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9. CAPITAL STOCK

9 Months Ended

Sep. 30, 2014

Share-based Arrangements with Employees and Nonemployees [Abstract]

Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range [Table Text Block]

CAPITAL STOCK

On May 7, 2014, our shareholders approved the 2014 Omnibus Incentive Plan (the “Plan”). The Plan includes 500,000 of our common shares that may be granted under various types of awards described in the Plan. As of September 30, 2014, we were authorized to issue 427,556 shares under the plan.

Service Based Restricted Stock

During the first nine months of 2014, we issued 23,000 shares of restricted stock units to certain members of our management that will be settled in one share of common stock of the company per unit. These restricted stock units vest in increments of 25% per year over the next four years. We valued the units at a fair value of $14.57 per unit, which was the closing price of our stock on the last trading date prior to the grant date. During the three and nine month periods ended September 30, 2014, we recorded expense of $20,139 and $60,416, respectively, related to these restricted stock units.

Performance Based Restricted Stock

During the first nine months of 2014, we made available up to 23,000 shares of performance based restricted stock units to certain members of our management. Shares underlying the performance based restricted stock units will be issued upon achieving certain established EPS goals at the end of fiscal year 2015. During the three and nine month periods ended September, 30, 2014, we did not record any expense related to these restricted stock units as it is uncertain if we will reach the performance goals.

Stock Options

During the first nine months of 2014, we issued 23,000 shares of stock options to certain members of our management. These stock options vest in increments of 20% per year over the next five years. The options are exercisable at $14.57 per option, which was the closing price of our stock on the last trading date prior to the grant date. We have determined the fair value of the options to be $5.94 per option using the Black Scholes calculation. The significant assumptions utilized for the Black Scholes calculations consist of an expected life of 6.5 years, historical volatility of 52.04%, a risk free interest rate of 2.41%, a dividend yield of 2.75% and an employee forfeiture rate of 3.8%. During the three and nine month periods ended September 30, 2014, we recorded expense of $6,568 and $19,705, respectively, related to these stock options.

The following summarizes stock option transactions from January 1, 2014 through September 30, 2014:

	Shares		Weighted Average Exercise Price
Options outstanding at January 1, 2014		-	$	-
Issued		23,000	$	14.57
Exercised		-	$	-
Forfeited		-	$	-
Options outstanding at September 30, 2014		23,000	$	14.57

Options exercisable at:
January 1, 2014		-	$	-
September 30, 2014		-	$	-

Unvested options at September 30, 2014		23,000	$	14.57

During the three and nine month periods ended September 30, 2014, we issued 3,444 and 10,206 shares of common stock to members of our Board of Directors, respectively. We recorded compensation expense of $49,000 and $147,000 for the three and nine month periods ended September 30, 2014, respectively, which was the fair market value of the shares on the grant date. The shares are fully vested but cannot be sold for one year.

In June 2009, our Board of Directors adopted a Rights Agreement, which provides for one preferred share purchase right to be associated with each share of our outstanding common stock. Shareholders exercising these rights would become entitled to purchase shares of Series B Junior Participating Cumulative Preferred Stock. The rights are exercisable after the time when a person or group of persons without the approval of the Board of Directors acquire beneficial ownership of 20 percent or more of our common stock or announce the initiation of a tender or exchange offer which if successful would cause such person or group to beneficially own 20 percent or more of our common stock. Such exercise would ultimately entitle the holders of the rights to purchase at the exercise price, shares of common stock of the surviving corporation or purchaser, respectively, with an aggregate market value equal to two times the exercise price. The person or groups effecting such 20 percent acquisition or undertaking such tender offer would not be entitled to exercise any rights. The Rights Agreement was renewed in June 2012 and expires in June 2017.