Note 5 - Stock-based Compensation

12 Months Ended

Aug. 26, 2012

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

5.             STOCK-BASED COMPENSATION

Stock Options - The 2005 Stock Option Plan was approved and 600,000 shares of common stock were reserved for granting of options to officers, key employees and directors.  The Plan has a term of 10 years and will expire in 2015.  Stock options vest over a period of six months to three years.

Option transactions during the three years ended August 26, 2012 are summarized as follows:

	2005 Stock Option Plan
	Shares			Average Price
Outstanding at August 30, 2009		174,666		$	4.08
Granted		45,000			2.32
Forfeited		-			-
Exercised		-			-
Outstanding at August 29, 2010		219,666		$	3.72
Granted		61,000			5.39
Forfeited		(7,000	)		4.18
Exercised		(25,500	)		3.30
Outstanding at August 28, 2011		248,166		$	4.16
Granted		47,500			5.09
Forfeited		(3,500	)		4.99
Exercised		(27,666	)		3.02
Outstanding at August 26, 2012		264,500		$	4.44

Of the 27,666 and 25,500 stock options from the 2005 Plan that were exercised in fiscal 2012 and 2011, 17,265 and 9,992 shares were returned to the Company to pay for the exercise price and for related payroll withholding taxes, respectively.

The weighted fair value of options granted during the years ended August 26, 2012, August 28, 2011 and August 29, 2010 was $2.86, $3.10 and $1.74, respectively.  The total intrinsic value of options exercised for the years August 26, 2012, August 28, 2011 and August 29, 2010 was $111,922, $73,235 and $0, respectively.  The intrinsic value for options outstanding at August 26, 2012 was $731,335.

Cash received from option exercises for years ended August 26, 2012, August 28, 2011 and August 29, 2010 was $0, $32,510 and $0, respectively.  The actual tax benefit realized for the tax deductions from option exercises totaled $ 32,384, $21,901 and $0 for fiscal years 2012, 2011 and 2010, respectively.

As of August 26, 2012, there was $133,800 of total unearned compensation cost related to option-based compensation arrangements to be recognized over an expected weighted average of 1 year.

As of August 26, 2012, there were 21,000 shares with an exercise price of $2.13, 86,500 shares with exercise prices between $3.00 and $3.47 and 157,000 options outstanding with exercise prices between $4.93 and $6.82.  At August 26, 2012, outstanding options had a weighted-average remaining contractual life of 7 years.

The number of options exercisable as of August 26, 2012, August 28, 2011 and August 29, 2010 were 212,496, 193,999 and 169,999, respectively, at weighted average share prices of $ 4.24, $4.02 and $3.89 per share, respectively.  At August 26, 2012, there were 52,004 options that had not vested.  The aggregate intrinsic values of options exercisable as of August 26, 2012, August 28, 2011, and August 29, 2010 was $629,192, $265,847, and $14,387, respectively, with weighted-average remaining contractual lives of 6.4, 6.5, and 7.1 years.

The Company also grants non-vested restricted shares as part of the 2005 Stock Option Plan.  These shares typically vest over a three year period and sometimes contain required minimum threshold levels before the shares are earned.  Non-vested restricted share transactions during the three years ended August 26, 2012 are as follows:

	Options			Average Price
Outstanding at August 30, 2009		86,139			4.20
Granted		58,405			2.38
Vested		( 20,129	)		4.72
Forfeited		(41,104	)		3.78
Outstanding at August 29, 2010		83,311			3.00
Granted		37,715			6.13
Vested		(22,478	)		2.46
Forfeited		(44,405	)		4.33
Outstanding at August 28, 2011		54,143		$	5.08
Granted		38,662			5.52
Vested		(22,537	)		3.77
Forfeited		(19,661	)		6.77
Outstanding at August 26, 2012		50,607		$	5.35

As of August 26, 2012, there was $102,486 in total unrecognized compensation cost related to non-vested restricted stock compensation arrangements granted under the Plan.  That cost is expected to be recognized over a weighted average period of 1 year.  The total intrinsic value of restricted stock options that vested during the year ended August 26, 2012 was $114,201