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SHAREHOLDERS' EQUITY
 12 Months Ended
Dec. 31, 2014
SHAREHOLDERS' EQUITY  
SHAREHOLDERS' EQUITY

NOTE G — SHAREHOLDERS’ EQUITY

 

Net Income (Loss) Per Share

 

The following is a reconciliation of net income (loss) and weighted average common shares outstanding for purposes of calculating basic and diluted net income (loss) per share:

 

 

 

December 31,

 

 

 

2014

 

2013

 

2012

 

 

 

 

 

 

 

 

 

Numerator:

 

 

 

 

 

 

 

Net income (loss)

 

$
(9,528,330

)

$
(6,316,041

)

$
15,671,879

 

 

 

 

 

 

 

 

 

Denominator:

 

 

 

 

 

 

 

Basic - weighted average common shares outstanding

 
7,322,358

 
7,280,527

 
7,171,212

 

 

 

 

 

 

 

 

 

Effect of Dilutive Securities:

 

 

 

 

 

 

 

Stock options

 

—

 

—

 
128,246

 

 

 
7,322,358

 
7,280,527

 
7,299,458

 

 

 

 

 

 

 

 

 

Basic net income (loss) per share

 

$
(1.30

)

$
(0.87

)

$
2.19

 

Diluted net income (loss) per share

 

$
(1.30

)

$
(0.87

)

$
2.15

 

 

Outstanding options that were not included in the diluted calculation because their effect would be anti-dilutive totaled 279,756, 152,576 and 14,790 for the years ended December 31, 2014, 2013 and 2012, respectively.

 

All share and per share amounts have been adjusted to reflect 5% stock dividends paid May 14, 2013, and May 14, 2012, to shareholders of record as of April 30, 2013, and April 30, 2012 and the 1-for-3 Reverse Stock Split effected February 11, 2015.

 

Share-Based Compensation Plans

 

As of December 31, 2014, the Company had in effect a 2006 stock award plan (the “2006 Plan”).  At the June 11, 2010 Annual Meeting of Shareholders, the shareholders approved an increase of 666,667 shares of common stock for issuance under the 2006 Plan.  This increased the total aggregate number of shares of common stock under the 2006 Plan to 1,000,000 shares.  The 2006 Plan provides for the granting of stock options, common stock, and restricted stock.  The 2006 Plan is administered by a committee of the Board of Directors (the “Committee”).  Currently the Committee is comprised of three directors.  Any stock options granted under the 2006 Plan will be exercisable as set forth in the option agreements pursuant to which they are issued, but in no event will stock options be exercisable after the expiration of five (5) years from the date of grant.  Outstanding options, under the 2006 Plan at December 31, 2014, have vesting periods ranging from the date of grant to the third annual anniversary of the grant.

 

During 2014, 180,833 options were granted, and 53,654 options were exercised or canceled under the 2006 Plan.  During 2013, 39,203 options were granted, and 130,577 options were exercised or canceled under the 2006 Plan.  During 2012, 47,867 options were granted, and 81,481 options were exercised or canceled under the 2006 Plan.  Restricted stock consists of shares that are transferred by the Company to a participant, but are subject to substantial risk of forfeiture and to restrictions on their sale or other transfer by the participant.  Any restricted stock granted or issued under the 2006 Plan will vest as set forth in the restricted stock agreement pursuant to which it was issued or granted.  The provisions of the restricted stock agreements need not be the same with respect to each participant.  In November of 2011, December of 2011, January of 2012, August of 2012, February 1, 2013 and June 25, 2013, the Committee granted 8,443, 7,173, 2,000, 71,041, 2,000 and 10,000 shares of restricted stock, respectively.  On April 30, 2013, the Committee rescinded 15,000 shares of restricted stock previously granted in August of 2012.  The shares of restricted stock were issued in the names of the grantees and had restrictive legends prohibiting their sales prior to vesting.  Vesting periods, for restricted stock issued to date, range from at grant date to the third annual anniversary of the grant.  Upon vesting, a new certificate is issued for the vested portion without the restrictive legend.

 

During the years ended December 31, 2014, 2013, and 2012, the Company recognized compensation expense associated with the restricted stock of $358,678, $492,692, and $317,110, respectively.  During the years ended December 31, 2014, 2013, and 2012, no unamortized deferred stock-based compensation was related to any employee that left the Company.

 

During the years ended December 31, 2014, 2013, and 2012, the Company recognized compensation expense associated with unvested options of $259,264, $206,952, and $283,950, respectively.

 

The following table summarizes activity under the 2006 Plan:

 

 

 

 

 

Weighted

 

 

 

Shares under

 

Average

 

 

 

Option

 

exercise price

 

 

 

 

 

 

 

Balance at December 31, 2011

 
277,565

 

$
11.91

 

Granted

 
47,867

 

$
20.58

 

Exercised

 
(64,316

)

$
12.60

 

Canceled

 
(17,166

)

$
26.82

 

Balance at December 31, 2012

 
243,950

 

$
12.48

 

Granted

 
39,204

 

$
22.83

 

Exercised

 
(109,468

)

$
8.91

 

Canceled

 
(21,110

)

$
19.83

 

Balance at December 31, 2013

 
152,576

 

$
15.93

 

Granted

 
180,833

 

$
11.79

 

Exercised

 
(14,652

)

$
10.56

 

Canceled

 
(39,001

)

$
10.86

 

Balance at December 31, 2014

 
279,756

 

$
14.25

 

 

The following information applies to options outstanding and exercisable at December 31, 2014:

 

 

 

 

 

 

 

Weighted

 

 

 

 

 

 

 

 

 

average

 

 

 

 

 

 

 

 

 

remaining

 

Weighted

 

 

 

Range of

 

Number

 

contractual

 

average

 

 

 

Exercise prices

 

outstanding

 

life (in years)

 

exercise price

 

Outstanding options

 

$11.79 — $21.54

 
279,756 

 
3.93 

 

$
14.25 

 

Exercisable options

 

$11.79 — $21.54

 
133,505 

 
3.22 

 

$
16.94