11. Stock Option Plan

6 Months Ended

Jun. 30, 2013

Shares Held in Employee Stock Ownership Plan [Abstract]

Stock Option Plan

The 2009 Officer Stock Option Plan was adopted by our shareholders in May 2009 and provides for the granting of stock options for up to 350,000 shares of common stock to our key officers. Each option granted under the Plan vests according to a schedule designated at the grant date and has a term of no more than 10 years following the vesting date. Also, the option price per share was not to be less than the fair market value of our common stock on the date of grant. The 2009 Officer Stock Option Plan, which expires in May 2019, replaces the 1998 Officer Stock Option Plan (collectively the “Plans”) that expired in May 2008.

The fair value of our employee stock options granted is estimated at the date of grant using the Black-Scholes option-pricing model. This model requires the input of highly subjective assumptions, changes to which can materially affect the fair value estimate. Additionally, there may be other factors that would otherwise have a significant effect on the value of employee stock options granted but are not considered by the model. Because our employee stock options have characteristics significantly different from those of traded options and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options at the time of grant. There were no options granted during the first six months of 2013 or 2012.

We recognize compensation expense based on the estimated number of stock awards expected to actually vest, exclusive of the awards expected to be forfeited. During the first six months of 2012 and 2011, our stock compensation expense and related deferred taxes were insignificant.

A summary of activity in our Plans during the first six months of 2013 and 2012 is as follows:

	For the Six Months Ended June 30,
	2013					2012
					Weighted-					Weighted-
					Average					Average
					Exercise					Exercise
		Options			Price		Options			Price
Outstanding, January 1		249,700		$	18.98		317,180		$	18.17
Granted		—			—		—			—
Exercised		(12,000	)		5.09		—			—
Forfeited		(1,750	)		19.69		—			—
Expired		(39,700	)		23.41		(22,800	)		5.12
Outstanding, June 30		196,250		$	18.92		294,380		$	19.18

Other information regarding options outstanding and exercisable at June 30, 2013 is as follows:

	Options Outstanding				Options Exercisable
			Wted. Avg.	Aggregate			Aggregate
			Remaining	Intrinsic			Intrinsic
Range of	# of		Contractual	Value	# of		Value
exercise price	shares	WAEP	Life (yrs)	(in thousands)	shares	WAEP	(in thousands)
$2.54 - $6.00	22,750	$        5.01	3.48	$                                74	19,750	$         5.36	$                                   57
6.01 - 10.00	28,200	9.14	3.14	6	27,000	9.27	3
10.01 - 17.50	2,300	17.43	0.67	-	2,300	17.43	-
17.51 - 20.00	38,500	17.80	3.50	-	38,500	17.8	-
20.01 - 25.93	104,500	25.04	3.24	-	104,500	25.04	-
	196,250	18.92		$                                80	192,050	19.2	$                                   60