NOTE 5 – LONG-TERM LIABILITIES

Long-term debt at June 1, 2012 and June 3, 2011 consists of the following:

In March 2009, the Company established a construction line of credit with interest-only payments due through the end of the construction period at a fixed rate of 4.25%. In September 2009, the loan converted to a 10-year, 4.25% fixed rate equipment note, payable in equal monthly installments based on the final amount drawn during the constrution period which was $4,000,000. In March 2011, the loan was modified by taking the remaining balance of $3,532,700 and adding another $2,900,000 to finance the implementation of a new Enterprise Resource Planning system. At that time, the interest rate on the loan was adjusted to 3.52% and the terms were re-established at 15 years for the new amount of the loan.

	2012			2011
Total equipment note payable	$	6,015,767		$	6,347,650
Less: current portion		(344,528	)		(331,883	)
Total non current portion	$	5,671,239		$	6,015,767

In January 2010, the Company transferred an existing operating lease from one provider to another. Included in the new lease agreement were 5 transport vehicles that were added as a capital lease. The capital portion of the lease is for a term of 4 years at an annual interest rate of 3.69%.

	2012			2011
Total capital lease	$	49,216		$	62,124
Less: current portion		(13,393	)		(12,908	)
Total non current portion	$	35,823		$	49,216



		2012			2011
Total note payable and capital lease	$	6,064,983		$	6,409,774
Less: current portion		(357,921	)		(344,791	)
Total non current portion	$	5,707,062		$	6,064,983

Other long-term obligations at June 1, 2012 and June 3, 2011 consist of the following:

	2012			2011
Salary continuation plan	$	1,279,233		$	1,379,557
Less: current portion		(181,578	)		(167,662	)
Total non current portion	$	1,097,655		$	1,211,895

The Company is accruing the present values of the estimated future retirement payments over the period from the date of the agreements to the retirement dates, for certain key executives. The Company recognized compensation expense of $67,337 and $62,307 for fiscal 2012 and 2011, respectively.