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Note 5 - Share-Based Payments
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3 Months Ended | ||||||||||
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Dec. 31, 2012
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| Disclosure of Compensation Related Costs, Share-based Payments [Text Block] |
NOTE
5 – Share-Based
Payments
In
March 2008, the Company’s shareholders approved the
2008 Stock Incentive Plan which will be utilized to provide
equity opportunities and performance–based incentives
to attract, retain and motivate those persons who make (or
are expected to make) important contributions to the
Company. A total of 2 million shares are available
for issuance under this plan. As of December 31, 2012,
827,182 shares had been granted under the plan, of which
150,000 shares were in the form of stock options and the
remainder were in the form of restricted stock or other share
grants.
Stock
Options
Under
the Company’s previous share based long-term incentive
compensation plan, the 1997 Stock Option Plan, the Company
granted non-qualified stock options to
employees. There are no shares available for grant
under this plan which expired on December 31,
2006. Options issued under this plan expire 10
years after the date of grant and generally vested 1/36 per
month, with full vesting after three years. Under the
Company’s 2008 Stock Incentive Plan, options issued
expire 10 years after the date of grant and vest 1/36 per
month, with full vesting after three years. The Company did
not grant any options during the three months ended December
31, 2012 or 2011.
Compensation
expense is recognized only for share-based payments expected
to vest. The Company estimates forfeitures at the date of
grant based on historical experience and future expectations.
Stock compensation expense related to options for the three
months ended December 31, 2012 and 2011, was approximately $0
and $23,000, respectively.
No
stock options were exercised during the three months ended
December 31, 2012. During the three months ended
December 31, 2011, 193,750 stock options were exercised using
the cashless exercise option available under the plan which
entitled the holders to 116,915 shares of common
stock. The intrinsic value of the options
exercised was $510,000.
The
following table summarizes the stock options outstanding and
exercisable at December 31, 2012:
The
aggregate intrinsic value in the table above is before income
taxes, based on the closing price of the Company’s
common stock of $7.18 per share as of the last business day
of the period ended December 31, 2012. As of
December 31, 2012, the Company had no unrecognized
compensation expense relating to outstanding stock options as
all outstanding stock options were fully
vested. The deferred tax asset and realized
benefit from stock options exercised and other share-based
payments for the three months ended December 31, 2012 and
2011, was not recognized, based on the Company’s
election of the “with and without”
approach.
Restricted
Stock
The
Company issues restricted stock to employees, directors and
consultants. Such issuances may have vesting periods that
range from one to three years. In addition, the
Company has issued stock awards to certain employees that
contain vesting provisions or provide for future issuance
contingent on continued employment for periods that range
from one to three years.
The
Company granted a total of 49,750 shares of restricted stock
or shares issuable pursuant to promises to issue shares of
common stock during the three months ended December 31, 2012.
The fair value of the awards granted was approximately
$350,000. All such shares of restricted stock vest and all
such shares must be issued pursuant to promises to issue
common stock in September 2013 through November
2014, provided the grantee has not voluntarily terminated
service or been terminated for cause prior to the vesting or
issuance date. There were no shares of restricted stock
forfeited during the three months ended December 31,
2012.
The
Company granted a total of 44,750 shares of restricted stock
or shares issuable pursuant to promises to issue shares of
common stock during the three months ended December 31, 2011.
The fair value of the awards granted was approximately
$187,000. All such shares of restricted stock vest and all
such shares must be issued pursuant to promises to issue
common stock by December 2013, provided the
grantee has not voluntarily terminated service or been
terminated for cause prior to the vesting or issuance
date.
The
Company recognized share-based compensation expense for
restricted stock or promises to issue shares of common stock
of approximately $220,000 and $205,000 for the three months
ended December 31, 2012 and 2011, respectively, $57,000 and
$60,000 of which was included in accrued expenses at the
three months then ended since the related shares had not yet
been issued at December 31, 2012 and 2011,
respectively. This compensation expense was
included in operating expenses on the Unaudited Condensed
Consolidated Statement of Income for the three months ended
December 31, 2012 and 2011. As of December 31, 2012, there
was approximately $654,000, representing approximately
107,000 unvested shares, of total unrecognized compensation
cost related to non-vested restricted stock compensation
arrangements granted under the Company’s equity
compensation plans. This unrecognized cost will be recognized
over the weighted average period of the next 1 year.
Common
Stock Purchase Warrants
The
Company did not issue any common stock purchase warrants
during the three months ended December 31, 2012 or
2011. During the three months ended December 31,
2012, a warrant holder exercised 52,000 warrants using the
cashless exercise option available within the warrant
agreements which entitled the warrant holder to 43,465 shares
of common stock. There were no warrant exercises
during the three months ended December 31,
2011. As of December 31, 2012, there are no
outstanding warrants.
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