Stock-based Compensation

3 Months Ended

Mar. 31, 2013

Stock-based Compensation

Stock-based Compensation.

5. Stock-based Compensation

The Company has a stock incentive plan for the issuance of up to 442,750 shares of common stock.  The plan provides for granting eligible participants stock options or other stock awards, as described by the plan, at option prices ranging from 85% to 110% of fair market value at date of grant.  Options granted expire up to seven years after the date of grant.  Such options generally become exercisable over a one to three year period.  A total of 119,323 shares of common stock are reserved and available for additional grants of options under the plan at March 31, 2013.

The Company charged compensation cost of approximately $2,600 and $4,400 against income for the three months ended March 31, 2013 and 2012, respectively.  As of March 31, 2013, there was approximately $13,000 of unrecognized compensation cost related to unvested share-based compensation awards granted.  That cost is expected to be recognized over the next three years.

The Company receives a tax deduction for certain stock option exercises during the period in which the options are exercised, generally for the excess of the market price at the time the stock options are exercised over the exercise price of the options, which increases the APIC pool, which is the amount that represents the pool of excess tax benefits available to absorb tax shortages.  There were no excess tax benefits recognized during the three month periods ended March 31, 2013 and 2012.  The Company’s APIC pool totaled approximately $111,000 at each of March 31, 2013 and December 31, 2012.

Proceeds from the exercise of stock options were approximately $41,000 for the three months ended March 31, 2013 and $4,000 for the three months ended March 31, 2012.

Stock option activity during the three months ended March 31, 2013 was as follows:

			Weighted
			Average
			Exercise
	Shares		Price
Outstanding at beginning of period	21,362		$	6.72
Exercised	(7,110	)	5.77
Outstanding at March 31, 2013	14,252		7.19
Exercisable at March 31, 2013	6,581		6.70

The aggregate intrinsic value of all options outstanding and for those exercisable at March 31, 2013 was approximately $34,000 and $18,900, respectively.