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SHAREHOLDERS' EQUITY
12 Months Ended
Dec. 31, 2012
SHAREHOLDERS' EQUITY  
SHAREHOLDERS' EQUITY

NOTE G — SHAREHOLDERS’ EQUITY

 

Income (loss) Per Share

 

The following is a reconciliation of net income (loss) and weighted average common shares outstanding for purposes of calculating basic and diluted net income (loss) per share:

 

 

 

December 31,

 

 

 

2012

 

2011

 

2010

 

 

 

 

 

 

 

 

 

Numerator:

 

 

 

 

 

 

 

Net income (loss)

 

$

15,671,879

 

$

10,833,215

 

$

(1,222,682

)

 

 

 

 

 

 

 

 

Denominator:

 

 

 

 

 

 

 

Basic - weighted average common shares outstanding

 

20,489,179

 

20,205,524

 

20,162,944

 

Effect of Dilutive Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock options

 

366,417

 

317,063

 

 

 

 

20,855,596

 

20,522,587

 

20,162,944

 

 

 

 

 

 

 

 

 

Basic net income (loss) per share

 

$

0.76

 

$

0.54

 

$

(0.06

)

Diluted net income (loss) per share

 

$

0.75

 

$

0.53

 

$

(0.06

)

 

Outstanding options that were not included in the diluted calculation because their effect would be anti-dilutive. Totals were 44,370 and 161,835 for the years ended December 31, 2012 and 2011, respectively.

 

All share and per share amounts have been adjusted to reflect 5% stock dividends paid May 14, 2012 and May 14, 2010, to shareholders of record as of April 30, 2012 and April 30, 2010.

 

Share-Based Compensation Plans

 

The Company currently has in effect a 2006 stock award plan (the “2006 Plan”).  At the June 11, 2010 Annual Meeting of Shareholders, the shareholders approved an increase of 2,000,000 shares of common stock for issuance under the 2006 Plan.  This increased the total aggregate number of shares of common stock under the 2006 Plan to 3,000,000 shares.  The 2006 Plan provides for the granting of stock options, common stock, and restricted stock.  The 2006 Plan is administered by a committee of the Board of Directors (“the Committee”).  Currently the Committee is comprised of three directors.  Any stock options granted under the 2006 Plan will be exercisable as set forth in the option agreements pursuant to which they are issued, but in no event will stock options be exercisable after the expiration of five (5) years from the date of grant.  Outstanding options, under the 2006 Plan at December 31, 2012, have vesting periods ranging from the date of grant to the third annual anniversary of the grant.

 

During 2012, 93,750 options were granted and 192,949 options were exercised or cancelled under the 2006 Plan.  During 2011, 99,185 options were granted and 80,334 options were exercised or cancelled under the 2006 Plan.  During 2010, no options were granted and 3,308 options were canceled under the 2006 Plan.  Restricted stock consists of shares that are transferred by the Company to a participant, but are subject to substantial risk of forfeiture and to restrictions on their sale or other transfer by the participant.  Any restricted stock granted or issued under the 2006 Plan will vest as set forth in the restricted stock agreement pursuant to which it was issued or granted.  The provisions of the restricted stock agreements need not be the same with respect to each participant.  In May of 2010, November of 2011, December of 2011, January of 2012, and August of 2012, the Committee granted 5,000, 25,331, 21,520, 6,000 and 213,125 shares of restricted stock, respectively.  The shares of restricted stock were issued in the names of the grantees and had restrictive legends prohibiting their sales prior to vesting.  Vesting periods, for restricted stock issued to date, range from at grant date to the third annual anniversary of the grant.  Upon vesting, a new certificate is issued for the vested portion without the restrictive legend.

 

During the years ended December 31, 2012, 2011, and 2010, the Company recognized compensation expense associated with the restricted stock of $317,109, $28,603, and $86,230, respectively.  During the years ended December 31, 2012, 2011, and 2010, no unamortized deferred stock-based compensation was related to any employee that left the Company.

 

During the years ended December 31, 2012, 2011, and 2010, the Company recognized compensation expense associated with unvested options of $283,950, $230,167, and $422,024, respectively.

 

The following table summarizes activity under the Plans:

 

 

 

 

 

Weighted

 

 

 

Shares under

 

Average

 

 

 

Option

 

exercise price

 

 

 

 

 

 

 

Balance at December 31, 2009

 

875,039

 

$

3.69

 

Granted

 

 

$

 

Exercised

 

 

$

 

Canceled

 

(87,366

)

$

4.27

 

Balance at December 31, 2010

 

787,673

 

$

3.63

 

Granted

 

104,145

 

$

6.07

 

Exercised

 

(59,334

)

$

3.06

 

Canceled

 

(21,000

)

$

4.10

 

Balance at December 31, 2011

 

811,484

 

$

3.97

 

Granted

 

138,120

 

$

7.13

 

Exercised

 

(192,949

)

$

4.20

 

Canceled

 

(51,496

)

$

8.94

 

Balance at December 31, 2012

 

705,159

 

$

4.16

 

 

The following information applies to options outstanding and exercisable at December 31, 2012:

 

 

 

 

 

 

 

Weighted

 

 

 

 

 

 

 

 

 

average

 

 

 

 

 

 

 

 

 

remaining

 

Weighted

 

 

 

Range of

 

Number

 

contractual

 

average

 

 

 

Exercise prices

 

outstanding

 

life (in years)

 

exercise price

 

Outstanding options

 

$2.80 – $9.87

 

705,159

 

2.06

 

$

4.16

 

Exercisable options

 

$2.80 – $9.87

 

653,034

 

1.86

 

$

4.02