Note 11. Share Based Compensation

12 Months Ended

Dec. 31, 2011

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

11.   SHARE BASED COMPENSATION

At December 31, 2011, the Company had five share-based employee compensation plans.  The Company measures the fair value of stock options, 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.  Stock options 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 over with applicable vesting periods using the straight-line method.

Share-based compensation expense of $110 and $317 was recognized for the fiscal years ended December 31, 2011 and January 1, 2011, respectively.

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 options as of the grant date.  The expected term of option 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 practice of not paying dividends.  The annual forfeiture rate is based on the Company’s historical experience.  No stock options were granted in the fiscal year ended December 31, 2011.  The Black-Scholes option weighted average assumptions used in the valuation of stock options for the fiscal years ended December 31, 2011 and January 1, 2011 were as follows:

	Fiscal Years Ended
	December 31, 2011		January 1, 2011
Weighted average risk-free interest rate		N/A		2.52	%
Expected term of option		N/A	5 years
Expected stock price volatility		N/A		65	%
Expected dividend yield		N/A	$	0.0
Annual forfeiture rate		N/A		6.12	%
Weighted-average grant date fair value		N/A	$	1.99

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 31, 2011, options to purchase 10,000 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 31, 2011, options to purchase 550,500 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 31, 2011, options to purchase 233,194 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 31, 2011, 437,600 shares of common stock were available for future grants under the 2007 Plan, and options to purchase 122,900 shares of common stock granted under the 2007 Plan were outstanding.

As of December 31, 2011, the Company had approximately $44 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 options that may be granted in future periods or reflect any potential changes in the Company’s forfeiture rate.

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 2, 2010		1,564,594		$	3.87
Options granted		20,000		$	3.48
Options exercised, net		(185,495	)	$	2.64
Options forfeited in cashless exercises		(226,505	)	$	3.32
Options forfeited/cancelled		(71,000	)	$	5.07
Options outstanding as of January 1, 2011		1,101,594		$	4.10
Options exercisable as of January 1, 2011		887,400		$	4.57
Intrinsic value of outstanding stock options as of January 1, 2011	$	845
Weighted average grant date fair value of stock options issued during fiscal year ended January 1, 2011	$	1.99
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
Weighted average grant date fair value of stock options issued during fiscal year ended December 31, 2011		N/A

A summary of the status of our nonvested stock options outstanding as of December 31, 2011, and changes during the year then ended is presented as follows:

Nonvested Stock Options	Shares			Weighed-Average Grant-Date Fair Value
Nonvested at January 1, 2011		214,194		$	1.17
Vested		(45,000	)	$	1.43
Forfeited		(27,000	)	$	1.05
Nonvested at December 31, 2011		142,194		$	1.12

The following table summarizes information about stock options outstanding at December 31, 2011:

Range of Exercise Prices	Number of Outstanding Options				Weighted-Average Remaining Contractual Life				Weighted-Average Exercise Price
	Outstanding		Vested		Outstanding		Vested		Outstanding		Vested
$1.73 - $2.50		147,194		15,000		7.70		7.55	$	2.03	$	1.78
$3.48 - $4.91		692,500		682,500		3.13		3.06	$	4.36	$	4.37
$5.26 - $6.91		41,900		41,900		4.04		4.04	$	5.68	$	5.68
$9.16 - $9.81		35,000		35,000		5.54		5.54	$	9.62	$	9.62
		916,594		774,400

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 31, 2011 and January 1, 1011, there were 43,407 and 74,172 shares issued under the Purchase Plan for net proceeds of $168 and $149, respectively.  As of December 31, 2011, there were 276,957 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 31, 2011 and January 1, 2011 was $58 and $60, respectively.