STOCK-BASED COMPENSATION

6 Months Ended

Jun. 30, 2011

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

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

NOTE 4 - STOCK-BASED COMPENSATION

Stock-based Compensation

Total stock-based compensation expense is attributable to the granting of, and the remaining requisite service periods of, stock options and warrants.  Compensation expense attributable to stock-based compensation was $51,000 and $34,000 during the three-month periods ended June 30, 2011 and 2010, respectively, and was $86,000 and $69,000 for the six-month periods ended June 30, 2011 and 2010, respectively.  The compensation expense is recognized in selling, general and administrative expenses on the Company’s statements of operations on a straight-line basis over the vesting periods.  The Company recognizes compensation cost over the requisite service period. However, the exercisability of the respective non-vested options, which are at pre-determined dates on a calendar year, do not necessarily correspond to the period(s) in which straight-line amortization of compensation cost is recorded. As of June 30, 2011, the Company had approximately $317,000 of total unrecognized compensation cost related to non-vested awards granted under our stock-based plans, which we expect to recognize over a weighted-average period of 1.6 years.

The expected term was based on historical exercises and terminations. The volatility for the periods with the expected term of the options is determined using historical volatilities based on historical stock prices. The dividend yield is 0% as the Company has historically not declared dividends and does not expect to declare any in the future.

Stock Option Plan

The Company’s 2002 Incentive Stock Option Plan (the “Current Plan”) authorizes the issuance, to employees and directors, of options to purchase a maximum of 1,100,000 shares of Class A Common Stock. These options must be issued within ten years of the effective date of the Current Plan and are exercisable for a ten year period from the date of grant, at prices not less than 100% of the market value of the Class A Common Stock on the date the option is granted. Incentive stock options granted to any 10% stockholder are exercisable for a five year period from the date of grant, at prices not less than 110% of the market value of the Class A Common Stock on the date the option is granted. Pursuant to the Current Plan, the Stock Option Committee has the discretion to award non-qualified stock option grants with various vesting parameters. Options have vesting periods of immediate to five years. In the event options granted contain a vesting schedule over a period of years, the Company recognizes compensation cost for these awards over the requisite service period. The Current Plan, which terminates in 2012, is the successor to the Company’s 1992 Incentive Stock Option Plan (the “Prior Plan”).

On May 16, 2011 (“Grant Date”), the stock option/compensation committee of Company’s board of Directors authorized the issuance of 70,000 options to purchase shares of its Class A Common Stock.  The options expire ten years from the Grant Date. The Company granted 15,000 of these options to its Chief Operating Officer/Chief Financial Officer, with the balance to non-executive employees of the Company.  All options granted on the Grant Date vest one-third on the first three anniversaries of the Grant Date. Further, all options granted on the Grant Date have an exercise price of $4.56, which was the closing price of the Company’s common stock on the Grant Date.

The Company estimated the fair value of the 70,000 common stock options granted on the Grant Date using the following assumptions:

Risk-free interest rate		3.20	%
Expected term (in years)	6.5 years
Volatility		61.99	%
Dividend yield		0	%
Weighted-average fair value of options granted	$	2.80

The following is a summary of the changes in outstanding options during the six month period ended June 30, 2011:

	Option Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding, January 1, 2011		585,624	$	6.73		5.6		—
Granted		70,000		4.56		9.9		—
Exercised		—		—
Forfeited		—		—
Expired		—		—
Outstanding, June30,  2011		655,624	$	6.50		5.6	$	138,000
Vested and expected to vest, June 30, 2011		457,624	$	7.62		4.2	$	31,000

The following is a summary of changes in non-vested shares for the six months ended June 30, 2011:

	Option Shares			Weighted Average Grant- Date Fair Value
Non-vested shares, January 1, 2011		165,333		$	2.19
Granted		70,000			2.80
Vested		(37,333	)		2.44
Forfeited		—			—
Non-vested shares, June 30, 2011		198,000		$	2.36

The number of shares of Class A common stock reserved for stock options available for issuance under the Current Plan as of June 30, 2011 was 302,212. All of the options outstanding at June 30, 2011 were issued under the Current Plan.