Note 13 - Stock-Based Compensation

3 Months Ended

Mar. 31, 2015

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

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

13. Stock-Based Compensation. The Company had two stock-based compensation plans at March 31, 2015. The shares outstanding are for grants under the Company’s 1997 Stock Option Plan (the “1997 Plan”) and the 2008 Equity Incentive Plan (the “2008 Plan”). The 1997 Plan matured on April 8, 2008 and no additional options may be granted under the 1997 Plan. At March 31, 2015, the 1997 Plan had 30,750 granted unexercised stock option shares. At March 31, 2015, the 2008 Plan includes 144,500 granted unexercised stock option shares, 10,425 granted nonvested restricted stock award shares and 799,600 shares available to be granted.

Stock Option Grants. Options granted under the 2008 Plan are granted at the closing price of the Company’s common stock on the NASDAQ Stock Market on the date of grant. Stock options expire ten years from the date of grant and vest over service periods ranging from one year to five years. The Company settles stock option exercises with authorized unissued shares. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option pricing model. The risk-free interest rate is based on the U.S. Treasury rate for the expected life at the time of grant. Volatility is based on the average volatility of the Company based upon previous trading history. The expected life and forfeiture assumptions are based on historical data. Dividend yield is based on the yield at the time of the option grant.

A summary of option activity under the Plans as of March 31, 2015 and 2014, and changes during the three month periods ended March 31, 2015 and 2014 is presented below:

Quarter Ended March 31, 2015:	Options Outstanding			Price		Aggregate Intrinsic Value
Outstanding at December 31, 2014		169,500		$	11.38
Granted		14,000			8.01
Forfeited		(750	)		6.52
Expired		(7,500	)		17.47
Exercised		-			-
Outstanding at March 31, 2015		175,250			10.87	$	195,900
Vested and Exercisable at March 31, 2015		110,150		$	13.37	$	103,072
Quarter Ended March 31, 2014:
Outstanding at December 31, 2013		160,375		$	11.84
Granted		18,000			8.36
Forfeited		(2,250	)		6.52
Expired		(1,875	)		19.88
Exercised		-			-
Outstanding at March 31, 2014		174,250			11.46	$	257,090
Vested and Exercisable at March 31, 2014		106,750		$	14.83	$	84,190

The following weighted-average assumptions were used for grants awarded in the three months ended March 31, 2015 and 2014:

	Three Months Ended 3/31/15			Three Months Ended 3/31/14
Dividend growth rate		1.0	%		1.0	%
Expected volatility		96.9	%		52.7	%
Average risk-free interest rate		1.5	%		1.9	%
Expected lives - years		7			6

The following table summarizes additional information about the Company’s outstanding options and exercisable options as of March 31, 2015, including weighted-average remaining contractual term expressed in years ("Life") and weighted average exercise price (“Price”):

			Outstanding						Exercisable
Range of Exercise Price			Shares		Life		Price		Shares		Price
$4.00	–	10.00		106,500		7.62	$	6.22		41,400	$	5.54
$10.01	–	17.00		27,000		4.45		11.01		27,000		11.01
$17.01	–	26.00		32,250		2.79		21.03		32,250		21.03
$26.01	–	34.00		9,500		1.44		28.14		9,500		28.14
				175,250		5.91	$	10.87		110,150	$	13.37

A summary of nonvested option shares as of March 31, 2015 and 2014, and vesting changes during the three months ended March 31, 2015 and 2014, is presented below:

Period Ended March 31, 2015:	Shares			Price
Nonvested at December 31, 2014		62,700		$	6.14
Granted		14,000			8.01
Forfeited		(600	)		6.52
Vested		(11,000	)		5.47
Nonvested at March 31, 2015		65,100		$	6.65
Period Ended March 31, 2014:
Nonvested at December 31, 2013		58,750		$	5.38
Granted		18,000			8.36
Forfeited		(2,250	)		6.52
Vested		(7,000	)		5.40
Nonvested at March 31, 2014		67,500		$	6.14

There were no income tax benefits realized from the exercise of stock options for the three months ended March 31, 2015 or 2014, and there was no intrinsic value for options exercised during the three months ended March 31, 2015 or 2014, as no options were exercised during the respective periods.

Net compensation expense recognized for stock options was $10,623 and $8,254 for the three months ended March 31, 2015 and 2014, respectively. As of March 31, 2015, total unrecognized compensation cost on granted unexercised shares was $183,049, and is expected to be recognized during the next 4.75 years.

Restricted Stock Awards. The Company measures the fair value of restricted shares based on the price of its common stock on the grant date and compensation expense is recorded over the vesting period. During the three months ended March 31, 2015 and 2014, none and 13,900 restricted stock awards, respectively, were granted with a four year vesting period. Total compensation expense recognized for restricted stock awards for the three months ended March 31, 2015 and 2014 was $7,263 and $4,842, respectively. As of March 31, 2015, there was $82,311 of total unrecognized compensation cost related to nonvested restricted stock granted under the 2008 Plan, which will be recognized over a remaining period of 2.75 years. A summary of nonvested restricted stock awards as of March 31, 2015 and 2014, and vesting changes during the respective three month periods is presented below:

Period Ended March 31, 2015:	Shares			Price
Nonvested at December 31, 2014		13,900		$	8.36
Granted		-			-
Vested		(3,475	)		8.36
Forfeited		-			-
Nonvested at March 31, 2015		10,425		$	8.36
Period Ended March 31, 2014:
Nonvested at December 31, 2013		-		$	-
Granted		13,900			8.36
Vested		-			-
Forfeited		-			-
Nonvested at March 31, 2014		13,900		$	8.36

The following table reflects the combined impact of fair value compensation cost recognition for stock options and restricted stock awards on income before income taxes, net income, basic earnings per share and diluted earnings per share for the three month periods ended March 31, 2015 and 2014:

	Three Months Ended 3/31/15		Three Months Ended 3/31/14
Decrease net income before income taxes	$	17,886	$	13,096
Decrease net income	$	17,886	$	13,096
Decrease basic earnings per share	$	0.00	$	0.01
Decrease diluted earnings per share	$	0.00	$	0.01