Stock-Based Compensation

9 Months Ended

Sep. 30, 2012

Stock-Based Compensation [Abstract]

Stock-Based Compensation

Note G: Stock-Based Compensation

We compensate officers, directors and key employees with stock-based compensation under our 1995 Long-Term Incentive and Stock Option Plan (the "1995 Plan"), which terminated in 2005, and our 2005 Stock Incentive Plan (the "2005 Plan"). The 1995 Plan and the 2005 Plan were approved by our shareholders and are administered under the supervision of our Board of Directors. Stock option awards are granted at exercise prices equal to the closing price of our stock the day before the date of grant. Generally, options vest proportionally over periods of three to five years from the dates of the grant, beginning one year from the date of grant, and have a contractual term of six to ten years. Compensation expense, net of estimated forfeitures, is recognized ratably over the vesting period. Stock-based compensation expense included in selling, general and administrative expense for the three-month periods ended September 30, 2012 and 2011 was $3,500 and $106,000, respectively. Stock-based compensation expense included in selling, general and administrative expense for the nine-month periods ended September 30, 2012 and 2011 was $186,000 and $308,000, respectively. At September 30, 2012, a total of 85,260 shares were available for grant under the 2005 Plan.

A summary of the option activity for the first nine months of 2012 is as follows:

	Number of Shares			Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Options outstanding at December 31, 2011		535,333		$	9.58		4.1	$	250,416
Granted		109,750			5.29		8.2		—
Exercised		(56,000	)		2.17		—		207,790
Forfeited or expired		(126,510	)		10.93		—		—
Options outstanding at September 30, 2012		462,573		$	9.08		4.7	$	2,730
Options exercisable at September 30, 2012		267,073		$	10.37		2.5	$	2,730

The total intrinsic value of options exercised was $20,570 and $73,295 during the three-month periods ended September 30, 2012 and 2011, respectively. The total intrinsic value of options exercised was $207,790 and $119,649 during the nine-month periods ended September 30, 2012 and 2011, respectively. As of September 30, 2012, there was $417,500 of total unrecognized compensation cost related to non-vested stock options. The weighted average period over which the compensation cost is expected to be recognized is 2.5 years.