Note 2 - Stock Based Compensation Plans

3 Months Ended

Mar. 31, 2013

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

Note 2 – Stock Based Compensation Plans

The Company has three stock compensation plans—the 1998 Stock Option Plan, the 2008 Stock Incentive Plan and the 2011 Equity Incentive Plan (the “2011 Plan”)—which are more fully described in Note J to the consolidated financial statements in the Company’s Annual Report on Form 10-K.

The 2011 Plan provides for the issuance of both “incentive” and “nonqualified” stock options, restricted stock awards, stock appreciation rights and stock awards.  Awards under the 2011 Plan may be made to salaried officers and employees of the Company and its affiliates, to non-employee directors of the Company and its affiliates, and to consultants providing services to the Company and its affiliates.  Awards under the 2011 Plan may be granted on such terms and conditions as are established by the Board of Directors or an authorized Committee of the Board of Directors in its discretion.  Awards may be granted as performance-based compensation under section 162(m) of the Internal Revenue Code.

The Company determines the fair value of options granted on the date of grant using a Black-Scholes-Merton option pricing model, which uses assumptions based on expected option life, expected stock volatility and the risk-free interest rate. The expected volatility assumptions used by the Company are based on the historical volatility of the Company’s common stock over the most recent period commensurate with the estimated expected life of the Company’s stock options. The Company bases its expected life assumption on its historical experience and on the terms and conditions of the stock options it grants to employees. The risk-free rate is based on the U.S. Treasury yield curve for the periods within the contractual life of the options in effect at the time of the grant. The Company also makes assumptions regarding estimated forfeitures that will impact the total compensation expenses recognized.

No options were granted in either of the three-month periods ended March 31, 2013 and 2012.

During the three-month periods ended March 31, 2013 and 2012, the Company recognized pre-tax stock-based compensation expense of $44,000 and $36,000, respectively.  As of March 31, 2013, the Company has unvested options outstanding with unrecognized compensation expense totaling $259,000, which is scheduled to be recognized as follows (in thousands):

April 1 through December 31, 2013	$	74
2014		62
2015		62
2016		51
2017		10
Total unrecognized compensation cost	$	259

No options outstanding were “in the money” as of March 31, 2013.

The following table summarizes information about stock option activity for the three months ended March 31, 2013:

	Shares			Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (years)		Aggregate Intrinsic Value of In-the-Money Options
Outstanding at beginning of period		456,900		$	6.12
Options granted		-
Options exercised		-
Options expired unexercised		-
Options forfeited		(4,000	)		5.00
Outstanding at end of period		452,900		$	6.13		8.4	$	-
Options exercisable at end of period		219,900		$	7.33		7.5	$	-
Options Vested or Expected to Vest		452,900		$	6.13		8.4	$	-