Stock Compensation

9 Months Ended

Sep. 30, 2011

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

Stock Compensation

Note 9.  Stock Compensation

Refer to our Annual Report on Form 10-K for the year ended December 31, 2010 for a complete description of all stock-based compensation plans.

Our stock award plan provides for granting non-qualified stock options, stock awards and restricted stock awards to employees. We recognize stock compensation charges related to stock award plans when management concludes it is probable the participant will earn the award. Share-based compensation expense includes amounts recognized related to the Company Employee Stock Purchase Plan. This plan allows participating employees to acquire shares of common stock at 85% of fair market value on one specified date. Stock-based compensation expense was $725,000 and $390,000 respectively in the nine months ended September 30, 2011 and 2010. The increase in the stock-based compensation expense was primarily driven by the increase in our stock price in 2011. This includes compensation expense for share-based payment awards granted prior to, but not vested as of September 30, 2011.

The fair value of each option award is estimated on the date of the grant using a Black-Scholes option valuation model. We use a seven-year period to calculate the historical volatility of its stock price for use in the valuation model. The dividend yield rate is based on our current dividend payout pattern and current market price. The risk-free rate for options is based on a U.S. Treasury rate commensurate with the expected terms. The expected term of options granted is derived from historical experience and represents the period of time that options granted are expected to be outstanding. Historical data is used to estimate pre-vesting forfeitures and are estimated at the time of the grant and revised, if necessary, in subsequent periods if actual forfeitures differ from the estimate.

In April 2011, 10,000 options were granted associated with the acceptance of the Chief Operating Officer position. Other than this stock award issued, options were last granted under the Company's Stock Award Plan in September 2006. The weighted average grant date fair value of options issued was $0.80.

As of September 30, 2011, there was $6,000 of total unrecognized compensation costs related to non-vested stock options granted under the Company's Stock Award Plan. This expense is expected to be recognized over a weighted average period of three years.

A summary of stock option activity is as follows:

				Weighted Average
	Shares			Exercise Price
Outstanding at January 1, 2011		343,250		$	12.45
Granted		10,000			9.03
Exercised		(10,000	)		8.48
Forfeited		-			-
Expired		(78,000	)		15.82
Outstanding at September 30, 2011		265,250		$	11.48
Exercisable at September 30, 2011		255,250		$	11.58

The following table provides certain information with respect to stock options outstanding at September 30, 2011:

Range of		Stock Options		Weighted Average		Weighted Average Remaining
Exercise Prices		Outstanding		Exercise Price		Contractual Life
	$6.00 - $8.00		15,000	$	6.95		4.92
	$8.00 - $12.00		156,950		10.25		2.70
	$12.00 - $16.00		83,000		13.95		0.53
	$16.00 - $21.00		10,300		16.98		0.17
			265,250	$	11.48		2.05
Aggregate intrinsic value:				$	91,000

The following table provides certain information with respect to stock options exercisable at September 30, 2011:

Range of		Stock Options		Weighted Average		Weighted Average Remaining
Exercise Prices		Exercisable		Exercise Price		Contractual Life
	$6.00 - $8.00		15,000	$	6.95		4.92
	$8.00 - $12.00		146,950		10.34		2.23
	$12.00 - $16.00		83,000		13.95		0.53
	$16.00 - $21.00		10,300		16.98		0.17
			255,250	$	11.58		1.75
Aggregate Intrinsic Value				$	85,000