Note 10 - Stock-Based Compensation

9 Months Ended

Sep. 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 September 30, 2014, we have reserved 151,639 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 684,325 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. We issue new shares of common stock upon exercise of stock options. There were options for an aggregate total of 146,400 shares granted in the first nine-months of 2014.

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

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Total cost of stock-based compensation	$	129,309		$	129,594		$	413,447		$	390,269
Amount of income tax benefit recognized in earnings		(24,311	)		(14,590	)		(67,275	)		(58,393	)
Amount charged against net income	$	104,998		$	115,004		$	346,172		$	331,876

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model (Black-Scholes). We use historical data to estimate the expected price volatility, expected option life and expected forfeiture rate. Our estimates are based on expected volatility for awards granted on daily historical trading data of our 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. We estimate 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 nine-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		6.3
Options cancelled/expired		(16,950	)	$	15.34		--
Options exercised		(67,425	)	$	10.09		--
Outstanding at September 30, 2014		684,325		$	13.24		3.8	$	1,386,223
Exercisable at September 30, 2014		526,600		$	12.61		3.3	$	1,348,418

The total intrinsic value of options exercised was $68,433 and $10,133 during the three-month periods ended September 30, 2014 and 2013, respectively, and $404,373 and $183,421 during the nine-month periods ended September 30, 2014 and 2013, respectively.

A summary of the status of our unvested option shares as of September 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		(15,400	)	$	3.98
Options vested		(52,500	)	$	4.39
Unvested at September 30, 2014		157,725		$	3.98

As of September 30, 2014, there was $403,080 of total unrecognized compensation cost related to unvested stock-based compensation granted under our plans. That cost is expected to be recognized over a weighted-average period of 1.2 years. The total fair value of option shares vested during the three-month periods ended September 30, 2014 and 2013 was $76,799 and $71,756, respectively, and $230,475 and $215,269 during the nine-month periods ended September 30, 2014 and 2013, respectively.