11.

SHARE BASED COMPENSATION

December 30, 2017,

the Company had

two

share-based employee compensation plans. The Company measures the fair value of share-based 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. Awards vest over periods ranging from

one

three

years and expire within

years of issuance. Share-based compensation expense related to time-based awards is amortized in accordance with applicable vesting periods using the straight-line method. The Company vests performance-based awards only when the performance metrics are likely to be achieved and the associated awards are therefore likely to vest. Performance-based share awards that are likely to vest are also expensed on a straight-line basis over the vesting period but

may

vest on a retroactive basis or be reversed, depending on when it is determined that they are likely to vest, or in the case of a reversal when they are later determined to be unlikely to vest.

Share-based compensation expense of $

770

and

$901

was recognized for the fiscal years ended

December 30, 2017

and

December 31, 2016,

respectively.

Share based compensation for the fiscal years ended

December 30, 2017

and

December 31, 2016

did

not

include any expense associated with performance-based awards since they were, as of

December 30, 2017

and

December 31, 2016

, determined to be unlikely to vest.

As of

December 30, 2017,

the Company had approximately

$0.4

million of total unrecognized compensation cost related to all time-based non-vested share-based awards granted under the Company’s various share-based plans, which the Company expects to recognize over fiscal

2017.

These amounts do

not

include a) performance-based restricted stock units, b) the cost of any additional share-based awards that

may

be granted in future periods or c) the impact of any potential changes in the Company’s forfeiture rate. During fiscal

2016,

the Company’s Compensation Committee of the Board of Directors adopted a Long Term Incentive Plan (“LTIP”) for certain executives. The LTIP is anticipated to issue restricted share units each fiscal year that are contingent upon achieving certain performance metrics as defined by the Compensation Committee over a

three

fiscal year performance period. The Company issued

200,000

such performance-based restricted share units in fiscal

2017.

As of

December 30, 2017,

these performance-based restricted share units were deemed unlikely to vest and therefore

expense has been recognized

2014

Omnibus Equity Compensation Plan (the

2014

Plan)

The

2014

Plan, approved by the Company

’s stockholders in

December 2014,

provides for the issuance of up to

625,000

shares of the Company’s common stock to officers, non-employee directors, employees of the Company and its subsidiaries or consultants and advisors utilized by the Company. The Compensation Committee of the Board of Directors determines the vesting period at the time of grant.

In fiscal

2016,

the Company amended the

2014

Plan with shareholder approval to increase the aggregate number of shares of stock reserved for issuance under the Plan by an additional

500,000

shares so that the total number of shares of stock reserved for issuance under the Plan shall be

1,125,000

shares and to extend the expiration date of the Plan to

December 1, 2026.

As of

December 30, 2017,

under the

2014

Plan,

87,034

time-based and

400,000

performance-based restricted share units were outstanding and

332,232

shares were available for awards thereunder.

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

, subject to maximum purchases in any

one

fiscal year of

3,000

shares.

In fiscal

2015,

the Company amended the Purchase Plan with shareholder approval to increase the aggregate number of shares of stock reserved for issuance or transfer under the Plan by an additional

300,000

shares so that the total number of shares of stock reserved for issuance or transfer under the Plan shall be

1,100,000

shares and to extend the expiration date of the Plan to

December 31, 2025.

During the fiscal years ended

December 30, 2017

and

December 31, 2016,

there were

90,931

and

81,225

shares issued under the Purchase Plan for net proceeds of

$394

and

$368,

respectively. As of

December 30, 2017,

there were

177,280

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 30, 2017

and

December 31, 2016

was

$114

and

$108,

respectively.

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 2, 2016		44,500		$	8.12
Options granted		-
Options exercised, net		(2,500	)	$	5.62
Options forfeited/cancelled		-

Options outstanding as of December 31, 2016		42,000		$	8.27

Options exercisable as of December 31, 2016		27,000		$	9.47

Intrinsic value of outstanding stock options as of December 31, 2016	$	6

Intrinsic value of stock options exercised in fiscal year ended December 31, 2016	$	3

Weighted average grant date fair value of stock options issued during fiscal year ended December 31, 2016		N/A

Options outstanding as of December 31, 2016		42,000		$	8.27
Options granted		-
Options exercised, net		(11,917	)	$	6.00
Options forfeited in cashless exercises		(5,083	)	$	6.10
Options forfeited/cancelled		(25,000	)	$	9.81

Options outstanding as of December 30, 2017		-

Options exercisable as of December 30, 2017		-

Intrinsic value of outstanding stock options as of December 30, 2017		-

Intrinsic value of stock options exercised in fiscal year ended December 30, 2017		17

Weighted average grant date fair value of stock options issued during fiscal year ended December 30, 2017		-

Stock Option Awards (Continued)

A summary of the status of our nonvested stock options outstanding as of

December 30, 2017,

and changes during the year then ended is presented as follows:

Nonvested Stock Options	Shares		Weigh ted-Average Grant-Date Fair Value
Nonvested at December 31, 2016		15,000	$	2.33
Vested		15,000	$	2.33
Forfeited		-		-
Issued nonvested		-		-
Nonvested at December 30, 2017		-		-

Time-Based Restricted Stock Units

From time-to-time

the Company issues time-based restricted stock units. These time-based restricted stock units typically include dividend accrual equivalents, which means that any dividends paid by the Company during the vesting period become due and payable after the 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 time-based restricted stock units that ultimately do

not

vest are forfeited.

To date, the Company has only issued

time-based restricted stock units under the

2007

and

2014

Plans. The following summarizes the activity in the time-based restricted stock units under the

2007

and

2014

Plans during the

fifty-two

week period ended

December 30, 2017:

	Number of Time-Based Restricted Stock Units			Weighted Average Grant Date Fair Value per Share
Outstanding non-vested at December 31, 2016		197,734		$	7.33
Granted		87,034		$	5.88
Vested		(197,734	)	$	7.33
Forfeited or expired		-			-
Outstanding non-vested at December 30, 2017		87,034		$	5.88

Based on the closing price of the Company

’s common stock of

$6.25

per share on

December 29, 2017 (

the last trading day prior to

December 30, 2017),

the intrinsic value of the time-based non-vested restricted stock units at

December 30, 2017

was approximately

$0.5

million. As of

December 30, 2017,

there was approximately

$0.4

million of total unrecognized compensation cost related to time-based restricted stock units, which is expected to be recognized over the vesting period of the restricted stock units.

Performance Based Restricted Stock Units

From time-to-time the Company issues performance-based restricted stock units to its executives.

Performance-based restricted stock units are typically vested based on certain multi-year performance metrics as determined by the Board of Directors Compensation Committee. These performance-based restricted stock units typically include dividend accrual equivalents, which means that any dividends paid by the Company during the vesting period become due and payable after the vesting period on any stock units that actually vest, if any. 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 performance-based restricted stock units that ultimately do

not

vest are forfeited.

To date, the Company has only issued performance-based restricted stock units under

the

2014

Plan. The following summarizes the activity in the performance-based restricted stock units during

2017:

	Number of Performance- Based Restricted Stock Units		Weighted Average Grant Date Fair Value per Share
Outstanding non-vested at December 31, 2016		200,000	$	5.36
Granted		200,000	$	4.85
Vested		-		-
Forfeited or expired		-		-
Outstanding non-vested at December 30, 2017		400,000	$	5.11

As of

December 30, 2017,

the Company considers the metrics related to

400,000

of the performance-based restricted stock units unlikely to be achieved, thus

performance condition is probable of achievement and

compensation cost has been recognized on the performance-based restricted stock units. The Company will reassess at each reporting date whether achievement of any performance condition is probable and would begin recognizing compensation cost if and when achievement of the performance condition becomes probable. The Company will then recognize the appropriate expense cumulatively in the year performance becomes probable and recognize the remaining compensation cost over the remaining requisite service period.

	Number of Restricted Stock Units (in thousands)			Weighted Average Grant Date Fair Value per Share
Outstanding non-vested at January 2, 2016		209		$	7.10
Granted – time-based vesting		63		$	5.98
Granted – performance-based vesting		200		$	5.36
Vested		(74	)	$	5.56
Forfeited or expired		-			-
Outstanding non-vested at December 31, 2016		398		$	6.34
Granted – time-based vesting		87		$	5.88
Granted – performance-based vesting		200		$	4.85
Vested		(198	)	$	7.33
Forfeited or expired		-			-
Outstanding non-vested at December 30, 2017		487		$	5.24

Based on the closing price of the Company

’s common stock of

$6.25

per share on

December 29, 2017,

the intrinsic value of the non-vested time-based restricted share units at

December 30, 2017

was

$0.5

million. This amount does

not

include any intrinsic value that

may

be associated with the performance-based restricted share units that are deemed unlikely to vest.