NOTE 5 – LONG-TERM LIABILITIES

Long-term debt at May 31, 2013 and June 1, 2012 consists of the following:

In March 2009, the Company established a construction line of credit with interest-only payments due through the end of the construction period at a fixed rate of 4.25%. In September 2009, the loan converted to a 10-year, 4.25% fixed rate equipment note, payable in equal monthly installments based on the final amount drawn during the constrution period which was $4,000,000. In March 2011, the loan was modified by taking the remaining balance of $3,532,700 and adding another $2,900,000 to finance the implementation of a new Enterprise Resource Planning system. At that time, the interest rate on the loan was adjusted to 3.52% and the terms were re-established at 15 years for the new amount of the loan.

	2013			2012
Total equipment note payable	$	5,671,240		$	6,015,767
Less: current portion		(357,027	)		(344,528	)
Total non current portion	$	5,314,213		$	5,671,239


In January 2010, the Company transferred an existing operating lease from one provider to another. Included in the new lease agreement were 5 transport vehicles that were added as a capital lease. The capital portion of the lease is for a term of 4 years at an annual interest rate of 3.69%.

		2013			2012
Total capital lease	$	35,823		$	49,216
Less: current portion		(35,823	)		(13,393	)
Total non current portion	$	0		$	35,823



		2013			2012
Total note payable and capital lease	$	5,707,063		$	6,064,983
Less: current portion		(392,850	)		(357,921	)
Total non current portion	$	5,314,213		$	5,707,062

Other long-term obligations at May 31, 2013 and June 1, 2012 consist of the following:

	2013			2012
Salary continuation plan	$	1,229,459		$	1,279,233
Less: current portion		(196,649	)		(181,578	)
Total non current portion	$	1,032,810		$	1,097,655

The Company is accruing the present values of the estimated future retirement payments over the period from the date of the agreements to the retirement dates, for certain key executives. The Company recognized compensation expense of $131,804 and $67,337 for fiscal 2013 and 2012, respectively.