STOCK OPTIONS

9 Months Ended

Jun. 28, 2014

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

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

10. STOCK OPTIONS

The Company has options outstanding under two stock option plans, the 2004 Stock Option Plan (the “2004 Plan”) and the 2010 Stock Option Plan (the “2010 Plan”), which was approved by shareholders in the second quarter of 2010. Effective with this approval, the Company terminated the 2004 Plan. This action terminated the 400 authorized but unissued options under the 2004 Plan, but it did not affect any of the options previously issued under the 2004 Plan. Options granted under the 2004 Plan are exercisable at prices at least equal to the fair market value of such stock on the dates the options were granted. The options expire ten years after the date of grant.

The 2010 Stock Option Plan is the Company’s only equity compensation plan currently in effect. Under the 2010 Stock Option Plan, 500,000 options were authorized for future grant. Options granted under the 2010 Plan are exercisable at prices at least equal to the fair market value of such stock on the dates the options were granted. The options expire ten years after the date of grant.

During the 13-week period ended June 28, 2014, options to purchase 205,500 shares of common stock at an exercise price of $22.50 per share were granted employees and directors of the Company. Such options are exercisable as to 50% of the shares commencing on the first anniversary of the date of grant and as to the remaining 50% commencing on the second anniversary of the date of grant. The grant date fair value of these stock options was $4.03 per share.

The fair value of each of the Company’s stock options is estimated on the date of grant using a Black-Scholes option-pricing model that uses assumptions that relate to the expected volatility of the Company’s common stock, the expected dividend yield of our stock, the expected life of the options and the risk free interest rate. The assumptions used for the 2014 grant include a risk free interest rate of 2.62%, volatility of 33.8%, a dividend yield of 6.0% and an expected life of 6.25 years.

A summary of stock option activity is presented below:

	2014
	Shares			Weighted Average Exercise Price		Weighted Average Contractual Term		Aggregate Intrinsic Value
Outstanding, beginning of period		623,100		$	19.56		5.50 Years
Options:
Granted		205,500		$	22.50		10.00 Years
Exercised		(110,363	)	$	12.88
Canceled or expired		—
Outstanding and expected to vest, end of period		718,237		$	21.43		6.00 Years	$	2,477,676
Exercisable, end of period		512,737		$	21.15		4.50 Years	$	2,477,676

Compensation cost charged to operations for the 39-week periods ended June 28, 2014 and June 29, 2013 was $244,000 and $238,000, respectively, and for the 13-week periods ended June 28, 2014 and June 29, 2013 was $87,000 and $79,000 respectively. The compensation cost recognized is classified as a general and administrative expense in the Consolidated Condensed Statements of Income.

As of June 28, 2014, there was approximately $817,000 of unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a period of approximately two years.