Share-based Compensation Plans

12 Months Ended

Dec. 27, 2014

Compensation and Retirement Disclosure [Abstract]

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 2,923,500 shares of common stock are available for issuance, of which 1,707,495 shares remain available for grant as of December 27, 2014.

As of December 27, 2014, 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 27, 2014 there are 111,000 options outstanding under the 1999 Plan.

A summary of stock option activity for all the above plans as of December 27, 2014 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	1,346,155	$ 1.39
Granted	153,500	$ 2.87
Exercised	(115,050)	$ 0.97
Forfeited	(4,000)	$ 1.53
Expired	(53,600)	$ 0.70
	-------------	-------------
Outstanding at
end of year	1,327,005	$ 1.63	6.20	$ 1,757,317
	========			=========
Options exercisable
at year-end	874,384	$ 1.58	5.51	$ 874,384
	=======			========

The total intrinsic value of options exercised during fiscal years 2014, 2013 and 2012 was $330,773, $310,170 and $28,835, respectively. As of December 27, 2014, there was $398,008 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 1.3 years.

Cash received from option exercises under all share-based payment arrangements was $111,726, $93,360, and $9,333, for the years ended December 27, 2014, December 28, 2013 and December 29, 2012, 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 2014 and 2013:

	2014	2013
Risk-free interest rate	0.91-2.16%	1.62%
Expected life in years	9	9
Expected volatility	53%	53%
Expected dividend yield	0	0
Weighted average fair value of grants	$ 1.74	$ 0.60

All options are granted with an exercise price equal to the fair market value of the underlying common stock on the date of grant. There were no options granted in 2012.

The Company recognized $348,649, $248,535 and $242,793 as compensation expense related to total stock options outstanding in 2014, 2013 and 2012, respectively. The expense in 2012 included $20,500 associated with extending the option exercise period for five individuals terminated during the year. Their options were extended to the lesser of four years or the original expiration date of the option.

A tax benefit of $25,716, $117,401 and $0 was recognized as additional paid in capital in the years ended December 27, 2014, December 28, 2013 and December 29, 2012, respectively, resulting from the excess tax benefit of share-based awards over the cumulative compensation expense recognized for financial reporting.