STOCK OPTIONS

12 Months Ended

Oct. 03, 2015

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

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

12. 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 year ended October 3, 2015, options to purchase 136,500 shares of common stock at an exercise price of $29.60 per share expired unexercised and options to purchase 3,000 shares of common stock at an exercise price of $22.50 were cancelled. During the year ended September 27, 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.

The following table summarizes stock option activity under all plans:

	2015							2014
				Weighted							Weighted
				Average		Aggregate					Average		Aggregate
				Exercise		Intrinsic					Exercise		Intrinsic
	Shares			Price		Value		Shares			Price		Value
Outstanding, beginning of year		704,161		$	21.66				623,100		$	19.69
Options:
Granted		—							205,500		$	22.50
Exercised		(40,861	)	$	12.84				(124,439	)	$	13.29
Canceled or expired		(139,500	)	$	29.36				—
Outstanding and expected to vest, end of year (a)		523,800		$	20.29	$	2,242,140		704,161		$	21.66	$	2,350,258
Exercisable, end of year (a)		422,300		$	19.76	$	2,191,390		498,661		$	21.31	$	2,350,258
Weighted average remaining contractual life		5.5 Years							5.7 Years
Shares available for future grant		43,000							43,000

(a) Options become exercisable at various times and expire at various dates through 2024.

Compensation cost charged to operations for the fiscal years ended October 3, 2015 and September 27, 2014 for share-based compensation programs was approximately $426,000 and $349,000, respectively. The compensation cost recognized is classified as a general and administrative expense in the Consolidated Statements of Income.

As of October 3, 2015, there was approximately $287,000 of unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a period of approximately 0.75 years.