Stock-Based Compensation

12 Months Ended

Dec. 31, 2012

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

Stock-Based Compensation

Note 11.  Stock-Based Compensation

The Company has stock option agreements with its directors for serving on the Company’s board of directors and with certain officers and employees as part of their compensation. The option activity is as follows for years ended December 31, 2012 and 2011:

				Weighted  Average		Weighted  Average		Weighted  Average
	Number			Exercise Price		Fair Value at		Remaining		Intrinsic
	of Shares			per Share		Grant Date		Contractual Life		Value
Balance January 1, 2011		253,000		$	3.08				1.6 Years		-
Options granted		25,000			2.06	$	13,500		3.4 Years		-
Options exercised		-			0.00						-
Options expired		(50,000	)		3.18				-		-
Balance, January 1, 2012		228,000		$	2.92				2.0 years	$	-
Options granted		-			-						-
Options exercised		-			-						-
Options expired		-			-				-		-
Balance, December 31, 2012		228,000		$	2.92				2.0 years	$	-

Prior to June 30, 2010 the Company had not adopted a formal stock option plan. The number of options issued and the grant dates were determined at the discretion of the Company’s Board. Certain options vest at the date of grant and others vest over a one year period. The options are exercisable for periods not exceeding three to five years from the date of grant. On July 1, 2010 at its annual meeting of stockholders, the 2010 Stock Option and Award Plan was approved.

The fair values of stock options are estimated using the Black-Scholes method, which takes into account variables such as estimated volatility, expected holding period, dividend yield, and the risk free interest rate. The risk free interest rate is the five year treasury rate at the date of grant. The expected life is based on the contractual life of the options at the date of grant. With a change in management in 2008, it was determined that the Company would seek acquisitions in railroad related businesses. Accordingly, the 2011 expected volatility rate was estimated using the average volatility rates of public companies in the railroad industry. The Company uses an estimated forfeiture rate of 0% due to limited experience with historical forfeitures.

The assumptions used in the option-pricing models were as follows:

	2011
Risk free interest rate		1.51	%
Expected life (years)		5
Expected volatility		26	%
Dividend yield	$	-

The fair value of shares that vested was $5,538 and $28,153 for the years ended December 31, 2012 and 2011, respectively.

As of December 31, 2012 total compensation cost related to non-vested awards not yet recognized was $7,807 to be recognized over an 18 month period.