Quarterly report pursuant to Section 13 or 15(d)

Note 3 - Stock-Based Compensation

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Note 3 - Stock-Based Compensation
 9 Months Ended
Sep. 30, 2012
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]
3.     STOCK-BASED COMPENSATION

Stock-based compensation expense totaled approximately $22,000 and $20,000 for the three months ended September 30, 2011 and 2012, respectively, and approximately $57,000 and $60,000 for the nine months ended September 30, 2011 and 2012, respectively.  No tax benefits were attributed to the share-based compensation because a valuation allowance was maintained for substantially all net deferred tax assets.

The following table summarizes the Company’s restricted stock activity:

   
Shares
   
Wtd. Avg. Price at Date of Issuance
 
       
Outstanding at December 31, 2011
    473,688     $ 0.37  
Granted
    –       –  
Vested
    (160,362 )     0.36  
Forfeited
    –       –  
Outstanding at September 30, 2012
    313,326       0.37  

As of September 30, 2012, total unrecognized stock-based compensation expense related to non-vested restricted stock was approximately $117,000, which is expected to be recognized over a weighted-average period of 1.5 years.

On August 13, 2012, the Company’s board of directors authorized the Company, acting as trustee for certain of its employees, to execute a Rule 10b5-1 plan to purchase 100,000 shares of its common stock in accordance with guidelines specified under Rule 10b5-1 of the Securities Exchange Act of 1934 and the Company's policies regarding stock transactions.  The Company may terminate the plan at any time.  The employees will receive the stock as incentive compensation in quarterly increments over three years beginning March 15, 2013, provided that they are employees of the Company on the date of the distribution.  Any common stock that is forfeited by an employee whose employment terminates will be delivered to the Company and held as treasury stock.  The grant-date fair value for each award was $1.37 per share.  As of September 30, 2012, total unrecognized stock-based compensation related to these awards is $132,000, which is expected to be recognized quarterly over the three year vesting period.