2. STOCK-BASED COMPENSATION

9 Months Ended

Sep. 30, 2011

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

2. STOCK-BASED COMPENSATION

Equity Plans

On March 17, 2010, the Board of Directors adopted the 2010 Equity Incentive Plan (the “2010 Plan”). The 2010 Plan was approved by the Company’s shareholders on May 20, 2010. In 2000, the Board of Directors adopted and the Company’s shareholders approved a stock option plan (the “2000 Plan”), under which 359,569 options remain outstanding at September 30, 2011. The total number of authorized shares that remain available for issuance under the 2010 Plan is 1,431,453. The 2010 Plan provides for the following types of stock-based awards: incentive stock options; nonqualified stock options; stock appreciation rights; restricted stock; restricted performance stock; unrestricted Company stock; and performance units. Awards granted under the 2000 Plan were either incentive stock options or nonqualified stock options. Under the 2010 Plan, the awards may be granted to employees and directors under incentive and nonstatutory agreements and other awards agreements. The 2010 Plan and the 2000 Plan (collectively the “Plans”) require that the option price may not be less than the fair market value of the stock at the date the option is granted. The option awards under the Plans expire on dates determined by the Board of Directors, but not later than ten years from the date of award. The vesting period is generally five years; however, the vesting period can be modified at the discretion of the Company’s Board of Directors. Outstanding option awards under the Plans are exercisable until their expiration, however, no new options will be awarded under the 2000 Plan. New shares are issued upon exercise of an option.

During the third quarter of 2011, the Company awarded 18,902 shares of restricted common stock under the Company’s 2010 Equity Incentive Plan to certain employees and to directors. During the third quarter of 2010, the Company awarded 29,334 shares of restricted common stock under the Company’s 2010 Equity Incentive Plan to certain employees and to directors. Grant date fair value is determined by the market price of the Company’s common stock on the date of grant. The aggregate value of these shares at the grant date amounted to approximately $99,000 for the awards in 2011 and $205,000 for the awards in 2010 and is recognized ratably as compensation expense or director expense over the vesting periods. The shares of common stock granted pursuant to such agreements vest in increments over one to five years from the date of grant. The shares awarded to employees and directors under the restricted stock agreements vest on the applicable vesting dates only to the extent the recipient of the shares is then an employee or a director of the Company or one of its subsidiaries, and each recipient will forfeit all of the shares that have not vested on the date his or her employment or service is terminated. New shares are issued upon vesting of the restricted common stock.

Equity Compensation

For the three-month periods ended September 30, 2011 and 2010, the compensation cost recognized for equity compensation was $48,000 and $67,000, respectively. The recognized tax benefit for equity compensation expense was $15,000 and $17,000, for the three-month periods ended September 30, 2011 and 2010, respectively. For the nine-month periods ended September 30, 2011 and 2010, the compensation cost recognized for equity compensation was $156,000 and $177,000, respectively. The recognized tax benefit for equity compensation expense was $44,000 and $34,000, for the nine-month periods ended September 30, 2011 and 2010, respectively.

At September 30, 2011, the total compensation cost related to nonvested stock option awards not yet recorded is $86,000. This amount will be recognized over the next 3.5 years and the weighted average period of recognizing these costs is expected to be 1.06 years. At September 30, 2011, the total compensation cost related to restricted stock awards not yet recorded is $174,000. This amount will be recognized over the next 5.0 years and the weighted average period of recognizing these costs is expected to be 1.82 years.

Equity Plans Activity

Stock Options

There were no stock options awarded during the three and nine-month periods ended September 30, 2011 and 2010. A summary of option activity under the Plans as of September 30, 2011 and changes during the period then ended is presented below:

Options	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value ($000)
Outstanding at January 1, 2011		379,571		$	17.18	5.5 years		$	—
Granted		—			—		—		—
Exercised		—			—		—		—
Cancelled		(20,002	)	$	16.47		—		—
Outstanding at September 30, 2011		359,569		$	17.22	4.7 years		$	—
Exercisable at September 30, 2011		293,104		$	18.09	4.2 years		$	—

Restricted Stock

There were 18,902 shares of restricted stock awarded during the three and nine-month periods ended September 30, 2011. Of the 18,902 restricted common shares, 13,335 will vest one year from the date of the award and 5,567 will vest over five years at 20% per year from the date of the award. There were 29,334 shares of restricted stock awarded during the three and nine-month periods ended September 30, 2010. Grant date fair value is determined by the market price of the Company’s common stock on the date of grant ($5.25 on August 17, 2011 and $6.99 on July 21, 2010). Of the 29,334 restricted common shares awarded in 2010, 13,298 vested on July 21, 2011, 2,860 were forfeited and 13,176 will vest 20% per year. The intrinsic value of unvested restricted stock at September 30, 2011 was $160,000.

Restricted Stock	Shares			Weighted Average Grant Date Fair Value
Nonvested at January 1, 2011		29,334		$	6.99
Awarded		18,902			5.25
Vested		(13,298	)		6.99
Cancelled		(2,860	)		6.99
Nonvested at September 30, 2011		32,078		$	5.96

Other Equity Awards

There were no stock appreciation rights, restricted performance stock, unrestricted Company stock, or performance units awarded during the three or nine month periods ended September 30, 2011 or 2010. The intrinsic value used for stock options and restricted stock was derived from the market price of the Company’s common stock of $4.97 as of September 30, 2011.