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Stock Based Compensation

6 Months Ended

Jun. 30, 2011

Stock Based Compensation

3) STOCK BASED COMPENSATION

The Company has two stock option plans, the 1992 Stock Incentive Plan (“1992 Plan”) and 2001 Stock Option Plan (“2001 Plan”). No additional grants may be made under the 1992 Plan. The 2001 Plan, which was approved by the shareholders, permits the grant of stock options and restricted stock awards for up to 900,000 shares. All stock options have an exercise price that is equal to the fair market value of the Company’s stock on the date the options were granted. Administration of the plan, including determination of the number, term, and type of options to be granted, lies with the Board of Directors or a duly authorized committee of the Board of Directors. Options are generally granted based on employee performance with vesting periods ranging from date of grant to seven years. The maximum term before expiration for all grants is ten years.

The following table presents information related to the value of outstanding stock options for the periods shown:

					Three months ended				Six months ended
					June 30, 2011				June 30, 2011

					Weighted Average Exercise				Weighted Average Exercise
					Shares		Price		Shares		Price

Outstanding at beginning of period					208,700		$ 4.12		208,700		$ 4.12
	Granted				-		-		-		-
	Exercised				-		-		-		-
	Forfeited				-		-		-		-

Outstanding at end of period					208,700		$ 4.12		208,700		$ 4.12

The Company expenses stock options on a straight-line basis over the options’ related vesting term. For the three months ended June 30, 2011 and 2010, the Company recognized pretax compensation expense related to stock options of $0 and $0, respectively and for the six months ended June 30, 2011 and 2010, the Company recognized pretax compensation expense related to stock options of $0 and $2,210, respectively.

During the six months ended June 30, 2011, there were no transactions related to stock options exercise activity.

Tabular disclosure of components of a stock option or other award plan under which equity-based compensation is awarded to employees, typically comprised of the amount of unearned compensation (deferred compensation cost), compensation expense, and changes in the quantity and fair value of the shares (or other type of equity) granted, exercised, forfeited, and issued and outstanding pertaining to that plan. Disclosure may also include nature and general terms of such arrangements that existed during the period and potential effects of those arrangements on shareholders, effect of compensation cost arising from equity-based payment arrangements on the income statement, method of estimating the fair value of the goods or services received, or the fair value of the equity instruments granted, during the period, cash flow effects resulting from equity-based payment arrangements and, for registrants that accelerate vesting of out of the money share options, reasons for the decision to accelerate.

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