NOTE 7 - STOCKHOLDERS’ EQUITY

Employee Stock Option Plans

The Company has a 2000 Employee Stock Option Plan which initially provided for options to purchase up to 1,000 shares of the Company’s common stock to key employees, officers and directors. The Board of Directors determines the amount and terms of the options, which cannot exceed ten years. At December 31, 2012, options for 123 shares were outstanding under this plan. There are no shares available for future grant.

The 2007 Stock and Incentive Compensation Plan provides for stock awards up to 500 shares of the Company’s common stock to employees, non-employee directors or independent contractors, with a maximum number of full value restricted share awards up to 200. Historically, the Company has issued restricted share and/or option awards to employees and non-employee directors. The Board of Directors determines the amount and terms of the options, which cannot exceed ten years. Restricted share awards cliff vest on the third anniversary, while option share awards vest annually in 25% increments over four years. As of December 31, 2012, options for 219 shares had been granted and were outstanding under this plan, while 129 restricted shares had been awarded. Shares available for future grant amounted to 99 shares at December 31, 2012.

Changes in award shares outstanding are summarized as follows:

	Restricted shares				Options
	Shares		Wtd. Avg. Grant Price		Shares		Wtd. Avg. Ex. Price
December 31, 2009	80		$	30.62	430		$	18.87
Granted	23		42.49		2		31.91
Vested or Exercised	—		—		(95	)	5.44
Forfeited	(11	)	29.23		(23	)	(27.59		)
December 31, 2010	92		$	33.74	314		$	22.39
Granted	20		36.69		32		36.69
Vested or Exercised	(35	)	26.81		(38	)	10.86
Forfeited	(6	)	34.76		(16	)	(28.05		)
December 31, 2011	71		$	37.85	292		$	25.15
Granted	29		24.16		63		24.16
Vested or Exercised	(44	)	37.61		(11	)	6.49
Forfeited	(6	)	28.55		(3	)	(20.19		)
December 31, 2012	50		$	31.35	341		$	25.62

The following table summarizes information about stock options at December 31, 2012:

	Options Outstanding				Options Exercisable
Range of Exercise Price	Shares	Wtd. Avg. Remaining Contractual Life	Wtd. Avg. Exercise Price		Shares	Wtd. Avg. Remaining Contractual Life	Wtd. Avg. Exercise Price
$4.00-20.01	8	1.87	$	4.28	8	1.87	$	4.28
$20.01-30.00	226	5.77	$	21.37	162	4.39	$	20.29
Over $30.00	107	6.80	$	36.11	70	6.45	$	35.96
	341	6.01	$	25.62	240	4.91	$	24.33

The following table details exercisable options and related information for the year ended December 31:

	2012		2011		2010
Exercisable at end of year	240		219		199
Weighted average price	$	24.33	$	22.21	$	19.59

Weighted average fair value of options granted during the year	$	10.92	$	18.31	$	11.08

The following table details unvested options for the year ended December 31, 2012:

	Shares		Wtd. Avg. Ex. Price
December 31, 2011	73		$	34.02
Vested	35		31.63
Granted	63		24.16
Forfeited	(0	)	(22.18		)
December 31, 2012	101		$	28.69

The fair value of each option award is estimated on the date of grant using the Monte Carlo option valuation model with suboptimal exercise behavior. The Monte Carlo model places greater emphasis on market evidence and predicts more realistic results because it considers open form information including volatility, employee exercise behaviors and turnover. The following assumptions were used in determining the fair value of option awards for 2012:

Grant date		Equivalent interest rate		Equivalent volatility		Implied expected lives
February, 2012		1.92	%	40.00	%	7.98

As of December 31, 2012, there was $1,895 of total unrecognized compensation cost, after estimated forfeitures, related to unvested share-based compensation granted under the plans. That cost is expected to be recognized over a weighted-average period of 2.10 years. The total fair value of option shares vested was $3,124 and $2,581 during the years ended December 31, 2012 and 2011, respectively.

Employee Stock Purchase Plan

The Company has an Employee Stock Purchase Plan (2009 ESPP) which will provide employees of the Company and its subsidiaries with an opportunity to participate in the growth of the Company and to further align the interest of the employees with the interests of the Company through the purchase of shares of the Company’s Common Stock. Under the 2009 ESPP, 300 shares of the Company’s Common Stock have been authorized for issuance. As of December 31, 2012, all 300 shares remain available.

Directors Deferred Compensation Plan

The Company had a Non-Employee Directors Deferred Compensation Plan (the Deferred Plan) which allowed Directors to elect to receive fees for Board services in the form of shares of the Company’s common stock. Directors’ fees were expensed as incurred whether paid in cash or deferred into the Deferred Plan. The Deferred Plan was terminated as of February 22, 2010 with all shares distributed on February 23, 2011. During 2012, the Company redeemed 72 shares of stock for $1.7 million related to this distribution.