Commitments and Contingencies

12 Months Ended

Dec. 30, 2011

Commitments and Contingencies

Note 15 — Commitments and Contingencies

Lease Obligations

The Company leases certain property, plant and equipment under capital and operating lease agreements. These leases vary in duration and many contain renewal options and/or escalation clauses.  Current and long-term obligations under capital leases are included in total current liabilities and total long-term liabilities in the Company’s Consolidated Balance Sheets.

Estimated future minimum lease payments under leases having initial or remaining non-cancelable lease terms in excess of one year as of December 30, 2011 were approximately as follows (in thousands):

Fiscal Year	Operating Leases		Capital Leases
2012	$	2,307	$	947
2013		2,010		774
2014		1,870		152
2015		1,437		39
2016		1,381		—
Thereafter		—		—
Total minimum lease payments	$	9,005	$	1,912
Less amounts representing interest		—		(191	)
	$	9,005	$	1,721

Rent expense was approximately $1.8 million, $1.8 million, and $2.2 million for the years ended December 30, 2011, December 31, 2010, and January 1, 2010, respectively (adjusted for Domilens).

The Company had the following assets under capital lease at December 30, 2011 and December 31, 2010 (in thousands):

	2011		2010
Machinery and equipment	$	3,414	$	3,385
Furniture and fixtures		1,255		1,185
Leasehold improvements		133		133
		4,802		4,703
Less accumulated depreciation		3,388		3,033
	$	1,414	$	1,670

Depreciation expense for assets under capital lease for each of the years ended December 30, 2011, December 31, 2010, and January 1, 2010, was approximately $615,000, $713,000, and $1,020,000, respectively.

Indemnification Agreements

The Company has entered into indemnification agreements with its directors and officers that may require the Company: (a) to indemnify them against liabilities that may arise by reason of their status or service as directors or officers, except as prohibited by applicable law; (b) to advance their expenses incurred as a result of any proceeding against them as to which they could be indemnified; and (c) to make a good faith determination whether or not it is practicable for the Company to obtain directors’ and officers’ insurance. The Company currently has directors’ and officers’ liability insurance through a third party carrier.

Tax Filings

The Company’s tax filings are subject to audit by taxing authorities in jurisdictions where it conducts business. These audits may result in assessments of additional taxes that are subsequently resolved with the authorities or potentially through the courts. Management believes the Company has adequately provided for any ultimate amounts that are likely to result from these audits; however, final assessments, if any, could be significantly different than the amounts recorded in the consolidated financial statements.

Employment Agreements

The Company’s Chief Executive Officer and certain other officers have as provisions of their employment agreements certain rights, including continuance of cash compensation and benefits, upon a “change in control,” which may include an acquisition of substantially all of its assets, or termination “without cause or for good reason” as defined in the employment agreements.

Litigation and Claims

From time to time the Company is subject to various claims and legal proceedings arising out of the normal course of our business. These claims and legal proceedings relate to contractual rights and obligations, employment matters, and claims of product liability. STAAR maintains insurance coverage for product liability claims but may not be insured against other potentially material claims. While the Company does not believe that any of the claims known is likely to have a material adverse effect on its financial condition or results of operations, new claims or unexpected results of existing claims could lead to significant financial harm.