Note 5

9 Months Ended

Jun. 29, 2013

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

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

Note 5            At June 29, 2013, the Company has three stock-based employee compensation plans. Share-based compensation was recognized as follows:

	Three months ended				Nine months ended
	June 29, 2013		June 23, 2012		June 29, 2013		June 23, 2012
	(in thousands, except per share amounts)
Stock Options	$	206	$	191	$	596	$	484
Stock purchase plan		179		112		316		214
Stock issued to outside directors		11		-		35		-
Restricted stock issued to an employee		4		-		13		-
	$	400	$	303	$	960	$	698
Per diluted share	$	0.02	$	0.02	$	0.05	$	0.04
The above compensation is net of tax benefits	$	142	$	47	$	498	$	221

The Company anticipates that share-based compensation will not exceed $1.4 million net of tax benefits, or approximately $.07 per share for the fiscal year ending September 28, 2013.

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 2013 first nine months: expected volatility of 26%; risk-free interest rate of .81%; dividend rate of .9% and expected lives of 5 years.

During the 2013 nine month period, the Company granted 1,600 stock options. The weighted-average grant date fair value of these options was $13.76. During the 2012 nine month period, the Company granted 2,000 stock options. The weighted-average grant date fair value of these options was $11.97. 

Expected volatility is based on the historical volatility of the price of our common shares over the past 55 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.