Stock-Based Compensation

6 Months Ended

Jun. 30, 2011

Stock-Based Compensation

Stock-Based Compensation

7.     Stock-Based Compensation

Our share-based incentive plans permit us to grant restricted stock units, restricted stock, incentive or non-qualified stock options, and certain other instruments to employees, directors, consultants and advisors of the Company.   Certain stock options and restricted stock units vest in accordance with the achievement of specific Company objectives. The exercise price of options granted under the plan must be at least equal to the fair market value of our common stock on the date of grant. All options granted vest at a rate determined by the Nominating and Compensation Committee of our Board of Directors and are exercisable for varying periods, not to exceed ten years.  Shares issued under the plans upon option exercise or stock unit conversion are generally issued from authorized, but previously unissued shares. 

As of June 30, 2011, approximately 4,625,032 shares of common stock were available for grant under our current plan.  We are authorized to issue up to approximately 12,684,667 plan equivalent shares of common stock in relation to stock options or restricted shares outstanding or available for grant under the plans. 

Stock Options

The number and weighted average exercise price of stock options outstanding are as follows:

	Shares Under	Weighted Average Price
	Stock Options	Per Share
OUTSTANDING AT DECEMBER 31, 2010	8,283,586	$     2.94
Granted at market price	-	$           -
Exercised	(52,500)	$     0.66
Expired or forfeited	(184,163)	$   7.41
OUTSTANDING AT JUNE 30, 2011	8,046,923	$     1.84

The following table summarizes information about stock options outstanding at June 30, 2011:

Options Outstanding						Options Exercisable
Range of Exercise Price			Options Outstanding	Weighted Average Exercise Price	Weighted Average Remaining Contractual Life		Options Exercisable	Weighted Average Exercise Price Per Share
$0.66	-	$0.66	4,865,881	$0.66	7.05		1,300,181	$0.66
$1.49	-	$1.55	1,010,666	1.55	1.25		1,010,666	1.55
$1.62	-	$2.89	1,140,195	2.33	3.21		1,140,195	2.33
$3.19	-	$6.88	764,277	6.33	2.99		764,277	6.33
$7.10	-	$9.67	240,904	9.28	4.13		240,904	9.28
$10.51	-	$10.51	25,000	10.51	4.09		25,000	10.51
			8,046,923	$1.84			4,481,223	$2.77

A total of 3,565,700 stock options with a weighted average exercise price of $0.66 were outstanding at June 30, 2011 and had not vested.  There were no stock options granted during the six months ended June 30, 2011 or 2010.  

The total intrinsic value of options exercised (i.e., the difference between the market price on the exercise date and the price paid by the employee to exercise the options) during the six months ended June 30, 2011 and 2010 was $76,000 and $197,000, respectively.   The total amount of cash received in 2011 and 2010 by the Company from the exercise of these options was $35,000 and $82,000, respectively.   As of June 30, 2011, there was $3,941,000 intrinisic value of stock options that were fully vested or were expected to vest.  The remaining weighted average contractual term for options exercisable is approximately 4.02 years.  In addition, as of June 30, 2011 unrecognized compensation cost related to non-vested stock options was $75,000, which will be fully amortized using the straight-line basis over the remaining vesting period of the options, which will be fully amortized upon vesting  of the options, which is expected to occur in 2011.    

Non-cash compensation cost related to stock and stock options and restricted stock recognized during the six months ended June 30, 2011 and 2010 was $459,000 and $1,026,000, respectively. 

Restricted Stock

We also grant common stock and restricted common stock units to employees.  These awards are recorded at their fair values on the date of grant and compensation cost is recorded using graded vesting over the expected term.  The weighted average grant date fair value of common stock and restricted stock units granted during the six months ended June 30, 2011 and 2010 was $2.21 and $2.59 per share (total grant date fair value of $436,000 and $379,000), respectively.  As of June 30, 2011, the aggregrate intrinsic value of restricted stock units that are expected to vest was approximately $1,463,000.  In addition, as of June 30, 2011, unrecognized compensation cost related to non-vested restricted stock units was $22,000,  which is expected to be recognized in 2011.  The total fair value of restricted stock units vested during the six months ended June 30, 2011 and 2010 was $499,000 and $420,000, respectively. 

The following table reflects restricted stock unit activity for the six months ended June 30, 2011. 

	Shares / Units	Weighted-Average Grant Date Fair Value
NONVESTED AT DECEMBER 31, 2010	1,055,212	$  0.41
Granted	196,977	$  2.21
Vested	(204,477)	$  2.44
Forfeited	-	$        -
NONVESTED AT JUNE 30, 2011	1,047,712	$  0.35