Stock-based compensation plans

9 Months Ended

Jul. 02, 2011

Stock-based compensation plans [Abstract]

Stock-based compensation plans

(3)           Stock-based compensation plans

Under the Company's 1996 Equity Incentive Plan (the “Plan”) there were 238,000 shares reserved and available for grant at July 2, 2011. There were no options granted or exercised in the nine month periods ended July 2, 2011 and July 3, 2010, respectively.

Recipients of grants must execute a standard form of non-competition agreement. The Plan provides for the grant of Restricted Stock, Restricted Stock Units, Options, and Stock Appreciation Rights (“SARs”). SARs may be awarded either separately, or in relation to options granted, and for the grant of bonus shares. Options granted are exercisable at a price not less than fair market value on the date of grant.

A summary of option activity for all plans for the nine months ended July 2, 2011 is as follows:

	Options No. of shares		Weighted average Exercise Price		Weighted average remaining contractual life (years)		Aggregate Intrinsic Value
Outstanding at September 30, 2010		46,000	$	5.62	2.3 years		$	25,400
Granted		-	$	-		-	$	-
Exercised		-	$	-		-	$	-
Cancelled		-	$	-		-	$	-
Outstanding at July 2, 2011		46,000	$	5.62	1.3 years		$	79,500
Exercisable at July 2, 2011		39,500	$	5.65	1.3 years		$	68,100
Exercisable and expected to  vest at July 2, 2011		46,000	$	5.62	1.3 years		$	79,500

The aggregate intrinsic value included in the table above represents the difference between the exercise price of the options and the market price of the Company's common stock for the options that had exercise prices that were lower than the $6.72 and $5.19 closing market price of the Company's common stock at July 2, 2011 and September 30, 2010, respectively.

A summary of unvested restricted stock activity for the nine months ended July 2, 2011 is as follows:

	Number of shares of Restricted Stock			Weighted Average Grant – Date Fair Value
Unvested at September 30, 2010		60,000		$	3.20
Granted		20,000		$	8.75
Vested		(30,000	)	$	3.56
Unvested at July 2, 2011		50,000		$	5.21

In January 2011, the Company granted 20,000 shares of restricted stock to eight non-employee directors, which will vest on the day before the 2012 annual meeting providing that the grantee remains a director of the Company, or as otherwise determined by the Compensation Committee. The aggregate fair value of the stock measured on the date of grant was $175,000, based on the closing sale price of the stock on the date of grant. Compensation expense is being charged to income on a straight line basis over the twelve month period during which the forfeiture conditions lapse. The charge to income for these restricted stock grants in the first nine months of fiscal 2011 was $73,000 and the subsequent charge will be approximately $44,000 on a quarterly basis.

Stock based compensation expense for the three and nine month periods ended July 2, 2011 was $53,000 and $132,000, respectively and for the three and nine month periods ended July 3, 2010 was $24,000 and $87,000 respectively.  At July 2, 2011 there was $180,000 of unrecognized compensation expense related to share options and restricted stock granted under the plan.  The Company expects to recognize that cost over a weighted average period of 1.2 years.