Note 6

3 Months Ended

Jun. 25, 2011

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

Note 6At June 25, 2011, the Company has three stock-based employee compensation plans.  Share-based compensation was recognized as follows:

	Three months ended				Nine months ended
	June 25,		June 26,		June 25,		June 26,
	2011		2010		2011		2010
	(in thousands, except per share amounts)
Stock Options	$	40	$	127	$	140	$	500
Stock purchase plan		37		53		169		152
Deferred stock issued to outside directors		-		34		46		103
Restricted stock issued to an employee		-		8		-		28
	$	77	$	222	$	355	$	783
Per diluted share	$	-	$	0.01	$	0.02	$	0.04
The above compensation is net of tax benefits	$	84	$	81	$	317	$	198

The Company anticipates that share-based compensation will not exceed $600,000 net of tax benefits, or approximately $.03 per share for the fiscal year ending September 24, 2011.

The fair value of each option grant is estimated on the date of grant using the Black-Scholes options-pricing model with the following weighted average assumptions used for grants in fiscal 2010 first nine months: expected volatility of 28%; risk-free interest rate of 2.14%; dividend rate of 1.2% and expected lives ranging between 5 and 10 years.

During the 2010 nine month period, the Company granted 100,330 stock options.  The weighted-average grant date fair value of these options was $9.11.  No options were issued in the third quarter of 2010 or in the nine month period ended June 25, 2011.

Expected volatility for both years is based on the historical volatility of the price of our common shares over the past 54 months for 5 year options and 10 years for 10 year options.  We use historical information to estimate expected life and forfeitures within the valuation model.  The expected term of awards represents the period of time that options granted are expected to be outstanding.  The risk-free rate for periods within the expected life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.  Compensation cost is recognized using a straight-line method over the vesting or service period and is net of estimated forfeitures.