STOCK BASED COMPENSATION

9 Months Ended

Sep. 29, 2012

STOCK BASED COMPENSATION

STOCK BASED COMPENSATION

2.STOCK BASED COMPENSATION

Stock-based compensation expense for all stock-based awards programs, including grants of stock options, is recorded in accordance with “Compensation-Stock Compensation”, Topic 718 of the Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”). During the 39- and 13-week periods ended September 29, 2012, the Company recognized approximately $230,000 and $68,000, respectively, in stock-based compensation expense and for the comparable periods ended October 1, 2011, the Company recognized approximately $287,000 and $83,000 respectively. The grant date fair value for stock options is calculated using the Black-Scholes option valuation model. The Company granted no stock options during the 39- and 13-week periods ended September 29, 2012 and October 1, 2011.  No excess tax benefits were recognized from the exercise of stock options during the 39-week periods ended September 29, 2012 and October 1, 2011. During the first quarter of fiscal 2012, 14,000 shares of the Company’s common stock were issued for services to its board members. The total fair value of the issued common stock was approximately $95,000 of which, approximately $71,000 and $23,000 were included in stock-based compensation expense for the 39-and 13-week periods ended September 29, 2012, respectively. The remaining cost is expected to be recognized over the remainder of fiscal 2012. Comparatively, during the first quarter of fiscal 2011, 21,200 shares of the Company’s common stock were issued for services to its board members. The total fair value of the issued common stock was approximately $86,000, of which approximately $64,000 and $21,000 were included in stock-based compensation expense for the 39- and 13-week periods ended October 1, 2011, respectively.

During the 39- week period ended September 29, 2012, the Company granted 12,000 shares of restricted stock awards of the Company’s common stock, which had a weighted average grant date fair value of $6.70. These restricted shares will contingently vest over a three-year period, based on the Company meeting performance goals. During the 13- week period ended September 29, 2012, the Company granted no restricted stock awards of the Company’s common stock.  Comparatively, during the 39 and 13-week periods ended October 1, 2011, the Company granted restricted stock awards representing 52,000 and 6,000 shares, respectively, of the Company’s common stock, which had a weighted average grant date fair value of $4.54 and $5.53, respectively. A portion of these restricted stock awards will contingently vest over a three-year period, based on the Company meeting performance goals, and a portion will vest over the requisite service period.