Share-Based Compensation

9 Months Ended

Sep. 30, 2011

Share-Based Compensation [Abstract]

SHARE-BASED COMPENSATION

7) SHARE-BASED COMPENSATION

Total share-based compensation expense, related to all of the Company’s share-based awards, recognized for the three and nine-month periods ended September 30, 2011 and 2010 included the following line items:

	Three-months ended				Nine-months ended
	September 30,		September 30,		September 30,		September 30,
	2011		2010		2011		2010
Cost of product revenues	$	14,000	$	11,000	$	39,000	$	38,000
Research and development		39,000		29,000		106,000		94,000
Marketing and sales		57,000		37,000		164,000		83,000
General and administrative		202,000		356,000		575,000		706,000
Share-based compensation expense	$	312,000	$	433,000	$	884,000	$	921,000

Incentive And Non-qualified Stock Options —

The weighted-average estimated fair values of employee stock options granted during the three and nine-month periods ended September 30, 2011 were $2.85 and $2.89 per share, respectively, using the Black-Scholes option valuation model with the following weighted-average assumptions (annualized percentages):

	Three-months ended			Nine-months ended
	September 30, 2011
Expected volatility		78.72	%		77.21	%
Risk-free interest rate		1.29	%		2.22	%
Expected dividend yield		0	%		0	%
Expected life-directors and officers (years)		5.94			5.94
Expected life-non-officer employees (years)		5.58			5.58

A summary of stock option activity for the nine-month period ended September 30, 2011 is as follows:

					Average
			Weighted		Remaining
			Average		Contractual		Aggregate
			Exercise		Term		Intrinsic
			Price		(Years)		Value
Outstanding, beginning of period, January 1, 2011	3,064,050		$	4.09			$
Options granted	150,300		$	4.37
Options forfeited	(25,037	)	$	2.34
Options expired	(101,500	)	$	13.45
Options exercised	(273,338	)	$	1.89
Outstanding, end of period	2,814,475		$	3.99		4.12	$	3,488,000
Exercisable, end of period	1,839,314		$	5.08		3.57	$	1,674,000
Options vested and expected to vest, end of period	2,695,728		$	4.08		4.07	$	3,287,000

Unvested Shares Of Common Stock —

A summary of unvested shares of common stock activity for the nine-month periods ended September 30, 2011 and 2010 is as follows:

	2011			2010
Outstanding, beginning of period,		586,000			393,250
Shares granted		506,000			308,000
Shares vested		(191,250	)		(115,250	)
Outstanding, end of period		900,750			586,000

	2011		2010
Weighted average grant date fair value of shares vested during period	$	1.88	$	1.41
Weighted average grant date fair value of shares granted during period	$	4.42	$	1.65
Weighted average grant date fair value of unvested shares, end of period	$	3.08	$	1.52
Weighted average remaining years to vest		2.73		2.90

     At September 30, 2011 total unrecognized estimated compensation cost related to non-vested common shares was $2,212,000, which is expected to be recognized over a weighted average period of 2.73 years. At September 30, 2011 total unrecognized estimated compensation cost related to stock options was $924,000 which is expected to be recognized over a weighted average period of 2.16 years.