Stock-Based Compensation

3 Months Ended

Mar. 31, 2014

NOTE 8 – STOCK-BASED COMPENSATION

We currently have stock-based compensation plans in place for our directors, officers, employees, consultants and advisors. Under the terms of these plans we may grant restricted shares and stock options for the purchase of our common stock. The stock-based compensation is granted under terms determined by our Compensation Committee. Our standard stock option grants have a maximum term of 10 years, generally vest over periods ranging between one and four years, and are granted with an exercise price equal to the fair market value of the common stock on the date of grant. Restricted stock is valued at the market value of the common stock on the date of grant and generally vests over periods of two to seven years. All dividends paid on restricted stock, whether vested or unvested, are granted to the shareholder.

Information regarding our stock option plans for the three months ended March 31, 2014 is as follows:



			Weighted
			Average	Weighted
			Exercise	Average	Aggregate
	Number of		Price per	Contractual	Intrinsic
	Shares		Share	Term	Value

Options outstanding, beginning of year	32,749	$	14.31
Options expired	(14,090)		14.67
Options outstanding, end of quarter	18,659	$	14.03	1.0	-
Options exercisable, end of quarter	18,659	$	14.03	1.0	-
Option price range at end of quarter	$8.99 to $16.45
Option price range for exercisable shares	$8.99 to $16.45

The summary of changes in unvested restricted stock awards for the three months ended March 31, 2014, is as follows:


			Weighted
			Average
	Number of		Grant Date
	Shares		Fair Value

Unvested restricted stock, beginning of year	125,922	$	4.98
Granted	29,043		8.77
Forfeited	(300)		5.66
Vested	(32,877)		4.98
Unvested restricted stock, end of period	121,788	$	5.89

Total stock based compensation related to restricted stock awards was $80 thousand and $54 thousand for the three months ended March 31, 2014 and 2013, respectively.

At March 31, 2014, unrecognized compensation expense for non-vested restricted stock was $613 thousand, which is expected to be recognized over an average period of 2.3 years.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

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