Note 10 - Stock-Based Compensation

6 Months Ended

Jun. 30, 2014

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

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

Note 10 – Stock-Based Compensation

As of June 30, 2014, the Company has reserved 138,489 shares of common stock for options and other stock-based incentive awards that are still available for grant under our 2006 stock incentive plan, and 710,800 shares for options that have been granted under either the 2006 stock incentive plan or the 1998 stock option plan but have not yet been exercised. The Company issues new shares of common stock upon exercise of stock options. There were options for an aggregate of 146,400 shares granted in the first six months of 2014.

Amounts recognized in the condensed consolidated financial statements related to stock-based compensation are as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Total cost of stock-based compensation	$	141,570		$	128,567		$	284,177		$	260,675
Amount of income tax benefit recognized in earnings		(21,790	)		(21,799	)		(42,964	)		(43,803	)
Amount charged against net income	$	119,780		$	106,768		$	241,213		$	216,872

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model (Black-Scholes). The Company uses historical data to estimate the expected price volatility, expected option life and expected forfeiture rate. The Company bases its estimate of expected volatility for awards granted on daily historical trading data of its common stock for a period equivalent to the expected term of the award.

The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for the estimated life of the option. The Company estimates the expected term consistent with historical exercise and cancellation activity of its previous share-based grants with a seven year contractual term. Forfeitures are based on historical experience. The dividend yield is calculated based upon the dividend payments made during the prior four quarters as a percent of the average stock price for that period.

A summary of the option activity for the first six months of 2014 is as follows:

	Number of Shares			Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
Outstanding at December 31, 2013		622,300		$	12.34		3.7	$	2,174,673
Options granted		146,400		$	15.86		6.5
Options cancelled/expired		(3,800	)	$	15.46		--
Options exercised		(54,100	)	$	9.94		--
Outstanding at June 30, 2014		710,800		$	13.23		4.0	$	1,860,165
Exercisable at June 30, 2014		523,406		$	12.46		3.4	$	1,771,538

The total intrinsic value of options exercised was $108,326 and $136,582 during the three-month periods ended June 30, 2014 and 2013, respectively, and $335,940 and $173,288 during the six-month periods ended June 30, 2014 and 2013, respectively.

A summary of the status of the Company's unvested option shares as of June 30, 2014 is as follows:

	Number of Shares			Weighted Average Grant Date Fair Value
Unvested at December 31, 2013		79,225		$	3.98
Options granted		146,400		$	4.13
Options cancelled		(3,225	)	$	3.89
Options vested		(35,006	)	$	4.39
Unvested at June 30, 2014		187,394		$	4.02

As of June 30, 2014, there was $623,383 of total unrecognized compensation cost related to unvested stock-based compensation granted under the Company's plans. That cost is expected to be recognized over a weighted-average period of 1.3 years. The total fair value of option shares vested during the three-month periods ended June 30, 2014 and 2013 was $76,851 and $71,757, respectively, and $153,676 and $143,513 during the six-month periods ended June 30, 2014 and 2013, respectively.