Stock Options

6 Months Ended

Jun. 30, 2011

Stock Options

Stock Options

7. Stock Options

During the first six months of 2011, the Company granted stock options to certain employees, directors and consultants for an aggregate of 0.9 million shares (2010 — 0.7 million) of common stock at an exercise price of $7.10 (2010 - $2.51) per share.  The options vest equally over a three year period if the individual remains affiliated with the Company (subject to acceleration of vesting in certain events) and are exercisable for a period of 10 years from the date of issue.

The Company estimates the fair value of each stock option at the grant date by using the Black-Scholes option-pricing model.  During the three and six months ended June 30, 2011, the Company recorded stock option expense of $0.7 million and $1.2 million, respectively.  During the three and six months ended June 30, 2010, the Company recorded stock option expense of $0.4 million and $0.6 million, respectively.

The principal assumptions used in applying the Black-Scholes option pricing model for the awards for the three and six month periods ended June 30, 2011 and 2010 were as follows:

	Three months ended		Six months ended
	June 30,		June 30,
	2011	2010	2011	2010
Risk-free interest rate	—	—	2.33% to 3.09%	1.95% to 2.97%
Dividend yield	—	—	n/a	n/a
Volatility factor of the expected market price of common stock	—	—	90% to 99%	92% to 94%
Weighted-average expected life of option	—	—	6.6 years	6.4 years
Weighted-average grant date fair value	—	—	$5.31	$2.36