OTHER RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2011

OTHER RELATED PARTY TRANSACTIONS [Abstract]

OTHER RELATED PARTY TRANSACTIONS

NOTE 11. OTHER RELATED PARTY TRANSACTIONS

Compensation of Non-Employee Directors

We compensate our board members with a combination of both stock options and cash payments. During the year ended December 31, 2011, we granted 15,000 stock options to new board members having a fair value of approximately $20,250 and we paid $20,000 in cash amounts to our independent directors as consideration for their service on our Board of Directors. We pay $1,000 cash for in person board meetings and $500 cash payments for telephonic board meetings. Prior to 2011, we compensated our board members with stock options only.  For the years ended December 31, 2010 and 2009, we granted 64,160 and 37,500 stock options with a fair value of approximately $62,900 and $131,200, respectively.

Research and Development Consulting Services

A relative of Bovie's Director of Strategic Development is considered a related party. Arik Zoran, is a consultant of the Company doing business as AR Logic, Inc., which is a consulting firm owned by Arik Zoran, Mr. Citronowicz's brother. During January 2011, we entered into a three year consulting services agreement with AR Logic that provides for a monthly retainer for engineering support for our existing generator product line and a separate hourly based fee structure for additional consulting related to new product lines. The consulting rates are consistent with rates of an arms length transaction. AR Logic was paid consulting fees of approximately $171,700 during 2011. Previous to 2011, Mr. Zoran was an employee in charge of the engineering department and was paid inclusive of benefits $192,014, and $188,363 for 2010 and 2009, respectively.

A second relative of Bovie's Director of Strategic Development is considered a related party. Yechiel Tsitrinovich is also a brother of Mr. Citronowicz, and acts as a consultant to the Company related to research and development of certain products. Mr. Tsitrinovich has a royalty contract with us related to the creation and design of a proprietary technology that is used in some of our generators. Mr. Tsitrinovich was paid a combination of consulting fees and royalties on previous product designs approximating $85,310, $65,654, and $82,558 for 2011, 2010, and 2009, respectively.

Professional Services

A director of Bovie is president and a shareholder of Ronin Consulting Group, Inc., a company which provides various financial and analytical project consulting services to Bovie. Ronin Consulting Group, Inc. was paid fees approximating $80,000, $80,000 and $99,800 during 2011, 2010 and 2009, respectively.

A second director of Bovie provides consulting services related to research and development of certain products and was paid fees approximating $30,000 during 2011, 2010, and 2009, respectively.

Related party transactions and contracts are reviewed by our independent audit committee.