STOCK-BASED COMPENSATION

12 Months Ended

Dec. 31, 2013

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

STOCK-BASED COMPENSATION

10. STOCK-BASED COMPENSATION

The Company’s 2011 Stock Option Plan (the Plan) provides for the grant of options to purchase up to 120,000 shares of the Company’s common stock to the officers and directors of the Company.

The Company’s policy is to record stock compensation expense in accordance with ASC Topic 505-50, “Equity-Based Payments to Non-Employees”. Stock based compensation expense is recognized using the fair-value method for all awards. The Company granted 17,700 reload options related to options previously granted which were exercised during the year ended December 31, 2013. A reload stock option is granted for the number of shares tendered as payment for the exercise price and tax withholding obligation (if any) upon the exercise of a stock option with a reload provision. The exercise price of the reload option is equal to the market price of the stock on the date of grant and the reload option will expire on the same date as the original option which was exercised. The Company determined the fair value of its option awards using the Black-Scholes option pricing model. The following assumptions were used to value the reload options granted during the year ended December 31, 2013: 3 year expected life; expected volatility of approximately 37%; risk-free of .11% and annual dividend yield of 17%. The expected life for options granted during the period represents the period of time that options are to be outstanding based on the expiration date of the Plan. Expected volatilities are based upon historical volatility of the Company’s stock over a period equal to the 3 year expected life.

The weighted average fair value for the 17,700 reload options granted during the year ended December 31, 2013 was $18.35 per share.

The Company’s non-employee stock compensation expense based on the fair value at the date of grant for stock options was approximately $20,000 and $12,000 for the years ended December 31, 2013 and 2012, respectively, and is included in the results of operations in the condensed consolidated financial statements.

As of December 31, 2013, there is no unrecognized non-employee stock compensation expense related to unvested stock options under the Plan. As of December 31, 2012, there was approximately $5,000 of total unrecognized non-employee stock compensation expense related to unvested stock options under the Plan. This expense was recognized over the vesting periods ending August 25, 2013.

A summary of the status of the Company’s stock option plan as of December 31, 2013 and 2012, and changes during the periods ending on those dates are presented below:

	As of December 31, 2013					As of December 31, 2012
	Shares			Weighted  Average Exercise Price		Shares		Weighted  Average Exercise Price
Outstanding at the beginning of the period		102,100		$	4.99		102,100	$	4.99
Granted		17,700		$	18.35		—		—
Exercised		(97,100	)	$	5.00		—		—
Expired		—			—		—		—
Forfeited		—			—		—		—
Outstanding at the end of the period		22,700		$	15.37		102,100	$	4.99
Options exercisable at period-end		22,700		$	15.37		102,100	$	4.99
Weighted average fair value of options granted during the period		17,700		$	18.35		102,100		—
Aggregate intrinsic value of outstanding and exercisable options at the end of the period		22,700		$	2.63				—

The intrinsic value of options exercised during the year ended December 31, 2013 was approximately $1.3 million.

The following table summarizes outstanding and exercisable options as of December 31, 2013:

Number Outstanding		Weighted Average
and exercisable		Strike Prices
	5,000	$	4.80
	9,500	$	17.84
	7,500	$	18.89
	700	$	19.50
	22,700	$	15.37

As of December 31, 2013, the intrinsic value of options outstanding and exercisable was approximately $60,000.

There were no options granted, exercised or forfeited during the year ended December 31, 2012.