Stock Based Compensation

6 Months Ended

Jun. 30, 2013

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

STOCK-BASED COMPENSATION

NOTE 6 – STOCK BASED COMPENSATION

The Corporation’s shareholders approved the 2004 Long-Term Stock Incentive Plan (the “Plan”) in May 2004. This Plan provides for grants of equity-based awards to certain employees.  The Plan is limited to 300,000 common shares. The shares granted to employees vest 20% per year over a five year period. The options expire after ten years. At June 30, 2013, options to purchase 115,987 shares were vested and exercisable, and  45,596 shares remained available for grant under the Plan.

The Corporation recognizes compensation cost for vested equity-based awards based on their June 30, 2013 fair value. The Corporation recorded $30 and $79 in compensation cost for equity-based awards that vested during the three months ended June 30, 2013 and 2012, respectively.

In determining the fair value of the stock options at June 30, 2013, the Corporation utilized a Black-Scholes valuation model with a risk-free interest rate that corresponds to the expected remaining life of each award, an expected dividend yield of 0%, an expected common stock price volatility of 30%, and an expected life of 8 years from the grant date.

A summary of the status of the Plan as of and for the six months ended June 30, 2013, and changes during the period then ended are presented below:

 

	Shares	Weighted   Average  Exercise   Price		Weighted   Average  Remaining   Contractual  Life		Aggregate Intrinsic Value
Outstanding at beginning of year	261,098	$	10.38		6.9 years
Granted	13,889		5.40		9.6 years
Exercised	(2,250)		3.50		—
Forfeited	(20,651)		13.98		—
Outstanding at end of period	252,086	$	9.87		6.9 years	$	188
Options exercisable at period end	118,333	$	16.39		4.9 years	$	52
Weighted-average fair value of options granted during the six months ended ended June 30, 2013		$	1.73
Weighted-average fair value of options granted during the year ended December 31, 2012		$	1.97

At June 30, 2013, unrecognized compensation expense to be recognized over the remaining life of outstanding options is $262,000.

The following information applies to options outstanding at June 30, 2013:

Number Outstanding	Range Of Exercise Prices
72,275	$3.50 - $4.00
72,069	$4.01 - $4.95
36,091	$4.96 - $12.95
40,049	$12.96 - $23.20
31,602	$23.21 – $30.70