STOCK BASED-COMPENSATION

12 Months Ended

Dec. 31, 2011

STOCK BASED-COMPENSATION [Abstract]

STOCK BASED-COMPENSATION

8. STOCK BASED-COMPENSATION

In June 2010, the 2010 Stock Incentive Plan (the "Plan") was approved by shareholders.  The purpose of the Plan is the grant of nonvested share awards (referred to in the Plan as "Restricted Stock") to officers (excluding senior management) and employees ("Participants").  The Plan permits the issuance of up to 500,000 shares of common stock.   No Participant may be granted awards for more than 5,000 shares during any calendar year.  Share awards are awarded with a vesting period of at least three years.

The Company's Restated Equity Compensation Plan provided incentives to eligible employees, officers and directors in the form of incentive stock options, nonqualified stock options, stock appreciation rights, stock awards, performance shares and other stock-based awards.   The Restated Equity Compensation Plan expired in 2003 and no options or awards are available for future grant, however, exercises of options may still occur in accordance with the terms of the various grants.

The Company recorded $283,000, $12,000 and $5,000 in total share-based compensation expense in 2011, 2010, and 2009, respectively.

Stock Options - The Compensation Committee of the Board of Directors determined the exercise price (not to be less than the fair market value of the underlying stock) of stock options at the date of grant.  Options generally become exercisable in installments over a period of one to five years and expire ten years from the date of grant.  The Company estimated the fair value of its stock options using the Black-Scholes option-pricing model.  There were no options granted during 2011, 2010 or 2009.

The following table summarizes the stock option transactions for 2011:

	Number of Shares Underlying Options	Weighted-Average Exercise Price of Options	Weighted-Average Remaining Contractual Life of Options	Aggregate Intrinsic Value of Options (In thousands)
Outstanding at December 31, 2010	250,584	$  4.40
Granted	-	-
Exercised	(41,709)	$  6.56
Forfeited/cancelled	-	-
Outstanding, vested and   exercisable at December 31, 2011	208,875	$  3.97	1.70	$  2,105

The aggregate intrinsic value of options outstanding at December 31, 2011, is calculated as the difference between the market price of the Company's common stock at December 31, 2011, and the exercise price of the underlying options, multiplied by the number of in-the-money options.  The total intrinsic value of options exercised was $297,000, $1,822,000 and $546,000 in 2011, 2010, and 2009, respectively.  Cash received from option exercises was $139,000, $1,069,000, and $345,000, in 2011, 2010, and 2009, respectively.  The actual tax benefit realized for the tax deductions from option exercises was $111,000 and $10,000 in 2010 and 2009, respectively.  There was no tax benefit realized for the tax deductions from option exercises in 2011.

Nonvested Share Awards - Share awards are issued to Participants as an incentive for the performance of future services that will contribute materially to the successful operation of the Company.  Owners of share awards have the rights of shareowners, including the right to vote.  Share awards are awarded with a vesting period of at least three years.

A summary of the status of the Company's nonvested share awards at December 31, 2011 and changes during 2011 is presented below:

	Shares	Weighted-Average Grant Date Fair Value
Outstanding at December 31, 2010	69,200	$     12.94
Granted	-
Vested	-
Forfeited	-
Outstanding and expected to vest at   December 31, 2011	69,200	$   12.94

At December 31, 2011, there was $600,000 of total unrecognized compensation cost related to nonvested share awards that is expected to be recognized over a weighted-average period of approximately 38 months.  The total fair value of share awards vested was $45,000 in 2009.  No share awards vested in 2011 or 2010.