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STOCK-BASED COMPENSATION
 6 Months Ended
Jun. 30, 2012
STOCK-BASED COMPENSATION [Abstract]  
STOCK-BASED COMPENSATION
2.
STOCK-BASED COMPENSATION

The Company accounts for compensation expense associated with stock options based on the fair value of the options on the date of grant.

The Company's net income for both the three and six months ended June 30, 2012 includes approximately $383,000 of non-cash compensation expense related to the Company's stock options.  The Company's net income for the three and six months ended June 30, 2011 includes approximately $655,000 and $942,000, respectively, of non-cash compensation expense related to the Company's stock options.  The non-cash compensation expense related to all of the Company's stock-based compensation arrangements is recorded as a component of selling, general and administrative expenses.

The estimated fair value of each option award granted was determined on the date of grant using the Black-Scholes option valuation model.  The following weighted-average assumptions were used for the options granted during the three and six months ended June 30, 2012 and 2011:
 
   
2012
  
2011
 
Risk-free interest rate
  0.9%  2.1%
          
Expected volatility
  102%  101%
          
Dividend yield
  0%  0%
Expected option term
 
5 years
  
5 years
 
 
A summary of the status of the Company's stock option plans as of June 30, 2012 and changes during the six months ended June 30, 2012 is as follows:

  
Options
  
Weighted average
Exercise Price
 
Weighted average remaining
contractual term (in years)
 
Aggregate Intrinsic Value
 
Outstanding at beginning of period
  695,000  $6.68       
Granted
  40,517   11.87       
Exercised
  (205,000)  6.65       
               
Outstanding and vested at end of period
  530,517  $9.25 
3.13
 $1,285,746 
 
Options to acquire 40,517 shares of common stock were granted on January 1, 2012 to members of our board of directors as part of their normal compensation.

During the six months ended June 30, 2012, 170,000 stock options were exercised for cash resulting in proceeds to the Company of $1,121,700.  During the same period an additional 10,000 options were exercised, pursuant to provisions of the stock option plan, where the Company received no cash and 4,589 shares of its common stock in exchange for the 10,000 shares issued in the exercise.  The 4,589 shares that the Company received were valued at $69,095, the fair market value of the shares on the date of exercise.  Lastly, an additional 25,000 options were exercised, pursuant to provisions of the stock option plan, for a combination of cash and common shares.  The Company received $102,815 in cash and 4,333 shares in exchange for the 25,000 shares issued in this exercise.  The 4,333 shares that the Company received were valued at $69,930, the fair market value of the shares on the date of exercise.

The intrinsic value of all options exercised during the six months ended June 30, 2012 and 2011 was approximately $1,252,950 and $1,514,000, respectively.