Stock Based Compensation

6 Months Ended

Jun. 30, 2011

Stock Based Compensation [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Stock-Based Compensation

The Company’s 2009 Incentive Compensation Plan (the “2009 Plan”) permits the grant of options and restricted stock to employees, directors and consultants. The total number of shares currently reserved for grants under the 2009 Plan is 800,000. Restricted stock grants under the Plan may not exceed 200,000 shares in the aggregate. The number of shares available for issuance under the 2009 Plan is reduced by the sum of the number of shares (a) issued upon exercise of options granted pursuant to the Company’s 1999 Stock Option Plan (the “1999 Plan”) and (b) issuable upon exercise of outstanding options granted under the 1999 Plan. As options granted under the 1999 Plan are forfeited or terminated, the number of options available for grant under the 2009 Plan increase (but may not exceed 800,000 in the aggregate). Restricted stock grants under the 1999 Plan have no impact on the availability of restricted stock grants under the 2009 Plan.

As of June 30, 2011, 393,068 options were outstanding, of which 373,068 and 20,000 had been granted under our 1999 and 2009 Plans, respectively, and of which 346,901 are currently exercisable. In February 2011, the Company granted 5,000 options. These options vest one-third each year commencing one year from date of grant. The exercise price of the grant is $2.37 per share. In addition, restricted stock grants outstanding as of June 30, 2011 totaled 128,333, none of which had vested. Of these outstanding restricted stock grants, 72,500 were made under the 1999 Plan. In March 2011, the Company’s Compensation Committee granted certain employees and board members a total of 55,833 shares of restricted stock vesting over various periods, not to exceed four years from date of grant. The value of the shares at the date of grant was $2.34. As of June 30, 2011, 167,711 shares are available under the 2009 Plan, of which 144,167 shares are available for stock grants. All stock options granted under the 2009 Plan are granted with an exercise price equal to or greater than the fair market value of the Common Stock at the grant date. Employee and director stock options generally expire 10 years from the grant date and have various vesting periods. Restricted stock awards generally vest over a period of three to five years. Unvested shares and options are subject to forfeiture unless certain time and/or performance requirements are satisfied.

Current accounting standards permit the use of a valuation model to calculate the fair value of stock-based awards. The Company has elected to use the Black-Scholes-Merton (BSM) option-pricing model, which incorporates various assumptions including volatility, expected life, interest rates and dividend yields. The expected volatility is based on the historic volatility of the Common Stock over the most recent period commensurate with the estimated expected life of the Company’s stock options, adjusted for the impact of unusual fluctuations not reasonably expected to recur. The expected life of an award is based on historical experience and on the terms and conditions of the stock awards granted to employees and directors. The Company has recorded stock-based compensation expense of $61,000 and $97,000 for the six-month period ended June 30, 2011 and 2010, respectively, and $34,000 and $49,000 for the three-month periods ended June 30, 2011 and 2010 respectively.

As previously noted, the Company granted 5,000 options in February 2011. These options had a fair value of $0.91 per share.

The assumptions used for the six-month period ended June 30, 2011, and the resulting estimates of weighted-average fair value of options granted during those periods are as follows:

Expected life (years)	5.0
Risk-free interest rate	2.3		%
Volatility	40.0		%
Dividend yields	—
Weighted-average fair value of options during the period	$	0.91

The following table represents our stock options granted, exercised and forfeited for the six months ended June 30, 2011:

Stock Options	Number of Shares		Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term
Oustanding January 1, 2011	409,798		$	4.37	3.47
Granted	5,000		$	2.37	9.67
Exercised	—		—		—
Forfeited/expired	(21,730	)	$	5.27	7.38
Outstanding at June 30, 2011	393,068		$	4.30	3.39
Exercisable at June 30, 2011	346,901		$	4.40	2.83