the Company and Interim Chief Financial Officer on October 28, 2011.  Ms. Lapp was subsequently promoted to Chief Financial Officer on May 25, 2012.                                                                        |
|   |                                                                                                                                                                                                                                                                                    |
| (8)    | Mr. Porter retired from the Company and his position of Chief Operating Officer and CFO on October 28, 2011. From April 6, 2011 until September 15, 2011, Mr. Porter also served as Interim CEO and President.                                                                          |
|   |                                                                                                                                                                                                                                                                                    |
| (9)    | Mr. Thomas was appointed as an executive officer of the Company on August 10, 2010.                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                    |
| (10)   | The employment of Mr. Morrell was terminated on November 14, 2011 in connection with the restructuring of the Company.                                                                                                                                                                  |

----

|             |   |      |    |   |       |   |    | Estimated Future Payouts UnderNon-Equity Incentive Plan Awards(2) |   |   |   |   |    |   |    |   |                                                 |    |    |                                                    |   |    |                                |   |
|------------------|--------|-----------|---------|--------|------------|--------|---------|-------------------------------------------------------------------|--------|--------|--------|--------|---------|--------|---------|--------|------------------------------------------------------|---------|---------|---------------------------------------------------------|--------|---------|-------------------------------------|--------|
|             |   | Grant     |    |   | Approval   |   |    | Threshold                                                         |   |   | Units  |   |    | Awards |    |   | AllOtherStockAwards:Number ofShares ofStock orAwards |    |    | AllOtherOptionAwards:Number ofSecuritiesUnderlyingGrant |   |    | Exerciseor BasePrice ofOptionAwards |   |   | ClosingMarketPrice onDate ofGrant |   |   | Grant DateFair Value ofStock andOptionAwards |   |
| Name             |   | Date(1)   |    |   | Date(1)    |   |    | ($)                                                               |   |   | ($)    |   |    | ($)    |    |   |                                                 | (#)     |    |                                                    |   | (#)     |                                |   | ($/Sh)(3) |   |   | ($/Sh) |   |   | ($) |   |
| Richard S Willis |   | 4/1/2011  |    |   | 4/1/2011   |   |    |                                                              |   |   |   |   |    |   |    |   |                                                 |    |    |                                                    |   | 12,000  | (5)                                 |   |   | 1.90 |   |   |   | 1.86 |   |   |   | 13.327 |   |
|             |   | 9/15/2011 |    |   | 9/14/2011  |   |    |                                                              |   |   |   |   |    |   |    |   |                                                 |    |    |                                                    |   | 475,000 | (5)                                 |   |   | 1.75 |   |   |   | 1.77 |   |   |   | 519,555 |   |
|             |   | 10/3/2011 |    |   | 9/14/2011  |   |    |                                                              |   |   |   |   |    |   |    |   |                                                 | 225,000 | (4)     |                                                    |   |    |                                |   |   |   |   |   |   |   |   |   |   | 378,000 |   |
|             |   |      |    |   |       |   |    |                                                              | 0      |   |   |   | 360,000 |   |    |   | 540,000                                              |    |    |                                                    |   |    |                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cary L. Deacon   |   |      | — |   |       |   | — |                                                              |   |   |   |   |    |   |    |   |                                                 |    |    |                                                    |   |    | —                             |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
|             |   |      |    |   |       |   |    |                                                              |   |   | 0      |   |    |   | 391,400 |   |                                                 |    | 587,100 |                                                    |   |    |                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Diane D. Lapp    |   | 6/10/2011 |    |   | 6/8/2011   |   |    |                                                              |   |   |   |   |    |   |    |   |                                                 |    |    |                                                    | 30,000 | (4)     |                                |   |   |   |   |   |   |   |   |   |   |   |   |   | 54,600 |   |
|             |   | 11/3/2011 |    |   | 10/24/2011 |   |    |                                                              |   |   |   |   |    |   |    |   |                                                 |    |    |                                                    | 20,000 | (4)     |                                |   |   |   |   |   |   |   |   |   |   |   |   |   | 31,600 |   |
|             |   | 11/3/2011 |    |   | 10/24/2011 |   |    |                                                              |   |   |   |   |    |   |    |   |                                                 |    |    |                                                    |   |    |                                |   | 60,000 | (5) |   |   | 1.58 |   |   |   | 1.57 |   |   |   | 53,292 |   |
|             |   |      |    |   |       |   |    |                                                              |   |   | 0      |   |    |   | 127,500 |   |                                                 |    | 191,250 |                                                    |   |    |                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| J. Reid Porter   |   | 8/23/2011 |    |   | 8/23/2011  |   |    |                                                              |   |   |   |   |    |   |    |   |                                                 |    |    |                                                    | 75,000 | (4)     |                                |   |   |   |   |   |   |   |   |   |   |   |   |   | 131,250 |   |
|             |   |      |    |   |       |   |    |                                                              |   |   | 0      |   |    |   | 292,500 |   |                                                 |    | 438,750 |                                                    |   |    |                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ward O. Thomas   |   | 11/3/2011 |    |   | 10/24/2011 |   |    |                                                              |   |   |   |   |    |   |    |   |                                                 |    |    |                                                    | 25,000 | (4)     |                                |   |   |   |   |   |   |   |   |   |   |   |   |   | 39,500 |   |
|             |   | 11/3/2011 |    |   | 10/24/2011 |   |    |                                                              |   |   |   |   |    |   |    |   |                                                 |    |    |                                                    |   |    |                                |   | 75,000 | (5) |   |   | 1.58 |   |   |   | 1.57 |   |   |   | 66,615 |   |
|             |   |      |    |   |       |   |    |                                                              |   |   | 0      |   |    |   | 135,000 |   |                                                 |    | 202,500 |                                                    |   |    |                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Joyce A. Fleck   |   | 11/3/2011 |    |   | 10/24/2011 |   |    |                                                              |   |   |   |   |    |   |    |   |                                                 |    |    |                                                    | 25,000 | (4)     |                                |   |   |   |   |   |   |   |   |   |   |   |   |   | 39,500 |   |
|             |   | 11/3/2011 |    |   | 10/24/2011 |   |    |                                                              |   |   |   |   |    |   |    |   |                                                 |    |    |                                                    |   |    |                                |   | 75,000 | (5) |   |   | 1.58 |   |   |   | 1.57 |   |   |   | 66,615 |   |
|             |   |      |    |   |       |   |    |                                                              |   |   | 0      |   |    |   | 128,750 |   |                                                 |    | 193,125 |                                                    |   |    |                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Calvin Morrell   |   |      | — |   |       |   | — |                                                              |   |   |   |   |    |   |    |   |                                                 |    |    |                                                    |   |    | —                             |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
|             |   |      |    |   |       |   |    |                                                              |   |   | 0      |   |    |   | 133,900 |   |                                                 |    | 200,850 |                                                    |   |    |                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| (1)    | The date of grant for each award is established by the Compensation Committee during a meeting or by written action without a meeting on or prior to the date of the grant. Pursuant to guidelines adopted by the Compensation Committee, annual grants are normally discussed and approved in scheduled meetings taking place in the fall to become effective as of the first day of the open trading window after public disclosure of second quarter financial information.                                                                                                                                                                                                                                                                                                 |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| (2)    | Our Annual Incentive Plan is considered a “non-equity incentive plan.” This column represents the range of awards under the plan possible for FY2012. The amounts that were actually earned by the Named Executive Officers in FY2012 are set forth in the “Non-Equity Incentive Plan Compensation” column of the “Summary Compensation Table” above, and, in each case, the amounts earned for FY2012 were $0. For FY2012, each Named Executive’s Officer’s target award was established as a percentage of base salary. The target award percentages, objectives and other details are set forth in the discussion of “Annual Incentive Compensation” in our “Compensation Discussion and Analysis.” |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| (3)    | Under the terms of the Amended and Restated 2004 Stock Plan (the “2004 Stock Plan”), as approved by our shareholders, the exercise price is no less than the grant date fair market value defined as the opening price for our Common Stock on the NASDAQ Global Market during a regular trading session or, if the grant date is not a trading day, then the last reported sales price listed on the NASDAQ Global Market prior to the grant date.                                                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| (4)    | Restricted stock units were granted in FY2012 under the 2004 Stock Plan as discussed in “Long-Term Incentive Compensation” in our “Compensation Discussion and Analysis.”                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| (5)    | Stock option grants to the Named Executive Officers under the 2004 Stock Plan as discussed in “Long-Term Incentive Compensation” in our “Compensation Discussion and Analysis.”                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |

----

|             |   | Option Awards                                                    |    |   | StockAwards                                                     |   |
|------------------|--------|------------------------------------------------------------------|---------|--------|-----------------------------------------------------------------|--------|
| Name             |   | Number ofSecuritiesUnderlyingUnexercisedOptions(#)Exercisable(1) |    |   | Number ofSecuritiesUnderlyingUnexercisedOptions(#)Unexercisable |   |   | OptionExercisePrice ($) |   |   | OptionExpirationDate |   |   | Number ofShares orUnits ofStockThatHaveNotVested (#) |   |   | MarketValue ofSharesor Unitsof StockThatHaveNotVested ($) |   |
| Richard S Willis |   |                                                             | 16,667  |   |                                                            |   | 33,333 | (2) |   |   | 1.95 |   |   | 2/10/2021 |   |   |   | — |   |   |   | — |   |
|             |   |                                                             | 0       |   |                                                            |   | 12,000 | (3) |   |   | 1.90 |   |   | 3/31/2021 |   |   |   | — |   |   |   | — |   |
|             |   |                                                             | 0       |   |                                                            |   | 475,000 | (4) |   |   | 1.75 |   |   | 9/14/2021 |   |   |   | — |   |   |   | — |   |
|             |   |                                                             | — |   |                                                            |   | — |   |   |   | — |   |   |   | — |   |   |   | 225,000 | (9) |   |   | 400,500 |   |
|             |   |                                                             |    |   |                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cary L. Deacon   |   |                                                             | 0       |   |                                                            |   | 0 |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
|             |   |                                                             |    |   |                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   | 0 |   |   |   | 0 |   |
|             |   |                                                             |    |   |                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Diane D. Lapp    |   |                                                             | 10,000  |   |                                                            |   | 0 |   |   |   | 7.78 |   |   | 6/13/2015 |   |   |   | — |   |   |   | — |   |
|             |   |                                                             | 7,000   |   |                                                            |   | 0 |   |   |   | 4.59 |   |   | 10/25/2015 |   |   |   |   |   |   |   |   |   |
|             |   |                                                             | 8,000   |   |                                                            |   | 0 |   |   |   | 4.95 |   |   | 11/01/2016 |   |   |   | — |   |   |   | — |   |
|             |   |                                                             | 6,000   |   |                                                            |   | 0 |   |   |   | 2.41 |   |   | 11/11/2017 |   |   |   |   |   |   |   |   |   |
|             |   |                                                             | 10,000  |   |                                                            |   | 0 |   |   |   | 0.69 |   |   | 11/12/2018 |   |   |   | — |   |   |   | — |   |
|             |   |                                                             | 6,667   |   |                                                            |   | 3,333 | (5) |   |   | 2.08 |   |   | 11/2/2019 |   |   |   |   |   |   |   |   |   |
|             |   |                                                             | 11,667  |   |                                                            |   | 23,333 | (6) |   |   | 2.12 |   |   | 11/3/2020 |   |   |   | — |   |   |   | — |   |
|             |   |                                                             | 0       |   |                                                            |   | 60,000 | (7) |   |   | 1.58 |   |   | 11/02/2021 |   |   |   | — |   |   |   | — |   |
|             |   |                                                             | — |   |                                                            |   | — |   |   |   | — |   |   |   | — |   |   |   | 1,667 | (10) |   |   | 2,967 |   |
|             |   |                                                             | — |   |                                                            |   | — |   |   |   | — |   |   |   | — |   |   |   | 8,000 | (11) |   |   | 14,240 |   |
|             |   |                                                             | — |   |                                                            |   | — |   |   |   | — |   |   |   | — |   |   |   | 20,000 | (12) |   |   | 35,600 |   |
|             |   |                                                             |    |   |                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| J. Reid Porter   |   |                                                             | 52,500  |   |                                                            |   | 0 |   |   |   | 2.08 |   |   | 10/28/2014 |   |   |   | — |   |   |   | — |   |
|             |   |                                                             | 15,000  |   |                                                            |   | 0 |   |   |   | 2.41 |   |   | 10/28/2014 |   |   |   | — |   |   |   | — |   |
|             |   |                                                             |    |   |                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   | 0 |   |   |   | 0 |   |
|             |   |                                                             |    |   |                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ward O. Thomas   |   |                                                             | 33,333  |   |                                                            |   | 16,667 | (8) |   |   | 2.52 |   |   | 9/14/2020 |   |   |   | — |   |   |   | — |   |
|             |   |                                                             | 0       |   |                                                            |   | 75,000 | (7) |   |   | 1.58 |   |   | 11/2/2021 |   |   |   | — |   |   |   | — |   |
|             |   |                                                             | — |   |                                                            |   | — |   |   |   | — |   |   |   | — |   |   |   | 16,666 | (13) |   |   | 29,665 |   |
|             |   |                                                             | — |   |                                                            |   | — |   |   |   | — |   |   |   | — |   |   |   | 25,000 | (12) |   |   | 44,500 |   |
|             |   |                                                             |    |   |                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Joyce A. Fleck   |   |                                                             | 10,000  |   |                                                            |   | 0 |   |   |   | 7.73 |   |   | 07/10/2015 |   |   |   | — |   |   |   | — |   |
|             |   |                                                             | 7,000   |   |                                                            |   | 0 |   |   |   | 4.59 |   |   | 10/25/2015 |   |   |   | — |   |   |   | — |   |
|             |   |                                                             | 8,000   |   |                                                            |   | 0 |   |   |   | 4.95 |   |   | 11/01/2016 |   |   |   | — |   |   |   | — |   |
|             |   |                                                             | 6,000   |   |                                                            |   | 0 |   |   |   | 2.41 |   |   | 11/11/2017 |   |   |   | — |   |   |   | — |   |
|             |   |                                                             | 15,000  |   |                                                            |   | 0 |   |   |   | 1.85 |   |   | 03/11/2018 |   |   |   | — |   |   |   | — |   |
|             |   |                                                             | 22,500  |   |                                                            |   | 0 |   |   |   | 0.69 |   |   | 11/12/2018 |   |   |   | — |   |   |   | — |   |
|             |   |                                                             | 15,000  |   |                                                            |   | 7,500 | (5) |   |   | 2.08 |   |   | 11/02/2019 |   |   |   | — |   |   |   | — |   |
|             |   |                                                             | 20,000  |   |                                                            |   | 40,000 | (6) |   |   | 2.12 |   |   | 11/3/2020 |   |   |   | — |   |   |   | — |   |
|             |   |                                                             | 0       |   |                                                            |   | 75,000 | (7) |   |   | 1.58 |   |   | 11/02/2021 |   |   |   | — |   |   |   | — |   |
|             |   |                                                             | — |   |                                                            |   | — |   |   |   | — |   |   |   | — |   |   |   | 3,750 | (10) |   |   | 6,675 |   |
|             |   |                                                             | — |   |                                                            |   | — |   |   |   | — |   |   |   | — |   |   |   | 13,333 | (11) |   |   | 23,733 |   |
|             |   |                                                             | — |   |                                                            |   | — |   |   |   | — |   |   |   | — |   |   |   | 25,000 | (12) |   |   | 44,500 |   |
|             |   |                                                             |    |   |                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Calvin Morrell   |   |                                                             | 0       |   |                                                            |   | 0 |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |

----

----

| (1)    | On March 20, 2006, the vesting of all outstanding stock options with exercise prices equal to or greater than $4.50 per share were accelerated and became exercisable. However, as a condition to the acceleration, the Board required each Named Executive Officer to enter into a lock-up agreement which prohibits the sale, transfer or other disposition of the shares acquired upon any exercise of the accelerated stock options (other than sales to fund the exercise price or to satisfy minimum statutory withholding) until the date on which the exercise would have been permitted under the stock option’s pre-acceleration vesting terms or, if earlier, the officer’s last day of employment with the Company. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (2)    | Non-employee Director initial stock option granted on February 11, 2011 with vesting in three equal annual installments on February 11, 2012, February 11, 2013 and February 11, 2014, conditioned on continued service as a director through those dates.                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| (3)    | Non-employee Director annual stock option granted on April 1, 2011 with vesting in three equal annual installments on April 1, 2012, April 1, 2013 and April 1, 2014, conditioned on continued service as a director through those dates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (4)    | Stock option granted September 15, 2011 with vesting in three annual installments of 100,000 shares on September 15, 2012, 175,000 shares on September 15, 2013 and 200,000 shares on September 15, 2014, conditioned on continued employment through those dates.                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| (5)    | Stock options granted November 3, 2009 with vesting in three equal annual installments on November 3, 2010, November 3, 2011 and November 3, 2012, conditioned on continued employment through those dates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (6)    | Stock options granted November 4, 2010 with vesting in three equal annual installments on November 4, 2011, November 4, 2012 and November 4, 2013, conditioned on continued employment through those dates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (7)    | Stock options granted November 3, 2011 with vesting in three equal annual installments on November 3, 2012, November 3, 2013 and November 3, 2014, conditioned on continued employment through those dates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| (8)    | Stock option granted September 15, 2010 with vesting in three equal annual installments on September 15, 2011, September 15, 2012 and September 15, 2013, conditioned on continued employment through those dates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| (9)    | Restricted stock unit award granted October 3, 2011 with vesting in three annual installments of 50,000 units on September 15, 2012, 75,000 units on September 15, 2013 and 100,000 units on September 15, 2014, conditioned on continued employment through those dates.  One share of Common Stock will be issued for every restricted stock unit which vests.                                                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (10)   | Restricted stock unit awards granted November 3, 2009 with vesting in three equal annual installments on November 3, 2010, November 3, 2011 and November 3, 2012, conditioned on continued employment through those dates.  One share of Common Stock will be issued for every restricted stock unit which vests.                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (11)   | Restricted stock unit awards granted November 4, 2010 with vesting in three equal annual installments on November 4, 2011, November 4, 2012 and November 4, 2013, conditioned on continued employment through those dates.  One share of Common Stock will be issued for every restricted stock unit which vests.                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (12)   | Restricted stock unit awards granted November 3, 2011 with vesting in three equal annual installments on November 3, 2012, November 3, 2013 and November 3, 2014, conditioned on continued employment through those dates.  One share of Common Stock will be issued for every restricted stock unit which vests.                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (13)   | Restricted stock unit award granted September 15, 2010 with vesting in three equal annual installments on September 15, 2011, September 15, 2012 and September 15, 2013, conditioned on continued employment through those dates.  One share of Common Stock will be issued for every restricted stock unit which vests.                                                                                                                                                                                                                                                                                                                                                                                                               |

----

|               |   | Option Awards                           |    |   | Stock Awards                 |   |
|--------------------|--------|-----------------------------------------|---------|--------|------------------------------|--------|
|     Name |   | Number ofShares Acquiredon Exercise (#) |    |   | Value Realizedon Exercise($) |   |   | Number of SharesAcquiredon Vesting (#) |   |   | Value Realizedon Vesting($)(1) |   |
| Richard S Willis   |   |                                    | — |   |                         |   | — |   |   |   | — |   |   |   | — |   |
| Cary L. Deacon     |   |                                    | 200,000 |   |                         |   | 236,000 |   |   |   | — |   |   |   | — |   |
| Diane D. Lapp      |   |                                    | — |   |                         |   | — |   |   |   | 37,333 |   |   |   | 65,769 |   |
| J. Reid Porter     |   |                                    | 52,500  |   |                         |   | 39,447 |   |   |   | 201,333 |   |   |   | 329,066 |   |
| Ward O. Thomas     |   |                                    | — |   |                         |   | — |   |   |   | 8,334 |   |   |   | 14,585 |   |
| Joyce A. Fleck     |   |                                    | — |   |                         |   | — |   |   |   | 14,167 |   |   |   | 22,797 |   |
| Calvin Morrell     |   |                                    | 22,500  |   |                         |   | 23,092 |   |   |   | 14,167 |   |   |   | 22,797 |   |

----

| (1) | Amount determined using the closing price of our Common Stock on the vesting date. |
|-----|------------------------------------------------------------------------------------|

----

----

----

|     Name |   |   SalaryContinuation($) |    |   |   BenefitPremiums($) |   |    | SubstituteIncentive PlanPayments($) |   |   |   Total($) |   |
|--------------------|--------|------------------------------|---------|--------|---------------------------|--------|---------|-------------------------------------|--------|--------|-----------------|--------|
| Richard S Willis   |   | $                            | 900,000 |   |                      |   | — |                                |   |   | —         |   |   | $ | 900,000 |   |
|               |   |                         |    |   |                      |   |    |                                |   |   |            |   |   |   |   |   |
| Diane D. Lapp      |   | $                            | 255,000 |   |                      |   | — |                                |   | $      | 45,742          | (1)    |   | $ | 300,742 |   |
|               |   |                         |    |   |                      |   |    |                                |   |   |            |   |   |   |   |   |
| Ward O. Thomas     |   | $                            | 270,000 |   |                      |   | — |                                |   |   | —         |   |   | $ | 270,000 |   |
|               |   |                         |    |   |                      |   |    |                                |   |   |            |   |   |   |   |   |
| Joyce A. Fleck     |   | $                            | 257,500 |   |                      |   | — |                                |   | $      | 62,500          | (2)    |   | $ | 320,000 |   |
|               |   |                         |    |   |                      |   |    |                                |   |   |            |   |   |   |   |   |

----

|   |                                                                                                                                                                                                                |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1)    | Represents Ms. Lapp’s substitute incentive plan payment calculated as the average of the amounts earned by Ms. Lapp for the last three years under the Annual Management Incentive Plan ($0, $0, $137,227).   |
|   |                                                                                                                                                                                                                |
| (2)    | Represents Ms. Fleck’s substitute incentive plan payment calculated as the average of the amounts earned by Ms. Fleck for the last three years under the Annual Management Incentive Plan ($0, $0, $187,500). |
|   |                                                                                                                                                                                                                |

| Name             |   | SalaryContinuation($) |    |   | BenefitPremiums($) |   |    | SubstituteIncentive PlanPayments($) |   |   | Total($) |   |
|------------------|--------|-----------------------|---------|--------|--------------------|--------|---------|-------------------------------------|--------|--------|----------|--------|
| Richard S Willis |   | $                     | 900,000 |   |               |   | — |                                |   |   | —  |   |   | $ | 900,000 |   |
|             |   |                  |    |   |               |   |    |                                |   |   |     |   |   |   |   |   |
| Diane D. Lapp    |   | $                     | 255,000 |   |               |   | — |                                |   | $      | 45,742   | (1)    |   | $ | 300,742 |   |
|             |   |                  |    |   |               |   |    |                                |   |   |     |   |   |   |   |   |
| Ward O. Thomas   |   | $                     | 270,000 |   |               |   | — |                                |   |   | —  |   |   | $ | 270,000 |   |
|             |   |                  |    |   |               |   |    |                                |   |   |     |   |   |   |   |   |
| Joyce A. Fleck   |   | $                     | 257,500 |   |               |   | — |                                |   | $      | 62,500   | (2)    |   | $ | 320,000 |   |

----

| (1)    | Represents Ms. Lapp’s substitute incentive plan payment calculated as the average of the amounts earned by Ms. Lapp for the last three years under the Annual Management Incentive Plan ($0, $0, $137,227).   |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                |
| (2)    | Represents Ms. Fleck’s substitute incentive plan payment calculated as the average of the amounts earned by Ms. Fleck for the last three years under the Annual Management Incentive Plan ($0, $0, $187,500). |
|   |                                                                                                                                                                                                                |

----

| Name(1)               |   | Fees Earnedor Paid in Cash |   |   | Stock Awards(2) |   |    | Option Awards(3) |   |   | All OtherCompensation |   |   | Total  |    |
|-----------------------|--------|----------------------------|--------|--------|-----------------|--------|---------|------------------|--------|--------|-----------------------|--------|--------|--------|---------|
| Keith A. Benson       |   | $                          | 41,000 |   |            |   | — |             |   | $      | 13,327                |   |   |   | — |   |   | $ | 54,327 |   |
| David F. Dalvey       |   | $                          | 36,000 |   |            |   | — |             |   | $      | 13,327                |   |   |   | — |   |   | $ | 49,327 |   |
| Timothy R. Gentz(4)   |   | $                          | 48,500 |   |            |   | — |             |   | $      | 13,327                |   |   |   | — |   |   | $ | 61,827 |   |
| Frederick C. Green IV |   | $                          | 41,000 |   |            |   | — |             |   | $      | 13,327                |   |   |   | — |   |   | $ | 54,327 |   |
| Kathleen P. Iverson   |   | $                          | 36,000 |   |            |   | — |             |   | $      | 13,327                |   |   |   | — |   |   | $ | 49,327 |   |
| Eric H. Paulson(4)    |   | $                          | 23,375 |   |            |   | — |             |   | $      | 13,327                |   |   |   | — |   |   | $ | 36,702 |   |
| Bradley J. Shisler(5) |   | $                          | 36,000 |   |            |   | — |             |   | $      | 13,327                |   |   | $      | 9,500   |   |   | $ | 58,827 |   |
| Tom F. Weyl           |   | $                          | 36,000 |   |            |   | — |             |   | $      | 13,327                |   |   |   | — |   |   | $ | 49,327 |   |
| Richard S Willis(6)   |   | $                          | 16,500 |   |            |   | — |             |   | $      | 13,327                |   |   |   | — |   |   | $ | 29,827 |   |

----

| (1)    | Mr. Deacon is not included in this table because he was an employee of the Company until April 6, 2011 and received no compensation for his services as a director.                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (2)    | No director was eligible for restricted stock awards in FY2012.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (3)    | The amounts in this column represent the grant date fair value of all stock options awarded in FY2011 as determined using the Black-Scholes pricing model. The assumptions used to arrive at the Black-Scholes value are discussed in Note 21 to our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2012. We recognize the expense for financial reporting purposes over the applicable vesting period.                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | As of March 31, 2012, each of the Non-employee Directors had outstanding stock options covering the following total amount of shares of our Common Stock: Mr. Benson, 74,000 shares; Mr. Dalvey, 74,000 shares; Mr. Gentz, 78,000 shares; Mr. Green, 74,000 shares; Ms. Iverson, 80,000 shares; Mr. Paulson, 50,000 shares; Mr. Shisler, 62,000 shares; and Mr. Weyl, 78,000 shares.  Since Mr. Willis was employed by the Company as of March 31, 2012, his outstanding equity grants are shown in the appropriate table under “Executive Compensation.” |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (4)    | The last director term for Mr. Paulson ended on September 15, 2011, at which time Mr. Gentz was appointed Chairman of the Board.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (5)    | All Other Compensation for Mr. Shisler consists of consulting payments paid pursuant to the consulting agreement described in “Certain Relationships and Related Transactions, and Director Independence.”                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (6)    | Mr. Willis was appointed President and CEO on September 15, 2011, at which time his compensation as a director ceased.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |

----

|                                                                          |   | Beneficial Ownership |      |
|-------------------------------------------------------------------------------|--------|----------------------|-----------|
| Directors, and Executive Officers                                             |   | Shares               |      | Percent |   |
| Keith A. Benson                                                               |   |                 | 93,800    | (1) |   |   | * |   |
| David F. Dalvey                                                               |   |                 | 62,000    | (1) |   |   | * |   |
| Timothy R. Gentz                                                              |   |                 | 109,646   | (1) |   |   | * |   |
| Frederick C. Green IV                                                         |   |                 | 78,500    | (1) |   |   | * |   |
| Kathleen P. Iverson                                                           |   |                 | 75,000    | (1) |   |   | * |   |
| Bradley J. Shisler                                                            |   |                 | 54,718    | (1) |   |   | * |   |
| Tom F. Weyl                                                                   |   |                 | 105,000   | (1) |   |   | * |   |
| Richard S Willis                                                              |   |                 | 510,967   | (1) |   |   | 1.37 | % |
| Diane D. Lapp                                                                 |   |                 | 88,818    | (1) |   |   | * |   |
| Ward O. Thomas                                                                |   |                 | 47,284    | (1) |   |   | * |   |
| Joyce A. Fleck                                                                |   |                 | 134,501   | (1)(2) |   |   | * |   |
| All directors and executive officers as a group (11 persons at July 20, 2012) |   |                 | 1,360,234 | (1) |   |   | 3.58 | % |
| Cary L. Deacon(4)                                                             |   |                 | 534,234   | (3) |   |   | 1.44 | % |
| J. Reid Porter(5)                                                             |   |                 | 390,243   | (4) |   |   | 1.05 | % |
| Calvin Morrell(6)                                                             |   |                 | 22,781    | (5) |   |   | * |   |
|                                                                          |   |                 |      |   |   |   |   |   |
| 5% Shareholders                                                               |   |                 |      |   |   |   |   |   |
| Becker Drapkin Management, L.P.                                               |   |                 | 4,959,301 | (6) |   |   | 13.34 | % |
| 300 Crescent Court, Suite 1111                                                |   |                 |      |   |   |   |   |   |
| Dallas, TX 75201                                                              |   |                 |      |   |   |   |   |   |
|                                                                          |   |                 |      |   |   |   |   |   |
| DDEC, Ltd. and C. Daniel Cocanougher                                          |   |                 | 1,955,311 | (7) |   |   | 5.26 | % |
| 6851 NE Loop 820, Suite 200                                                   |   |                 |      |   |   |   |   |   |
| North Richland Hills, TX 76180                                                |   |                 |      |   |   |   |   |   |

----

----

| * | Indicates ownership of less than one percent. |
|---|-----------------------------------------------|

|   | (1) | Includes shares of Common Stock issuable upon exercise of outstanding options exercisable and restricted stock units vesting within sixty days of July 20, 2012 in the following amounts: Keith A. Benson — 62,000  shares; David F. Dalvey — 62,000 shares; Timothy R. Gentz — 66,000 shares; Frederick C. Green IV — 62,000 shares; Kathleen P. Iverson — 68,000 shares; Bradley J. Shisler — 20,667 shares; Tom F. Weyl — 66,000 shares; Richard S Willis — 170,667; Diane D. Lapp —  59,334; Ward O. Thomas —  41,666; Joyce A. Fleck — 103,500 shares; and all directors and executive officers as a group — 781,834 shares. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Includes 10,000 shares owned by Ms. Fleck’s spouse of which Ms. Fleck may be deemed to have shared voting and dispositive power. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | Mr. Deacon’s share ownership includes 334,234 shares of Common Stock owned by Mr. Deacon as of his last date of employment on April 6, 2011 and 200,000 shares of Common Stock subsequently acquired upon the exercise of outstanding stock options. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (4) | Mr. Porter’s share ownership includes: 270,243 shares of Common Stock owned by Mr. Porter as of his last date of employment on October 28, 2011, 52,500 shares of Common Stock subsequently acquired upon the exercise of outstanding stock options, and 67,500 shares of Common Stock shares of Common Stock issuable upon the exercise of Mr. Porter’s remaining vested stock options. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (5) | Mr. Morrell’s share ownership includes 281 shares of Common Stock owned by Mr. Morrell as of his last date of employment on November 14, 2011 and 22,500 shares of Common Stock subsequently acquired upon the exercise of outstanding stock options. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (6) | Based on information provided in Schedule 13D, Amendment 7, dated October 31, 2011, and Form 4, dated December 7, 2011, filed with the Securities and Exchange Commission by Becker Drapkin Management, L.P. (“Management”), Becker Drapkin Partners (QP), L.P. (“QP”), Becker Drapkin Partners, L.P. (“LP”), BD Partners II, L.P. (“Partners”), BC Advisors, LLC (“Advisors”), Steven R. Becker and Matthew A. Drapkin, reporting the following ownership: QP directly owns 1,894,204 shares of Common Stock; LP directly owns 304,858 shares of Common Stock; Partners directly owns 698,189 shares of Common Stock, and a managed account directly owns and has sole voting and dispositive power of 2,062,050 shares of Common Stock. Management is the general partner of each of QP, LP and Partners and as such shares voting and dispositive power of 2,897,251 shares of Common Stock. Management provides investment advisory services for the managed account and may have a pecuniary interest in its 2,062,050 shares of Common Stock as a result of performance related fees. Advisors is the general partner of Management and may be deemed to beneficially own and have shared voting and dispositive power of the shares beneficially owned by Management. Mr. Becker and Mr. Drapkin are the co-managing members of Advisors and each may be deemed to beneficially own and have shared voting and dispositive power of the shares beneficially owned by Advisors. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (7) | Based on information provided in Schedule 13G, dated January 12, 2012, filed with the Securities and Exchange Commission by DDEC, Ltd. and C. Daniel Cocanougher, individually and as the managing member of DDEC Management, LLC which is the managing partner of DDEC, Ltd. and as the father of minors Danielle and Ellen Cocanougher. They report that as of January 12, 2012, DDEC, Ltd. had sole voting and dispositive power of 1,326,543 shares, Mr. Cocanougher had sole voting and dispositive power of 628,768 shares and shared voting and dispositive power of 1,326,543 shares |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                        |   | FY 2012 |    |   | FY 2011 |   |
|-----------------------------|--------|---------|---------|--------|---------|--------|
| Audit Fees(1)          |   | $       | 274,526 |   |    | $      | 293,591 |   |
| Audit-Related Fees(2)  |   |    | — |   |    |   | — |   |
| Tax Fees(3)            |   |    | — |   |    |   | — |   |
| All Other Fees(4)      |   |    | — |   |    |   | — |   |
| Total Fees Billed           |   | $       | 274,526 |   |    | $      | 293,591 |   |

----

| (1)    | “Audit Fees” consists of fees billed for professional services rendered in connection with the audit of our consolidated financial statements for the fiscal years ended March 31, 2012 and 2011, the reviews of the consolidated financial statements included in each of our quarterly reports on Form 10-Q during those fiscal years, and services provided in connection with various registration statements, comfort letters, and the review and attestation of internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002. This category also includes advice on audit and accounting matters that arose during, or as a result of, the audit or the review of interim consolidated financial statements. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (2)    | “Audit-Related Fees” consists of fees billed for assurance and related services in the fiscal years ended March 31, 2012 and 2011 that are reasonably related to the performance of the audit or review of the Company’s consolidated financial statements. There were no fees for this category in FY2012 and FY2011.                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (3)    | “Tax Fees” consists of fees billed for services rendered in connection with tax compliance, tax advice and tax planning. There were no fees for this category in FY2012 and FY2011.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (4)    | “All Other Fees” consists of fees billed for products and services that do not meet the above category descriptions. There were no fees for this category in FY2012 and FY2011.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |

----

|   |                                                                                                   |
|--------|--------------------------------------------------------------------------------------------------------|
| 1.     | Exhibits: The following exhibits are filed as part of, or incorporated by reference into, this report: |

|   |   |                    |
|--------|--------|-------------------------|
|   | Number | Description of Exhibits |

|   | 23.1   | Consent of Independent Registered Public Accounting Firm - Grant Thornton LLP                                                                                    |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                             |
|   | 31.1   | Certification of the Chief Executive Officer  pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rules 13a-14 and 15d-14 of the Exchange Act). |
|   |   |                                                                                                                                                             |
|   | 31.2   | Certification of the Chief Financial Officer  pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rules 13a-14 and 15d-14 of the Exchange Act)  |
|   |   |                                                                                                                                                             |
|   | 32.1   |  Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350)                            |
|   |   |                                                                                                                                                             |
|   | 32.2   | Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350                                   |

----

|          | Navarre Corporation |                                         |
|---------------|---------------------|----------------------------------------------|
|          | (Registrant)        |                                         |
|          |                |                                         |   |
|          |                |                                         |   |
| July 26, 2012 | By:                 | /s/ Richard S Willis                    |   |
|          |                | Richard S Willis                             |   |
|          |                | President and Chief Executive Officer        |   |
|          |                | (Principal Executive Officer)                |   |
|          |                |                                         |   |
|          |                |                                         |   |
| July 26, 2012 | By:                 | /s/ Diane D. Lapp                            |   |
|          |                | Diane D. Lapp                                |   |
|          |                | Chief Financial Officer                      |   |
|          |                | (Principal Financial and Accounting Officer) |   |