Note 14 - Stock Option Plans

12 Months Ended

Dec. 31, 2011

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

14.   STOCK OPTION PLANS

We instituted the 2003 Incentive Stock Plan (the “2003 Plan”) in March 2003. The 2003 Plan authorizes the issuance of up to 450,000 options to purchase shares of common stock to officers and key employees, with vesting of such options occurring equally over a 3-year time period.  During the year ended December 31, 2011, 152,500 options were granted under the 2003 Plan; no options were granted under the 2003 Plan in the year ended December 31, 2010.  We instituted the 1991 Incentive Stock Plan (the “1991 Plan”) in December 1991 and the 1991 Plan expired in December 2001, with 148,000 shares ungranted. In August 2000, we instituted a Non-Employee Directors’ Stock Option Plan (the “Directors’ Plan”) that authorized the issuance of up to 200,000 shares of common stock to non-employee directors. Upon adoption of the Directors’ Plan, each non-employee director was granted an option to acquire 5,000 shares. At each Annual Meeting, each director received a grant of 4,000 options, which vest in 50% increments on the first and second anniversary. The Directors Plan expired in 2011, with 48,000 options ungranted. The shareholders approved a new plan, the 2011 Non-Employee Directors Stock Plan (the “2011 Directors Plan”), in May 2011, with essentially the same terms and conditions as the Director’s Plan. Stock options under all plans are granted at an exercise price equal to fair market value on the date of grant. As of December 31, 2011, a total of 1,181,500 options under all four plans have been granted, 724,320 have been exercised, 114,680 have been cancelled, 172,000 are fully vested and exercisable and 170,500 are not vested. All options expire ten years from their respective dates of grant.

As of December 31, 2011, there was $170,000 unrecognized compensation cost related to stock options granted under the plans, which is expected to be a recognized over a weighted-average period of 2.5 years.

Stock option activity during the years ended December 31, 2011 and 2010 was as follows:

	2011			2010
Options outstanding at January 1		194,000			233,000
Options cancelled		(16,000	)		(51,000	)
Options granted		164,500			12,000
Options outstanding at December 31		342,500			194,000
Options available for grant at December 31		405,500			410,000
Options exercisable at December 31		172,000			176,000
Exercise price ranges per share:
Granted	$	1.52 - $1.72		$	1.19
Outstanding	$	0.69 - $3.84		$	0.69 - $4.26
Weighted average exercise price per share:
Granted	$	1.63		$	1.19
Outstanding at December 31	$	1.78		$	2.12
Exercisable at December 31	$	1.95		$	2.23

The following tables summarize information about the stock options outstanding under the company’s option plans as of December 31, 2011.

Options Outstanding:
Range of Exercise Price	Number Outstanding		Wgt. Avg. Contractual Life Remaining	Wgt. Avg. Exercise Price		Aggregate Intrinsic Value
$0.69 - $2.08		304,500	6.3 yrs	$	1.58	$	13,000
$2.96 - $4.26		38,000	3.9 yrs	$	3.42		--
$0.69 - $4.26		342,500	6.1 yrs	$	1.78	$	13,000
Options Exercisable:
Range of Exercise Price	Number Exercisable		Wgt. Avg. Contractual Life Remaining	Wgt. Avg. Exercise Price
$0.69 - $2.08		134,000	2.4 yrs	$	1.53
$2.96 - $4.26		38,000	3.9 yrs	$	3.42
$1.51 - $4.26		172,000	2.8 yrs	$	1.95

Aggregate intrinsic value represents the total pre-tax intrinsic value (the difference between the company’s closing stock price on the last trading day of the year ended December 31, 2011 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on December 31, 2011.  The amount of aggregate intrinsic value will change based on the fair market value of the company’s common stock.