Share-Based Compensation Plans

12 Months Ended

Dec. 31, 2011

Notes to Financial Statements

Share-Based Compensation Plans

(5) Share-Based Compensation Plans

The Company adopted the 2009 Stock Incentive Plan ("2009 Plan") on December 10, 2009. Under the terms of the 2009 Plan all of the Company`s employees, officers, directors, consultants and advisors are eligible to be granted options, restricted stock awards, or other stock-based awards. All outstanding options are nonstatutory stock options exercisable at the fair market value of the stock on the date of grant, and expire ten years from the date of grant. The options granted to employees generally vest in equal annual installments over a five-year period. The options granted to directors generally vest one year from date of grant.

Under the 2009 Plan a total of 1,500,000 shares of common stock are available for issuance, of which 566,895 shares remain available for grant as of December 31, 2011.

As of December 31, 2011, the 2009 Plan is the only stock option plan from which awards can be made as all other option plans have expired. The 1999 Stock Option Plan (“1999 Plan”) expired on January 22, 2009 and no additional options can be granted from the plan. As of December 31, 2011 there are 507,250 options outstanding under the 1999 Plan.

A summary of stock option activity for all the above plans as of December 31, 2011 and changes during the year then ended is presented below:

		Weighted	Weighted
		Average	Remaining	Aggregate
		Exercise	Contractual	Intrinsic
	Shares	Price	Life (years)	Value
Outstanding at
beginning of year	1,535,605	$ 1.07
Granted	124,000	$ 2.00
Exercised	(223,100)	$ 0.45
Forfeited/expired	(12,250)	$ 0.40
	-------------
Outstanding at
end of year	1,424,255	$ 1.25	6.44	$ 849,907
	=======			=======
Options exercisable
at year-end	721,771	$ 0.90	4.20	$ 682,892
	=======			=======

The total intrinsic value of options exercised during fiscal years 2011, 2010 and 2009 was $321,842, $58,190 and $73,180, respectively. As of December 31, 2011, there was $827,504 of total unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the plans; that cost is expected to be recognized over a weighted average period of 4.5 years.

Cash received from option exercises under all share-based payment arrangements was $99,533, $35,360 and $0, for the years ended December 31, 2011, December 25, 2010 and December 26, 2009, respectively.

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The following table presents the annualized weighted average values of the significant assumptions used to estimate the fair values of the options granted during each year:

	2011	2010	2009
Risk-free interest rate	2.45%	2.45%	3.05%
Expected life in years	9	7	7
Expected volatility	82%	84%	126%
Expected dividend yield	0	0	0
Weighted average fair value of grants	$ 1.60	$ 1.15	$ 1.19

All options are granted with an exercise price equal to the fair market value of the underlying common stock on the date of grant.

The Company recognized $210,125, $163,431 and $10,320 as compensation expense related to stock options granted in 2011, 2010 and 2009, respectively. A tax benefit of $119,750 and $23,149 was recognized as additional paid in capital in the years ended December 31, 2011 and December 25, 2010, respectively, resulting from the excess tax benefit of share-based awards over the cumulative compensation expense recognized for financial reporting.