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Note 11 - Share Based Compensation
 12 Months Ended
Dec. 29, 2012
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]
11.SHARE BASED COMPENSATION

During the fiscal year ended December 29, 2012, the Company had four share-based employee compensation plans and an employee stock purchase plan.  

The Company measures the fair value of stock options or awards, if and when granted, based on the Black-Scholes method and using the closing market price of the Company’s common stock on the date of grant.  Grants vest over periods ranging from one to three years and expire within 10 years of issuance. Share-based compensation expense related to awards is amortized in accordance with applicable vesting periods using the straight-line method.  Share-based compensation expense of $169 and $110 was recognized for the fiscal years ended December 29, 2012 and December 31, 2011, respectively.  Share based compensation includes the expense associated with all share-based grants including stock options, restricted share units and the Company’s employee stock purchase plan.

As of December 29, 2012, the Company had approximately $1.8 million of total unrecognized compensation cost related to non-vested awards granted under the Company’s various share-based plans, which the Company expects to recognize over approximately a three-year period.  These amounts do not include the cost of any additional awards that may be granted in future periods or reflect any potential changes in the Company’s forfeiture rate.

The Company granted 55,000 stock options and 350,000 restricted stock units during the fiscal year ended December 29, 2012 and no grants were issued during the fiscal year ended December 31, 2011.  

The risk-free rate of return is based on the yield of U.S. Treasury Strips with terms equal to the expected life of the grants as of the grant date.  The expected term of grant is based on historical stock option exercise experience.  The Company used its historical stock price volatility to compute the expected stock price volatility.  The expected dividend yield is based on the Company’s fiscal 2012 dividend rate.  The annual forfeiture rate is based on the Company’s historical experience.  No share based awards were granted in the fiscal year ended December 31, 2011.  The Black-Scholes option weighted average assumptions used in the valuation of share based awards for the fiscal years ended December 29, 2012 and December 31, 2011 were as follows:

   
Fiscal Years Ended
 
   
December 29,
2012
   
December 31,
2011
 
Weighted average risk-free interest rate
    .71 %     N/A  
Expected term of option (years)
    5       N/A  
Expected stock price volatility
    61 %     N/A  
Expected dividend yield
    0.00 %     N/A  
Annual forfeiture rate
    4.68 %     N/A  
Weighted-average grant date fair value
  $ 2.85       N/A  

1994 Non-employee Directors Stock Option Plan (the 1994 Plan)

The 1994 Plan, approved by the Company’s stockholders in May 1994 and amended in April 1998, provided for the issuance of up to 110,000 shares of common stock to non-employee directors of the Company through February 19, 2004, at which time the 1994 Plan expired.  Options granted under the 1994 Plan were granted at fair market value at the date of grant, and the exercise of options is contingent upon service as a director for a period of one year.  Options granted under the 1994 Plan terminate when an optionee ceases to be a director of the Company.  As of December 29, 2012, options to purchase 0 shares of common stock granted under the 1994 Plan were outstanding.  

1996 Executive Stock Option Plan (the 1996 Plan)

The 1996 Plan, approved by the Company’s stockholders in August 1996 and amended in April 1999, provided for the issuance of up to 1,250,000 shares of common stock to officers and key employees of the Company and its subsidiaries through January 1, 2006, at which time the 1996 Plan expired.  Options are generally granted at fair market value at the date of grant.  The Compensation Committee of the Board of Directors determined the vesting period at the time of grant.  As of December 29, 2012, options to purchase 154,500 shares of common stock granted under the 1996 Plan were outstanding.

2000 Employee Stock Incentive Plan (the 2000 Plan)

The 2000 Plan, approved by the Company’s stockholders in April 2001, provides for the issuance of up to 1,500,000 shares of the Company’s common stock to officers and key employees of the Company and its subsidiaries or to consultants and advisors utilized by the Company.  The Compensation Committee of the Board of Directors could award incentive stock options or non-qualified stock options, as well as stock appreciation rights, and determined the vesting period at the time of grant.  As of December 29, 2012, options to purchase 76,500 shares of common stock granted under the 2000 Plan were outstanding.

The 1994 Plan, 1996 Plan and 2000 Plan are expired and therefore no shares are available for issuance.

2007 Omnibus Equity Compensation Plan (the 2007 Plan)

The 2007 Plan, approved by the Company’s stockholders in June 2007, provides for the issuance of up to 700,000 shares of the Company’s common stock to officers, non-employee directors, employees of the Company and its subsidiaries or to consultants and advisors utilized by the Company.  The maximum aggregate number of shares of our common stock with respect to which all grants may be made under the Plan to any individual during any fiscal year is 300,000 shares.  The maximum aggregate number of shares of our common stock that may be subject to grants of stock units, performance shares, stock awards and other stock-based awards made under the Plan to any individual during any calendar year is 350,000 shares.  The Compensation Committee of the Board of Directors determines the vesting period at the time of grant.  As of December 29, 2012 under the 2007 Plan, 34,100 shares of common stock were available for future grants, options to purchase 76,400 shares of common stock granted and 350,000 restricted stock units were outstanding.

Restricted Stock Units

On November 16, 2012, the Company granted 350,000 restricted stock units all of which fully vest after three years of continued service.  All of these restricted stock units include dividend accrual equivalents, which means that any dividends paid by the Company during the three year vesting period become due and payable after the three year vesting period assuming the grantee’s restricted stock unit fully vests.  Dividends for these grants are accrued on the dividend payment dates and included in accounts payable and accrued expenses on the accompanying consolidated balance sheet.  Dividends for restricted share units that ultimately do not vest are forfeited.

To date, the Company has only issued restricted stock units under the 2007 Plan.  The following summarizes the restricted stock units activity under the 2007 Plan during 2012:

   
Number of Restricted
Stock Units
(in thousands)
   
Weighted Average
Grant Date Fair
Value per Share
 
Outstanding non-vested at January 1, 2012
    0       0  
Granted
    350     $ 5.62  
Vested
    0       0  
Forfeited or expired
    0       0  
Outstanding non-vested at December 29, 2012
    350     $ 5.62  

Based on the closing price of the Company’s common stock of $5.32 per share on December 28, 2012, the intrinsic value of the non-vested restricted stock units at December 29, 2012 was $1.9 million.  As of December 29, 2012, there was approximately $1.6 million of total unrecognized compensation cost related to restricted stock units, which is expected to be recognized over a weighted-average period of approximately 34.5 months.

Stock Option Awards

Transactions related to all stock options under all plans are as follows:

   
All Stock Options Outstanding
 
   
 
Shares
   
Weighted Average
Exercise Price
 
Options outstanding as of January 1, 2011
    1,101,594     $ 4.10  
Options exercised, net
    (71,156 )   $ 3.44  
Options forfeited in cashless exercises
    (66,344 )   $ 3.44  
Options forfeited/cancelled
    (47,500 )   $ 3.22  
                 
Options outstanding as of December 31, 2011
    916,594     $ 4.24  
                 
Options exercisable as of December 31, 2011
    774,400     $ 4.63  
                 
Intrinsic value of outstanding stock options as of December 31, 2011
  $ 1,034          
                 
Intrinsic value of stock options exercised in fiscal year ended December 31, 2011
  $ 262          
                 
Weighted average grant date fair value of stock options issued during fiscal year ended December 31, 2011
    N/A          
                 
Options outstanding as of December 31, 2011
    916,594     $ 4.24  
Options granted
    55,000     $ 5.54  
Options exercised, net
    (392,376 )   $ 3.85  
Options forfeited in cashless exercises
    (243,268 )        
Options forfeited/cancelled
    (28,550 )   $ 3.88  
                 
Options outstanding as of December 29, 2012
    307,400     $ 5.34  
                 
Options exercisable as of December 29, 2012
    252,400     $ 5.29  
                 
Intrinsic value of outstanding stock options as of December 29, 2012
  $ 167          
                 
Intrinsic value of stock options exercised in fiscal year ended December 29, 2012
  $ 1,468          
                 
Weighted average grant date fair value of stock options issued during fiscal year ended December 29, 2012
  $ 2.85          

A summary of the status of our nonvested stock options outstanding as of December 29, 2012, and changes during the year then ended is presented as follows:

 
 
Nonvested Stock Options
 
 
Shares
   
Weighed-Average
Grant-Date
Fair Value
 
Nonvested at December 31, 2011
    142,194     $ 1.12  
Vested
    125,944     $ 1.12  
Forfeited
    (16,250 )   $ 1.05  
Issued nonvested
    55,000     $ 2.85  
Nonvested at December 29, 2012
    55,000     $ 2.85  

The following table summarizes information about stock options outstanding at December 29, 2012:

Range of
Exercise Prices
   
Number of
Outstanding Options
   
Weighted-Average
Remaining
Contractual Life
   
Weighted-Average
Exercise Price
 
     
Outstanding
   
Vested
   
Outstanding
   
Vested
   
Outstanding
   
Vested
 
$2.50 -  $3.48       8,500       8,500       5.07       5.07     $ 2.79     $ 2.79  
$4.16 -  $5.62       256,400       201,400       4.14       2.66     $ 4.80     $ 4.60  
$6.44 -  $9.16       17,500       17,500       3.95       3.95     $ 8.01     $ 8.01  
$9.81 -  $9.81       25,000       25,000       4.55       4.55     $ 9.81     $ 9.81  
            307,400       252,400                                  

Employee Stock Purchase Plan

The Company implemented the 2001 Employee Stock Purchase Plan (the “Purchase Plan”) with shareholder approval, effective January 1, 2001.  Under the Purchase Plan, employees meeting certain specific employment qualifications are eligible to participate and can purchase shares of common stock semi-annually through payroll deductions at the lower of 85% of the fair market value of the stock at the commencement or end of the offering period.  The purchase plan permits eligible employees to purchase shares of common stock through payroll deductions for up to 10% of qualified compensation.  During the fiscal years ended December 29, 2012 and December 31, 2011, there were 29,205 and 43,407 shares issued under the Purchase Plan for net proceeds of $128 and $168, respectively.  As of December 29, 2012, there were 247,752 shares available for issuance under the Purchase Plan.  Compensation expense, representing the discount to the quoted market price, for the Purchase Plan for the fiscal years ended December 29, 2012 and December 31, 2011 was $65 and $58, respectively.