Stock Option Plans

12 Months Ended

Dec. 31, 2011

Notes to Financial Statements

Stock Option Plans

12. Stock Option Plans

ABI maintains a stock award and incentive plan which permits the issuance of options, stock appreciation rights (“SARs”), limited SARs, restricted stock, restricted stock units and other stock-based awards of ABI to selected employees and independent contractors of the Company. Under the terms of the stock award and incentive plan, options granted may be either nonqualified or incentive stock options and the exercise price may not be less than the fair market value of a share on the date of grant (as determined under the plan), as determined by the Committee. SARs and limited SARs granted in tandem with an option shall be exercisable only to the extent the underlying option is exercisable and the exercise price shall be equal to the exercise price of the underlying option. In addition, the Committee may grant restricted stock to participants of the plan. No SARs or restricted stock have been granted under the plan since its adoption. Other than the restrictions that limit the sale and transfer of restricted stock granted under the plan, recipients of restricted stock granted under the plan generally are entitled to all the rights of a stockholder.

The Company also maintains a stock award plan for non-employee directors, which permits the issuance of options to purchase up to 100,000 shares of ABI common stock by non-employee directors. Under the terms of the plan, options granted are nonqualified and are issued at a price equal to 100% of fair market value at the date of grant (as determined under the plan). On July 1^st of each year, ABI grants options to each of its non-employee directors. Options granted under the plan are exercisable six months after the date of grant.

On July 1, 2011, July 1, 2010 and August 10, 2010, 3,000, 3,000 and 1,000 options were granted to the Company’s non-employee directors, respectively. The weighted-average grant date fair value of the options was $5.13, $1.95 and $1.69, respectively. The fair value of the options was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions for 2011 and 2010: risk-free interest rate of 3.62%, expected dividend yield of zero percent for each of the two years, volatility factor of the expected market price of the Company’s common stock of 44.3%, and a weighted-average expected life of the options of seven and one-half years. The options granted vested or will vest six months from the grant dates. During 2011 and 2010, ABI recognized expense of $8 thousand and $6 thousand, respectively, for these options.

The total fair value of ABI options that vested during 2011 and 2010 was $176 thousand and $172 thousand, respectively.

The following tables summarize information about ABI’s stock options:

	2011					2010
	Shares			Weighted- Average Exercise Price		Shares			Weighted- Average Exercise Price
Outstanding at beginning of year		488,500		$	7.88		536,500		$	8.14
Granted		3,000			9.68		4,000			3.64
Exercised		(30,300	)		6.50		-			-
Expired		(3,000	)		14.00		(19,000	)		13.85
Forfeited		(5,000	)		7.76		(33,000	)		8.12
Outstanding at end of year		453,200			7.94		488,500			7.88
Options exercisable at end of year		353,200		$	8.39		337,800		$	8.62
Available for grant at end of year		399,520					394,520

At December 31, 2011, the Company’s stock price closed at $4.80. Based on this stock price, the aggregate intrinsic values of the Company’s outstanding stock options and vested stock options at December 31, 2011 were $38 thousand and $26 thousand, respectively.

Range of Exercise Price	Outstanding at December 31, 2011		Weighted- Average Exercise Price		Exercisable at December 31, 2011		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life (Years)
$  1.34 - $  4.75		25,500	$	3.29		18,700	$	3.41		7.3
$  6.50 - $  9.80		419,200	$	8.15		326,000	$	8.59		4.2
$10.97 - $12.00		8,500	$	11.52		8,500	$	11.52		2.6

Stock option information related to nonvested shares for ABI’s stock option plans for the year ended December 31, 2011 was as follows:

	Shares			Weighted- Average Grant Date Fair Value
Nonvested at December 31, 2010		150,700		$	3.32
Granted		3,000			5.13
Vested		(50,700	)		3.26
Forfeited		(3,000	)		3.49
Nonvested at December 31, 2011		100,000		$	3.40

The compensation expense the Company will recognize from January 2012 through December 2014 is approximately $340 thousand with respect to the nonvested options outstanding as of December 31, 2011, assuming those options vest in accordance with their terms.

Upon exercise of stock options, ABI issue shares from its treasury stock.