NOTE 13 - STOCK-BASED COMPENSATION

12 Months Ended

Dec. 31, 2012

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

13. STOCK-BASED COMPENSATION

During 2012 and 2011 each director was awarded 180 shares of common stock for their share retainer grant. Total common stock grants were 1,440 and 1,260 during 2012 and 2011. During 2010, the Board of Directors elected to forego their 180 share retainer grant. Compensation cost related to these awards was recognized based on the fair value of the shares at the date of the award which equaled $13.10 and $10.40 per share or a total expense of $19,000 and $13,000 for the years ended December 31, 2012 and 2011.

Under the Company’s stock option plans as of December 31, 2012, there were 220,213 shares of the Company’s common stock available for future grants to directors and employees of the Company. Under the Director Plan, options may not be granted at a price less than 85% of fair value at the date of the grant. Under the Employee Plan, options may not be granted at a price less than the fair value at the date of the grant. Under both plans, options may be exercised over a ten year term. The vesting period is generally four years; however the vesting period can be modified at the discretion of the Company’s Board of Directors, and for all options granted in the fourth quarter in 2008 the vesting period is five years. A summary of outstanding stock options follows:

						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
				Exercise		Contractual		Intrinsic
	Options			Price		Term		Value ($000)
Outstanding January 1, 2010		153,775		$	50.81
Granted		—			—
Exercised		—			—
Expired or canceled		(1,680	)		31.59
Outstanding December 31, 2010		152,095			51.02
Granted		66,000			10.38
Exercised		—			—
Expired or canceled		(34,025	)		39.66
Outstanding December 31, 2011		184,070			38.55
Granted		77,908			11.13
Exercised		—			—
Expired or canceled		(13,156	)		49.10
Outstanding December 31, 2012		248,822		$	29.40		7 years	$	492
Fully vested and exercisable at December 31, 2012		109,235		$	52.03		5 years	$	50
Options expected to vest at December 31, 2012		139,587		$	11.70		9 years	$	442

Information about stock options outstanding at December 31, 2012 is summarized as follows:

						Average				Average
				Average		Exercise				Exercise
Range of				Remaining		Price of				Price of
Exercise		Options		Contractual		Options		Options		Options
Prices		Outstanding		Life (Years)		Outstanding		Exercisable		Exercisable
$	0-12.38		140,408		8.89	$	10.77		13,000	$	10.40
$	12.39-24.75		48,530		6.04	$	23.03		36,351	$	23.68
$	61.88-74.25		30,183		3.76	$	65.10		30,183	$	65.10
$	74.26-86.63		10,012		2.15	$	81.00		10,012	$	81.00
$	86.64-99.00		5,514		3.02	$	89.60		5,514	$	89.60
$	99.01-111.38		14,175		3.39	$	99.98		14,175	$	99.98

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted price of the Company’s common stock for options that were in-the-money at December 31, 2012. There were no options exercised during the years ended December 31, 2012, 2011 and 2010. The total fair value of the options that vested during the years ended December 31, 2012, 2011 and 2010 totaled $191,000, $144,000 and $181,000, respectively.

The compensation cost that has been charged against income for stock based compensation was $210,000, $157,000 and, $180,000 for the years ended December 31, 2012, 2011 and 2010, respectively.

At December 31, 2012, the total unrecognized compensation cost related to stock-based awards granted to employees under the Company’s stock option plans was $719,000. This cost will be amortized on a straight-line basis over a weighted average period of approximately 3.8 years and will be adjusted for subsequent changes in estimated forfeitures.