STOCK-BASED COMPENSATION

9 Months Ended

Sep. 30, 2013

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-option compensation

The Company accounts for stock-based compensation, including options and non-vested shares, according to the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 718, “Share Based Payment.”

Stock-option compensation expense is attributable to the granting of, and the remaining requisite service periods of, stock options. Compensation expense attributable to stock-options was approximately $94,000 and $52,000, respectively, during the three-month periods ended September 30, 2013 and 2012. Compensation expense attributable to stock-options was approximately $245,000 and $139,000, respectively, during the nine-month periods ended September 30, 2013 and 2012.  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 exercisability of the respective non-vested options, which are at pre-determined dates on a calendar year, does not necessarily correspond to the period(s) in which straight-line amortization of compensation cost is recorded. As of September 30, 2013, the Company had approximately $415,000 of total unrecognized compensation cost related to non-vested awards granted under its stock-based plans, which it expects to recognize over a weighted-average period of 1.2 years.

The expected term of stock options is based on historical exercises and terminations. The volatility 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 have any current plans to declare any in the future.

The following is a summary of the changes in outstanding options during the nine-month period ended September 30, 2013:

		Weighted		Weighted Average
		Average		Remaining	Aggregate
		Exercise		Contractual Life	Intrinsic
	Option Shares	Price		(Years)	Value
Outstanding, January 1, 2013	584,688	$	6.48	5.4	$	758,000
Granted	71,500		8.21
Exercised	(22,000)		3.80
Forfeited	—
Expired	—
Outstanding, September 30, 2013	634,188	$	6.77	5.1	$	1,181,900
Vested, September 30, 2013	489,355	$	6.94	4.1	$	929,002

The following is a summary of changes in non-vested shares for the nine months ended September 30, 2013:

		Weighted Average Grant-
	Option Shares	Date Fair Value
Non-vested shares, January 1, 2013	141,000	$	2.94
Granted	71,500		6.72
Vested	(67,667)		2.92
Forfeited	—		—
Non-vested shares and expected to vest, September 30, 2013	144,833	$	4.81

The number of shares of Common Stock available for issuance under the 2012 Stock Incentive Plan as of September 30, 2013 was 199,512. At September 30, 2013, there were 113,500 options outstanding issued under the 2012 Stock Incentive Plan and 520,688 options outstanding issued under the 2002 Stock Incentive Plan.

Restricted Stock

On May 28, 2013, the Company granted 666 restricted shares of its common stock to each non-employee member of its Board of Directors totaling 3,330 restricted shares. These restricted shares cannot be traded earlier than the first anniversary of the grant date. The Company determined the fair value of these shares to be $ 8.95, which was the closing price of the Company’s Common Stock on the date of the grant. The Company will recognize non-cash compensation expense of approximately $ 2,500 per month in its selling, general and administrative expenses through May 2014.

  Treasury Stock

On January 31, 2013, the Company received 2,585 shares of its Class A Common Stock, tendered as payment for the exercise by an employee of options to purchase 5,500 shares of Class A Common Stock. The value of this stock, based on the then-current stock price, was approximately $22,000, and the Company recorded the transaction as an increase in Treasury Stock.