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Stock Options
 12 Months Ended
Dec. 31, 2011
Stock Options [Abstract]  
Stock Options
6. STOCK OPTIONS

The Company has a stock incentive plan for the issuance of up to 442,750 shares of common stock. The plan provides for granting eligible participants stock options or other stock awards, as described by the plan, at option prices ranging from 85% to 110% of fair market value at date of grant. Options granted expire up to seven years after the date of grant. Such options generally become exercisable over a three year period. A total of 119,823 shares of common stock are reserved for additional grants of options under the plan at December 31, 2011.

Under the plan, the Company charged compensation cost of $26,690 and $29,417 against income in 2011 and 2010, respectively.

As of December 31, 2011, there was approximately $32,000 of unrecognized compensation cost related to unvested share-based compensation awards granted which is expected to be recognized over the next three years.

Proceeds from the exercise of stock options were $73,210 for 2011 and $37,740 for 2010.

The fair value of options granted during 2011 and 2010 were estimated using the Black-Scholes option pricing model with the following assumptions:

 

         
    2011   2010

Dividend yield

   0%   0%

Expected volatility

   40.5% - 41.3%   45.2%

Expected life of option

   Five Years   Five Years

Risk-free interest rate

   1.0% - 2.0%   2.5%

Fair value of each option on grant date

   $2.75 - $2.83   $3.08

 

There were 9,000 options and 4,000 options granted during 2011 and 2010, respectively.

FASB ASC 718, Compensation – Stock Compensation specifies that initial accruals be based on the estimated number of instruments for which the requisite service is expected to be rendered. Therefore, the Company is required to incorporate a preexisting forfeiture rate based on the historical forfeiture expense and prospective actuarial analysis, estimated at 2%.

A summary of the status of the Company’s stock option plan as of December 31, 2011 and changes during the year then ended is presented below:

 

                                 

Options

   Shares     Weighted
Average
Exercise
Price		     Weighted
Average
Remaining
Contractual
Term (years)		     Aggregate
Intrinsic
Value		  

Outstanding at January 1, 2011

     40,500     $ 6.38                  

Granted

     9,000       7.66                  

Exercised

     (11,500 )      6.37                  

Expired and forfeited

     (3,250 )      7.82                  
   

 

 

    

 

 

                  

Outstanding at December 31, 2011

     34,750     $ 6.58       2.75     $ 45,695  
   

 

 

    

 

 

    

 

 

    

 

 

  

Vested or expected to vest at December 31, 2011

     34,750     $ 6.58       2.75     $ 45,695  
   

 

 

    

 

 

    

 

 

    

 

 

  

Exercisable at December 31, 2011

     16,916     $ 6.50       1.92     $ 24,111  
   

 

 

    

 

 

    

 

 

    

 

 

  

The weighted-average grant date fair value of options granted was $2.82 and $3.08 for the years ended December 31, 2011 and 2010, respectively. The total intrinsic value of options exercised was $20,687 for the year ended December 31, 2011 and $24,945 for the year ended December 31, 2010.

The following table summarizes information about stock options outstanding at December 31, 2011:

 

                                         
    Options Outstanding     Options Exercisable  

Range of Exercise Price

   Number
Outstanding at
December 31,
2011		     Weighted-
Average
Remaining
Contractual
Life (years)		     Weighted-
Average
Exercise
Price		     Number
Exercisable at
December 31,
2011		     Weighted-
Average
Exercise
Price		  

$5.00 -$5.99

     13,000       2.31     $ 5.00       6,500     $ 5.00  

$6.00 -$6.99

     4,250       1.58     $ 6.71       4,250     $ 6.71  

$7.00 - $8.99

     17,500       3.36     $ 7.73       6,166     $ 7.95  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
      34,750       2.75     $ 6.58       16,916     $ 6.50