Note 3 - Stock-Based Compensation

9 Months Ended

Sep. 30, 2014

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

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

3.     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 options were awarded to directors in the first nine months of 2013, while no options were awarded in 2014. These options vest and become exercisable six months from the option grant date. 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 $0 and $11,686 for the quarter and nine months ended September 30, 2013 as a component of operating expenses. No share based compensation expense pertaining to stock options grants was recognized in 2014.

During the nine months ended September 30, 2014 and 2013, 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, 2013	$	4.53		121,600
Granted		6.87		12,000
Cancelled		-		-
Exercised		4.23		(49,000	)
Outstanding, September 30, 2013	$	5.04		84,600			7.22	$	104,656
Exercisable, September 30, 2013	$	5.04		84,600			7.22	$	104,656
Outstanding, January 1, 2014	$	5.04		84,600
Granted		-		-
Cancelled		-		-
Exercised		4.32		(12,200	)
Outstanding, September 30, 2014	$	5.78		72,400			6.42	$	89,840
Exercisable, September 30, 2014	$	5.78		72,400			6.42	$	89,840

Other information pertaining to option activity during the nine-month periods ended September 30, 2014 and 2013 are as follows:

	September 30, 2014		September 30, 2013
Weighted average grant-date fair value of stock options granted		N/A	$	0.97
Total fair value of stock options vested		N/A	$	11,686
Total intrinsic value of stock options exercised	$	14,816	$	113,790

The fair value of options at the date of grant was estimated using the Black-Scholes option pricing model with the following weighted-average assumptions:

	2014	2013
Volatility	N/A		19.1	%
Expected option life (in years)	N/A		3
Interest rate (risk free)	N/A		0.80	%
Dividends	None		None

There was no unrecognized compensation cost as of September 30, 2014 and 2013.

We have a restricted stock plan that was adopted by our Board of Directors in January 2013 and approved by our stockholders in June 2013. The plan reserves up to 300,000 shares of our common stock for restricted stock awards to our executive officers, non-employee directors and other key employees. Awards granted under the plan may be stock awards or performance awards, and may be subject to a graded vesting schedule with a minimum vesting period of four years.

In February 2014, our Chief Executive Officer, Chief Financial Officer and Senior Vice President were awarded restricted stock grants consisting of 9,375 shares each. In addition, four of our independent directors were awarded restricted stock grants consisting of 1,619 shares each. The grants will vest in equal annual amounts over a four-year period. The fair value of nonvested restricted common stock awards is the market value of our common stock on the date of grant. Compensation costs for these awards will be recognized on a straight-line basis over the four year vesting period.

A summary of the activity for nonvested restricted common stock awards as of September 30, 2014 is presented below:

	Shares		Grant Fair Value
Balance, January 1, 2014		-		-
Granted		34,601	$	8.96
Forfeited		-		-
Vested		-		-
Balance, September 30, 2014		34,601	$	8.96

Pertaining to restricted stock awards, we recognized share based compensation expense of $19,376 and $48,441, respectively, during the three and nine months ended September 30, 2014 as a component of operating expenses. As of September 30, 2014, there was unrecognized compensation cost related to non-vested restricted stock awards of $261,584 to be recognized in equal amounts over a period of four years.