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Stock-Based Compensation
 12 Months Ended
Dec. 31, 2012
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock-Based Compensation
Stock-Based Compensation

Stock Option Plan


Our 1998 Stock Option Plan (the "Plan"), which is stockholder approved, permits the grant of stock options to its employees for up to 550,000 shares of common stock.  On June 16, 2009, at our annual meeting of shareholders, our shareholders approved a proposed amendment to the Plan to add additional 200,000 shares of common stock to the Plan, thereby authorizing the issuance of up to 750,000 shares of common stock under the Plan.  We believe that such awards better align the interests of our employees with our stockholders.  Option awards are generally granted with an exercise price equal to the market price of our stock at the date of grant; those option awards generally vest based on three years of continuous service and have ten-year contractual terms.  Certain option and share awards provide for accelerated vesting if there is a change in control of the Company (as defined in the Plan).  The last date that grants can be made under the Plan is March 1, 2016.  As of December 31, 2012, 280,503 shares were still available for issue under the Plan.


The fair value of each option award is estimated on the date of grant using the Black-Scholes option valuation model that uses the assumptions noted in the following table.  The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.  The expected life of options granted is based on the vesting period and historical exercise and post-vesting employment termination behavior for similar grants.  We use historical data to estimate option exercise and employee termination within the valuation model; separate groups of employees that have similar historical exercise behavior are considered separately for valuation purposes.

Weighted average Black -Scholes fair value assumption
2012
 
 
2011
 
2010
Risk free rate
0.98

%
 
2.09

%
 
1.22

%
Expected life
6 years

 
 
5 years
 
 
2 years
 
Expected volatility
62.37

%
 
64.89

%
 
64.32

%
Expected dividend yield
—

 
 
—

 
 
—

 


A summary of all option activity as of December 31, 2012 and changes during the year then ended is presented below.

 
Number
 of
Stock Options
 
Weighted Average
Exercise
 Price
 
Weighted
Average
Remaining
Contractual Life (years)
 
Aggregate
Intrinsic
Value
(in thousands)
Outstanding, December 31, 2011
422,239

 
$
15.06

 
6.48
 
$
766

Granted
20,000

 
14.89

 

 
 
Exercised
(22,500
)
 
7.47

 

 
151

Canceled/Forfeited
(17,917
)
 
18.40

 

 
 
Expired
(7,500
)
 
16.82

 

 
 
Outstanding, December 31, 2012
394,322

 
$
15.30

 
5.79
 
$
910

Exercisable, December 31, 2012
344,988

 
$
15.06

 
5.44
 
$
878



We granted an option to purchase 20,000 shares to non-executive employees on January 25, 2012 at an exercise price of $14.89 with a three year vesting period.
 
The weighted average grant date fair value of options granted during the years 2012, 2011, and 2010 was $8.22, $10.00, and $7.30 respectively.  The total intrinsic value, or the difference between the exercise price and the market price on the date of exercise, of options exercised during the years ended December 31, 2012, 2011,and 2010 was approximately $151,000, $127,000, and $400,000 respectively.  Cash received from stock options exercised during the years ended December 31, 2012, 2011, and 2010 was $180,000, $123,000, and $407,000, respectively.



The following table summarizes information about our stock options outstanding at December 31, 2012:

 
Range of Exercise Prices
 
Options Outstanding
 
Options Exercisable
 
Shares
 
Weighted
Average
Remaining
Contractual
Life (years)
 
Weighted
Average
Exercise
Price
 
Shares
 
Weighted
Average
Exercise
Price
$5.59-9.43
 
79,239

 
3.96
 
$
8.61

 
79,239

 
$
8.61

$9.44-15.60
 
81,500

 
6.02
 
12.89

 
61,500

 
12.22

$15.61-20.48
 
233,583

 
6.34
 
18.42

 
204,249

 
18.42

$0.00-20.48
 
394,322

 
5.79
 
$
15.30

 
344,988

 
$
15.06




The summary of the status of our unvested stock options as of December 31, 2012 and changes during the year then ended is presented below.

 
 
 
Unvested stock options:
Shares
 
Weighted Average
Grant Date Fair Value
Unvested at December 31, 2011 
78,666

 
$
8.82

Granted
20,000

 
$
8.22

Vested
(47,082
)
 
$
8.36

Cancelled/Forfeited
(2,250
)
 
$
8.98

Unvested at December 31, 2012
49,334

 
$
9.01



We recognized stock compensation expense from stock options vesting of $440,000, $461,000, and $804,000 respectively, for the years ended December 31, 2012, 2011 and 2010.  The total income tax benefit recognized in the income statement for stock based compensation was $264,000, $148,000 and $137,000, respectively, for the years ended December 31, 2012, 2011 and 2010. As of December 31, 2012, there was approximately $200,000 of total unamortized compensation cost related to unvested stock options.  We expect to recognize such cost over a weighted-average period of 1.6 years.  There was no income tax benefit realized for the tax deductions from stock options exercised for the years ending 2012, 2011 and 2010 due to utilization of net operating loss carryforwards.