STOCK-BASED COMPENSATION

9 Months Ended

Sep. 30, 2011

Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]

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

NOTE 4 - STOCK-BASED COMPENSATION

Stock-based Compensation

Total stock-based compensation expense is attributable to the granting of, and the remaining requisite service periods of, stock options.  Compensation expense attributable to stock-based compensation was $57,000 and $18,000 during the three-month periods ended September 30, 2011 and 2010, respectively, and was $143,000 and $87,000 for the nine-month periods ended September 30, 2011 and 2010, respectively.  The compensation expense is recognized in selling, general and administrative expenses on the Company’s statements of income on a straight-line basis over the vesting periods.  The Company recognizes compensation cost over the requisite service period. However, the exercisability of the respective non-vested options, which are at pre-determined dates on a calendar year, do not necessarily correspond to the period(s) in which straight-line amortization of compensation cost is recorded. As of September 30, 2011, the Company had approximately $259,000 of total unrecognized compensation cost related to non-vested awards granted under our stock-based plans, which we expect to recognize over a weighted-average period of 1.3 years.

The expected term was based on historical exercises and terminations. The volatility for the periods with the expected term of the options is determined using historical volatilities based on historical stock prices. The dividend yield is 0% as the Company has historically not declared dividends and does not expect to declare any in the near future.

Stock Option Plan

The Company’s 2002 Incentive Stock Option Plan (the “Current Plan”) authorizes the issuance, to employees and directors, of options to purchase a maximum of 1,100,000 shares of Class A Common Stock. These options must be issued within ten years of the effective date of the Current Plan and are exercisable for a ten year period from the date of grant, at prices not less than 100% of the market value of the Class A Common Stock on the date the option is granted. Incentive stock options granted to any 10% stockholder are exercisable for a five year period from the date of grant, at prices not less than 110% of the market value of the Class A Common Stock on the date the option is granted. Pursuant to the Current Plan, the Stock Option Committee has the discretion to award non-qualified stock option grants with various vesting parameters.  Options have vesting periods of immediate to five years. In the event options granted contain a vesting schedule over a period of years, the Company recognizes compensation cost for these awards over the requisite service period. The Current Plan, which terminates in 2012, is the successor to the Company’s 1992 Incentive Stock Option Plan (the “Prior Plan”).

The Company estimated the fair value of the 70,000 common stock options granted during the nine-month period ended September 30, 2011 using the following assumptions:

Risk-free interest rate		3.20	%
Expected term (in years)	6.5 years
Volatility		61.99	%
Dividend yield		0	%
Weighted-average fair value of options granted	$	2.80

The following is a summary of the changes in outstanding options during the nine month period ended September 30, 2011:

	Option Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding, January 1, 2011		585,624	$	6.73		5.6		—
Granted		70,000		4.56		9.6		—
Exercised		—		—		—		—
Forfeited		—		—		—		—
Expired		—		—		—		—
Outstanding, September 30,  2011		655,624	$	6.50		5.4	$	86,000
Vested, September 30, 2011		457,624	$	7.62		4.0	$	6,000

The following is a summary of changes in non-vested shares for the nine months ended September 30, 2011, which the Company expects will vest in the future.

	Option Shares			Weighted Average Grant- Date Fair Value
Non-vested shares, January 1, 2011		165,333		$	2.19
Granted		70,000			2.80
Vested		(37,333	)		2.44
Forfeited		—			—
Non-vested shares, September 30, 2011		198,000		$	2.36

The number of shares of Class A common stock reserved for stock options available for issuance under the Current Plan as of September 30, 2011 was 302,212. All of the options outstanding at September 30, 2011 were issued under the Current Plan.