11. Stock Options, Incentive Plans, Stock Awards, and Employee Benefit Plan

12 Months Ended

Dec. 31, 2012

Equity [Abstract]

11. Stock Options, Incentive Plans, Stock Awards, and Employee Benefit Plan

Note 11. Stock Options, Incentive Plans, Stock Awards, and Employee Benefit Plan

Stock Option Plans: The Company’s 1999 Employee Comprehensive Stock Plan ("Employee Plan") provides qualified incentive stock options (“ISOs”) and non-qualified stock options (“NQSOs”) as well as restricted stock grants to key employees. Under the terms of the Employee Plan, the exercise price of ISOs must be equal to 100% of the fair market value on the date of grant (or 110% of fair market value in the case of an ISO granted to a 10% stockholder/grantee). There is no price requirement for NQSOs, other than that the option price must exceed the par value of the common stock. The Company reserved 30,000,000 shares of its common stock for issuance pursuant to the Employee Plan. The Employee Plan terminated in 2010.

The 1999 Non-Employee Director Plan ("Director Plan") was approved by the Board of Directors and stockholders to provide non-employee directors options to purchase shares of common stock at 100% of fair market value on the date of grant. The Company reserved 1,500,000 shares of its common stock for issuance pursuant to the Director Plan. The Director Plan terminated in 2010.

The Company currently has no active stock option or incentive plan under which options or shares may be issued. Options issued under the now terminated Plans remain in effect according to the terms set on the day each option was respectively issued. No options were exercised in 2012 or 2011. A summary of option activity is as follows:

Options	Shares			Weighted Average Exercise Price		Weighted Average Contractual Remaining Life		Aggregate Intrinsic Value
Outstanding, December 31, 2011		2,998,921		$	0.11
Granted		-			-
Vested		-			-
Forfeited		(114,500	)	$	0.18
Outstanding, December 31, 2012		2,884,421		$	0.11		1.97	$	78,038
Expected to Vest After December 31, 2012		2,884,421		$	0.11		1.97	$	78,038

Stock Awards: The Company has granted restricted stock awards to its employees at different periods from 2005 through 2012. The shares granted to those employees vest at 10 years from the grant date, and are forfeited in the event that the recipient’s employment relationship with the Company is terminated prior to vesting. The fair value of the restricted stock award granted to the Company’s employees is amortized to expense on a straight-line basis over the vesting period of the restricted stock award. Restricted stock awards are issued and reported as outstanding in the financial statements for 2012 and 2011 as of the date that the physical shares were issued to the employee by the Company’s transfer agent. Stock based compensation expense related to stock options and restricted stock awards was $251,830 for 2012 and $348,768 for 2011. The following table presents a summary of the Company’s restricted stock awards outstanding at December 31, 2012:

Stock Awards	Shares		Weighted Average Exercise Price		Weighted Average Contractual Remaining Life		Aggregate Intrinsic Value
Outstanding, December 31, 2011		40,681,301	$	0.07
Granted		5,000,000	$	0.11
Vested		-		-
Forfeited		-		-
Outstanding, December 31, 2012		45,681,301	$	0.08		4.96	$	-
Expected to Vest After December 31, 2012		45,681,301	$	0.08		4.96	$	-

As of December 31, 2012, there was approximately $1,580,000 of total unrecognized compensation costs related to the unvested share-based compensation arrangements granted. The cost is expected to be recognized over the weighted average remaining contractual life of 4.96 years.

Employee Stock Purchase Plan: The Company established the 1999 Employee Stock Purchase Plan ("ESPP") under the requirements of Section 423 of the Internal Revenue Code (the "Code") to allow eligible employees to purchase the Company’s common stock at regular intervals. Participating employees may purchase common stock through voluntary payroll deductions at the end of each participation period at a purchase price equal to 85% of the lower of the fair market value of the common stock at the beginning or the end of the participation period. Common stock reserved for future employee purchases under the plan aggregated 755,828 shares at December 31, 2012. No shares were issued pursuant to the ESPP in 2012 or 2011.

401(k) Plan: The Company has a defined contribution plan (the "401(k) Plan") pursuant to Section 401(k) of the Code. All eligible full and part-time employees of the Company who meet certain age requirements may participate in the 401(k) Plan. Participants may contribute between 1% and 15% of their pre-tax compensation, but not in excess of the maximum allowable under the Code. The 401(k) Plan allows for discretionary and matching contributions by the Company. The Company did not make any matching contributions in 2012 or 2011.