EMPLOYEE STOCK PLANS

12 Months Ended

Dec. 31, 2011

EMPLOYEE STOCK PLANS [Abstract]

EMPLOYEE STOCK PLANS

14. EMPLOYEE STOCK PLANS

In May of 2007, our shareholders approved the 2007 Omnibus Incentive Compensation Plan to provide incentives and awards for directors, officers, and employees. “Awards” as defined in the Plan includes, with limitations, stock options (including restricted stock options), restricted stock awards, stock appreciation rights, performance shares, stock awards and cash awards, all on a stand-alone, combination, or tandem basis. The 2007 Omnibus Incentive Compensation Plan replaces the 1997 Stock Incentive Plan, which expired February of 2007.  A total of 525,000 of our common shares outstanding can be granted under the Plan.

Stock Options – The 35,100 options outstanding at December 31, 2011 were issued under the 1997 Stock Incentive Plan and are incentive stock options with a term of ten years, vesting 20% each year on the anniversary date of the grant.  The following table summarizes activity relating to stock options:

	Options			Weighted Average  Exercise Price		Weighted Average  Remaining Contractual Term		Aggregate Intrinsic Value
Outstanding at December 31, 2010		53,918		$	12.86		2.64
Exercised		(10,240	)		6.60
Forfeited		(8,578	)		15.39
Outstanding at December 31, 2011		35,100		$	14.07		1.86	$	-
Exercisable at December 31, 2011		35,100		$	14.07		1.86	$	-

As of December 31, 2011, there was no unrecognized compensation cost related to non-vested share-based compensation arrangements.  The total amount of options expensed during the years ended December 31, 2011, 2010 and 2009 was $13,000, $6,000 and $20,000, respectively.

The fair value of each option granted is estimated on the grant date using the Black-Scholes Option Pricing Model.  This model requires management to make certain assumptions, including the expected life of the option, the risk free rate of interest, the expected volatility, and the expected dividend yield.  The risk free rate of interest is based on the yield of a U.S. Treasury security with a similar term.  The expected volatility is based on historic volatility over a term similar to the expected life of the options.  The dividend yield is based on the current yield at the date of grant.

The total intrinsic value of the options exercised was $66,000, $57,000, and $0 for the years ended December 31, 2011, 2010, and 2009, respectively.

Restricted Stock Awards – On June 30, 2010, the Compensation Committee (formerly the Personnel Committee) of the Board of Directors of the Company made grants of 22,047 shares of restricted stock under the Company's 2007 Omnibus Incentive Compensation Plan to certain officers and employees of the Company.  The restricted shares of stock, which are subject to the terms of a Restricted Stock Grant Agreement between the Company and each recipient, will fully vest on the third anniversary of the grant date.  Prior to vesting, the recipient will be entitled to vote the shares and receive dividends, if any, declared by the Company with respect to its common stock.  Compensation expense for restricted stock is based on the fair value of the restricted stock awards at the time of the grant, which is equal to the market value of the Company's common stock on the date of grant.  The value of restricted stock grants that are expected to vest is amortized monthly into compensation expense over the three year vesting period.

The restricted shares had a fair value of $12.77 per share on the date of issuance.  For the year ended December 31, 2011 and 2010, compensation expense of $62,000 and $44,000, respectively, was recognized related to non-vested restricted stock awards.  As of December 31, 2011, there was $106,000 of unrecognized compensation cost related to non-vested restricted stock awards granted under the plan.

The following table summarizes activity relating to non-vested restricted stock awards:

	2011
Balance at beginning of year		20,847
Granted		-
Forfeited		(4,202	)
Vested		-
Balance at end of year		16,645