Long-Term Incentive Plan

6 Months Ended

Jun. 30, 2012

Long-Term Incentive Plan

Long-Term Incentive Plan

Note 9 – Long-Term Incentive Plan

The Long-Term Incentive Plan (the “Incentive Plan”) authorizes the issuance of up to 1,908,332 shares of the Company’s common stock, including the granting of qualified stock options, non-qualified stock options, restricted stock, restricted stock units, and stock appreciation rights.  Total shares issuable under the plan were 10,925 at June 30, 2012.  Stock based awards may be granted to selected directors and officers or employees at the discretion of the board of directors.  There were no stock options granted in the first half of 2012 or 2011.  All stock options are granted for a term of ten years.

Generally, restricted stock and restricted stock units vest three years from the grant date, but the Company’s Board of Directors has discretionary authority to change some terms including the amount of time until vest date.  Awards under the Incentive Plan become fully vested upon a merger or change in control of the Company.

Total compensation cost that has been charged against income for those plans was $66,000 in the second quarter of 2012 and $153,000 in the first half of 2012.

There were no stock options exercised during the second quarter of 2012 or 2011.  The Company did not grant any options of the Company’s common stock during either of those periods.  There was no unrecognized compensation cost related to nonvested stock options granted under the Incentive Plan as of June 30, 2012.  Total unrecognized compensation cost related to nonvested stock options granted under the Incentive Plan was $4,000 as of June 30, 2011 and was recognized over a weighted-average period of 0.58 years.

A summary of stock option activity in the Incentive Plan is as follows:

	Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)	Aggregate Intrinsic Value
Beginning outstanding at January 1, 2012	500,000	$	27.34
Canceled	(7,500)	25.67
Ending outstanding at June 30, 2012	492,500	$	27.36	3.05	$	-
Exercisable at end of period	492,500	$	27.36	3.05	$	-
Beginning outstanding at January 1, 2011	614,832	$	25.81
Canceled	(21,500)	27.73
Ending outstanding at June 30, 2011	593,332	$	25.74	3.58	$	-
Exercisable at end of period	589,332	$	25.87	3.56	$	-

Under the Incentive Plan, restricted stock was granted beginning in 2005 and the grant of restricted units began in February 2009.  Both of these restricted awards have voting and dividend rights and are subject to forfeiture until certain restrictions have lapsed including employment for a specific period.  There were no restricted awards issued during the second quarter of 2012 or the second quarter of 2011.  Compensation expense is recognized over the vesting period of the restricted award based on the market value of the award at issue date.

A summary of changes in the Company’s nonvested shares of restricted share rights is as follows:

	June 30, 2012			June 30, 2011
		Weighted			Weighted
		Average			Average
		Grant Date			Grant Date
	Shares	Fair Value		Shares	Fair Value
Nonvested at January 1	426,192	$	4.15	464,298	$	6.76
Granted	60,000	1.25		141,320	1.06
Vested	(144,976)	7.14		(98,770)	10.71
Forfeited	(13,296)	3.28		(61,129)	4.65
Nonvested at June 30	327,920	$	2.33	445,719	$	4.37

Total unrecognized compensation cost of restricted awards was $227,000 as of June 30, 2012, which is expected to be recognized over a weighted-average period of 1.08 years.  Total unrecognized compensation cost of restricted awards was $978,000 as of June 30, 2011, which was expected to be recognized over a weighted-average period of 1.13 years.