STOCKHOLDERS' EQUITY

12 Months Ended

Dec. 31, 2013

STOCKHOLDERS' EQUITY [Abstract]

STOCKHOLDERS' EQUITY

10. STOCKHOLDERS’ EQUITY

Stock Option Plans

In July 1997, the Company's stockholders approved a stock option plan (the “1997 Plan”) for eligible key employees, directors, independent agents, and consultants who make a significant contribution toward the Company's success and development and to attract and retain qualified employees which expired in July 2007. Under the 1997 Plan, qualified incentive stock options and non-qualified stock options may be granted to purchase up to an aggregate of 500,000 shares of the Company's common stock, subject to certain anti-dilution provisions. The exercise price per share of common stock may not be less than 100% (110% for qualified incentive stock options granted to stockholders owning at least 10% of common shares) of the fair market value of the Company's common stock on the date of grant. In general, the options vest and become exercisable in four equal annual installments following the date of grant, although the Company’s board of directors, at its discretion, may provide for different vesting schedules. The options expire ten years (five years for qualified incentive stock options granted to stockholders owning at least 10% of common shares) after such date. The Company filed with the Securities and Exchange Commission a Registration Statement on Form S-8 for the 1997 Plan on September 26, 1997 to register these securities. In accordance with terms of the 1997 Plan, no options were granted ten years after the effective date of the 1997 Plan, or July 2007. In July 2007, approximately 231,000 stock options expired unissued, and there are no shares available for grant remaining under the 1997 Plan.  As of December 31, 2012 there were zero options outstanding under the 1997 Plan.

In August 2001, the Company's stockholders approved a stock option plan (the “2001 Plan”), with terms similar to the 1997 Plan. The 2001 Plan authorizes the granting of awards of up to an aggregate of 750,000 shares of the Company's common stock, subject to certain anti-dilution provisions. On December 16, 2003, stockholders approved an amendment to the 2001 Plan, which increased the number of shares authorized for grant from 750,000 shares to 1,750,000 shares, an increase of 1,000,000 shares. On June 17, 2009, our stockholders approved an amendment to the 2001 Plan to extend the term of the 2001 Plan from April 6, 2011 to April 23, 2019 and to authorize an additional 300,000 shares of our common stock for issuance under the 2001 Plan.  A total of 2,050,000 shares of common stock are now authorized for issuance under the amended 2001 Plan.  The Company filed with the Securities and Exchange Commission a Registration Statement on Form S-8 for the 2001 Plan on October 5, 2007 and on July 15, 2009 as amended to register these securities. As of December 31, 2013 options to purchase 1,167,000 shares of common stock were outstanding under the 1997 Plan and 2001 Plan, and a total of 239,098 shares remain available for grant under the 2001 Plan.

The following table presents the assumptions used to estimate the fair values of the stock options granted in the periods presented:

	September 2013			April 2013			May 2012
Risk-free interest rate		1.73	%		0.68	%		0.69	%
Expected volatility		33	%		37	%		54	%
Expected life (in years)		5			5			5
Dividend yield		-			-			-
Weighted-average estimated fair value of options granted during the year	$	85,000		$	79,000		$	110,000

The summary of the stock options activity is as follows for year ended:

	Shares			Weighted Average Exercise Price
Outstanding at December 31, 2012		1,182,000		$	8.90
December 31, 2013
Options granted		30,000		$	16.88
Options exercised		(30,000	)		1.00
Options canceled or expired		15,000			30.79
Outstanding at end of year		1,167,000			9.03
Options exercisable at year end		1,132,000			8.55
Shares available for future grant		239,098			--

The following table summarizes information relating to stock options by exercise price at December 31, 2013:

		Outstanding Shares						Exercisable Shares
Option Exercise Price		Number of Shares		Weighted Average Life  (years)		Weighted  Average  Exercise  Price		Number of Shares		Weighted  Average Option Price
$	0.83 - 2.00		467,500		2.10	$	1.01		467,500	$	1.01
	4.00 - 6.00		242,000		3.41		4.69		242,000		4.69
	13.00 - 16.00		155,000		5.24		13.96		155,000		13.96
	17.00 - 19.00		85,000		5.77		17.73		70,000		17.69
	20.00 - 21.00		112,500		4.75		20.57		112,500		20.57
	26.00 - 30.00		105,000		5.82		28.02		85,000		27.74
			1,167,000		3.72	$	9.03		1,132,000	$	8.55

We granted 30,000 stock options during 2013. The weighted-average grant-date fair value for options granted during 2013 was $16.88 per share. During the 2013, 2012 and 2011, $30,000, $148,425and $82,450 were received from stock options exercised by employees, respectively. The aggregate intrinsic value of options outstanding and exercisable as of December 31, 2013 was approximately $14.8 million. Aggregate intrinsic value represents the total pre-tax intrinsic value, based on the closing price of our common stock of $21.67 on December 31, 2013, which would have been received by the option holders had all option holders exercised their options as of that date. Total unrecognized compensation cost related to non-vested stock options outstanding as of December 31, 2013 was approximately $79,000 which we expect to recognize over a weighted-average period of 3.75 years.