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Share-Based Compensation
 6 Months Ended
Jun. 30, 2011
Share-Based Compensation  
Share-Based Compensation

(6)                    Share-Based Compensation

 

At the annual meeting of stockholders held on June 8, 2011, the stockholders voted to increase the maximum number of shares issuable under the 2003 Incentive Plan from 1,250,000 to 2,250,000.

 

Share-based compensation cost is measured at the grant date based on the calculated fair value of the award and is recognized as an expense over the employee’s requisite service period (generally the vesting period of the equity grant).

 

The Company issues share-based payments through several plans that are described in detail in the notes to the consolidated financial statements for the year ended December 31, 2010.  The compensation cost charged against income for those plans is as follows:

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

30-Jun-2011

 

30-Jun-2010

 

30-Jun-2011

 

30-Jun-2010

 

Cost of sales

 

$

—

 

$

—

 

$

—

 

$

—

 

Selling, general & administrative expense

 

382,022

 

375,786

 

681,357

 

570,624

 

Total share-based compensation expense

 

$

382,022

 

$

375,786

 

$

681,357

 

$

570,624

 

 

Share-based compensation for the three- and six-month periods ended June 30, 2011, include $59,958 of the Company’s stock granted to the Board of Directors in lieu of fees.  There were no shares issued in the same periods ended June 30, 2010.

 

The total income tax benefit recognized in the condensed consolidated statements of income for share-based compensation arrangements was approximately $134,000 and $136,000 for the three-month periods ended June 30, 2011, and 2010, respectively, and approximately $219,000 and $206,000 for the six-month periods ended June 30, 2011, and 2010, respectively.

 

The following is a summary of stock option activity under all plans for the six-month period ended June 30, 2011:

 

 

 

Shares Under
Options

 

Weighted
Average
Exercise Price

 

Aggregate
Intrinsic Value

 

Outstanding at December 31, 2010

 

764,496

 

$

4.12

 

 

 

Granted

 

13,205

 

16.17

 

 

 

Exercised

 

(113,680

)

1.43

 

 

 

Cancelled or expired

 

—

 

—

 

 

 

Outstanding at June 30, 2011

 

664,021

 

4.83

 

$

9,359,233

 

Options exercisable at June 30, 2011

 

610,271

 

4.47

 

$

8,820,146

 

Vested and expected to vest at June 30, 2011

 

664,021

 

4.83

 

$

9,359,233

 

 

During the six months ended June 30, 2011, and 2010, the total intrinsic value of all options exercised (i.e., the difference between the market price on the exercise date and the price paid by the employees to exercise the options) was $1,823,092 and $1,747,962, respectively, and the total amount of consideration received from the exercised options was $162,182 and $655,627, respectively.

 

During the three-month periods ended June 30, 2011, and 2010, the Company recognized compensation expenses related to stock options granted to directors and employees of  $84,467 and $163,244, respectively.  During the six-month periods ended June 30, 2011, and 2010, the Company recognized compensation expenses related to stock options granted to directors and employees of $104,747 and $170,753, respectively.

 

On March 2, 2011, the Company’s Compensation Committee approved the issuance of 25,000 shares of common stock to the Company’s Chairman, Chief Executive Officer, and President under the 2003 Incentive Plan.  The shares will be issued on or before December 31, 2011.  The Company has recorded compensation expense of $106,251 and $212,502 during the three- and six-month periods ended June 30, 2011, based on the grant date price of $16.93 at March 2, 2011.

 

The following table summarizes information about Restricted Stock Units (“RSUs”) activity during the six-month period ended June 30, 2011:

 

 

 

Restricted Stock
Units

 

Weighted Average
Award Date
Fair Value

 

Outstanding at December 31, 2010

 

251,694

 

$

5.80

 

Awarded

 

33,663

 

18.27

 

Shares vested

 

(54,706

)

5.13

 

Forfeited / cancelled

 

—

 

—

 

Outstanding at June 30, 2011

 

230,651

 

7.78

 

 

During the three- and six-month periods ended June 30, 2011, the Company recorded compensation expense related to RSUs of $131,346 and $254,150, respectively.  The Company recorded $164,417 and $303,621 for the same periods ended June 30, 2010.

 

At its discretion, the Company allows option and RSU holders to surrender previously owned common stock in lieu of paying the withholding taxes due upon the exercise of options or the vesting of RSUs.  During the six-month periods ended June 30, 2011, and 2010,  35,930 and 29,213 shares were surrendered at an average market price of $17.78 and $10.42, respectively.

 

It has been the Company’s practice to allow executive officers to take a portion of their earned bonuses in the form of the Company’s common stock.  The value of the stock received by executive officers, measured at the closing price on the date of grant, was $55,000 and $79,248 for the six-month periods ended June 30, 2011, and 2010, respectively.