CUISINE SOLUTIONS (FZN)

NOTE 8 - STOCKHOLDERS’ EQUITY

Effective June 26, 2005, the Company adopted the fair value recognition provisions of SFAS No. 123(R), Share-Based Payment (“SFAS 123(R)”), using the modified prospective-transition method. Under that transition method, compensation cost recognized in the fiscal year 2006 includes: (a) compensation cost for all share-based payments granted prior to, but not yet vested as of June 25, 2005, based on the grant date fair value estimated in accordance with the original provision of SFAS 123 and (b) compensation cost for all share-based payments granted subsequent to June 25, 2005, based on the grant-date fair value estimated in accordance with the provisions of SFAS 123(R). As a result, a non-cash charge of $59,000 and $187,000 were charged to compensation expense during the forty week

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period ended April 5, 2008 and March 31, 2007, respectively. The Company allocated share-based compensation expense under SFAS 123(R) in the unaudited condensed consolidated statements of income as follows:

During the forty week periods ended April 5, 2008 and March 31, 2007, the Company granted zero and 72,401 stock options, respectively.  Options exercised during the first three quarters of fiscal year 2008 and 2007 were 507,400 and 98,350, with an intrinsic value of $3,794,000 and $592,000, respectively.

As of April 5, 2008, the total unrecognized estimated compensation cost related to non-vested stock options granted prior to that date was $112,000, which is expected to be recognized over a weighted average period of 2 years.

NOTE 8 - STOCKHOLDERS’ EQUITY

Effective June 26, 2005, the Company adopted the fair value recognition provisions of SFAS No. 123(R), Share-Based Payment (“SFAS 123(R)”), using the modified prospective-transition method. Under that transition method, compensation cost recognized in the fiscal year 2006 includes: (a) compensation cost for all share-based payments granted prior to, but not yet vested as of June 25, 2005, based on the grant date fair value estimated in accordance with the original provision of SFAS 123, and (b) compensation cost for all share-based payments granted subsequent to June 25, 2005, based on the grant-date fair value estimated in accordance with the provisions of SFAS 123(R). As a result, a non-cash charge of $45,000 and $141,000 were charged to compensation expense during the twenty-four week period ended December 15, 2007 and December 9, 2006, respectively. The Company allocated share-based compensation expense under SFAS 123(R) in the unaudited condensed consolidated statements of income as follows:

During the twenty-four week periods ended December 15, 2007 and December 9, 2006, the Company granted zero and 12,401 stock options, respectively.  Options exercised during the first two quarters of fiscal year 2008 were 69,900, with an intrinsic value of $409,000 and no options were exercised during the first two quarters of fiscal year 2007.

As of December 15, 2007, the total unrecognized estimated compensation cost related to non-vested stock options granted prior to that date was $126,000, which is expected to be recognized over a weighted average period of 1.25 years.

NOTE 8 – STOCKHOLDERS’ EQUITY

Effective June 26, 2005, the Company adopted the fair value recognition provisions of SFAS No. 123(R), Share-Based Payment (“SFAS 123(R)”), using the modified prospective-transition method. Under that transition method, compensation cost recognized in the fiscal year 2006 includes: (a) compensation cost for all share-based payments granted prior to, but not yet vested as of June 25, 2005, based on the grant date fair value estimated in accordance with the original provision of SFAS 123, and (b) compensation cost for all share-based payments granted subsequent to June 25, 2005, based on the grant-date fair value estimated in accordance with the provisions of SFAS 123(R). As a result, a non-cash charge of $31,000 and $71,000 were charged to compensation expense during the twelve week period ended September 22, 2007 and September 16, 2006, respectively. The Company allocated share-based compensation expense under SFAS 123(R) in the unaudited condensed consolidated statements of income as follows:

The Company did not grant any stock options during the twelve week periods ended September 22, 2007 and September 16, 2006. Options exercised during the first quarter of fiscal year 2008 were 69,900 with an intrinsic value of $409,000 and no options were exercised during the first quarter of fiscal year 2007.

As of September 22, 2007 the total unrecognized estimated compensation cost related to non-vested stock options granted prior to that date was $141,000, which is expected to be recognized over a weighted average period of 1.38 years.