Note 4 - Stock-Based Compensation

6 Months Ended

Jun. 30, 2011

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

4. STOCK-BASED COMPENSATION

We have one stock option plan which provides for annual stock option grants to non-employee directors with an exercise price equal to the fair market value of the shares at the date of grant.  Under this plan, 12,000 and 9,000 options were awarded to directors in the first half of 2011 and 2010, respectively.  These options vest and become exercisable six months from the option grant date.  We had two other stock option plans from 1995 which provided for stock option grants to officers, key employees and non-employee directors.  These plans expired in 2005.  The expiration of the plans has no effect on the options previously granted.  Options outstanding and exercisable were granted at a stock option price which was not less than the fair market value of our common stock as of closing on the date the option was granted and no option has a term in excess of ten years.  We recognized share based compensation expense of $7,130 and $18,388 for each of the quarters ended June 30, 2011 and 2010, respectively, and $26,030 and $18,388 for each of the six month periods ended June 30, 2011 and 2010, respectively, as a component of operating expenses.

During the six months ended June 30, 2011 and 2010, the stock option activity under our stock option plans was as follows:

	Weighted Average Exercise Price		# of shares		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding, January 1, 2010	$	2.33		197,700
Granted		5.30		9,000
Cancelled		-		-
Exercised		1.644		134,700
Outstanding, June 30, 2010	$	4.27		72,000		4.23	$	152,133
Exercisable, June 30, 2010	$	4.12		63,000		4.12	$	133,745
Outstanding, January 1, 2011	$	4.35		103,600
Granted		1.19		12,000
Cancelled		-		-
Exercised		-		-
Outstanding, June 30, 2011	$	4.40		115,600		5.37	$	206,332
Exercisable, June 30, 2011	$	4.35		103,600		5.44	$	192,075

Other information pertaining to option activity during the six-month periods ended June 30, 2011 and 2010 are as follows:

	June 30, 2011		June 30, 2010
Weighted average grant-date fair value of stock options granted	$	14,257	$	18,388
Total fair value of stock options vested	$	42,202		N/A
Total intrinsic value of stock options exercised		N/A	$	112,343

As of June 30, 2011 and 2010 unrecognized compensation cost was $7,129 and $0, respectively.