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Share-Based Compensation
 3 Months Ended
Mar. 31, 2012
Share-Based Compensation  
Share-Based Compensation

 

(5)                   Share-Based Compensation

 

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, 2011.  The compensation cost charged against income for those plans is as follows:

 

 

 

Three Months Ended

 

 

 

31-Mar-2012

 

31-Mar-2011

 

Cost of sales

 

$

—

 

$

—

 

Selling, general & administrative expense

 

186,901

 

249,335

 

Total share-based compensation expense

 

$

186,901

 

$

249,335

 

 

The total income tax benefit recognized in the condensed consolidated statements of income for share-based compensation arrangements was approximately $61,000 and $89,000 for the three-month periods ended March 31, 2012, and 2011, respectively.

 

The following is a summary of stock option activity under all plans for the three-month period ended March 31, 2012:

 

 

 

Shares Under
Options

 

Weighted
Average
Exercise Price

 

Aggregate
Intrinsic Value

 

Outstanding at December 31, 2011

 

638,521

 

$

4.98

 

 

 

Granted

 

—

 

—

 

 

 

Exercised

 

(50,370

)

1.60

 

 

 

Cancelled or expired

 

(11,250

)

9.09

 

 

 

Outstanding at March 31, 2012

 

576,901

 

5.20

 

$

8,221,866

 

Options exercisable at March 31, 2012

 

530,651

 

4.75

 

$

7,801,423

 

Vested and expected to vest at March 31, 2012

 

576,901

 

5.20

 

$

8,221,886

 

 

During the three-month periods ended March 31, 2012, and 2011, 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 $845,994 and $1,792,155, respectively, and the total amount of consideration received from the exercised options was $80,708 and $128,094, respectively.

 

During the three-month periods ended March 31, 2012, and 2011, the Company recognized compensation expenses related to stock options granted to directors and employees of  $18,186 and $20,280, respectively.

 

On February 17, 2012, the Company’s Compensation Committee approved the award of $300,000 payable in 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, 2012.  The Company has recorded compensation expense associated with the award of $75,000 during the three-month period ended March 31, 2012.

 

The following table summarizes information about Restricted Stock Units (“RSUs”) activity during the three-month period ended March 31, 2012:

 

 

 

Restricted Stock
Units

 

Weighted Average
Award Date
Fair Value

 

Outstanding at December 31, 2011

 

176,209

 

$

6.98

 

Awarded

 

13,553

 

15.62

 

Shares vested

 

(80,896

)

5.96

 

Forfeited / cancelled

 

—

 

—

 

Outstanding at March 31, 2012

 

108,866

 

$

8.77

 

 

During the three-month periods ended March 31, 2012, and 2011, the Company recorded compensation expense related to RSUs of $93,715 and $122,804, respectively.

 

At its discretion, the Company allows option and RSU holders to surrender previously owned common stock in lieu of paying the minimum statutory withholding taxes due upon the exercise of options or the vesting of RSUs.  During the three-month periods ended March 31, 2012, and 2011, 39,707and 35,930 shares were surrendered at an average market price of $16.93 and $17.78, respectively.