STOCK BASED COMPENSATION

3 Months Ended

Mar. 31, 2012

STOCK BASED COMPENSATION

STOCK BASED COMPENSATION

NOTE B—STOCK BASED COMPENSATION

Stock Options

Compensation expense related to stock options and restricted stock awards recognized in operating results (general and administrative expenses) was approximately $0.4 and $0.4 million for the three months ended March 31, 2012 and March 31, 2011, respectively.

The following assumptions were used to value stock options calculated using the Black-Scholes options pricing model:

	Three months ended March 31,
	2012		2011
Dividend yield	0	%	0	%
Expected volatility	74.0	%	74.7	%
Risk-free interest rate	0.5	%	1.4	%
Expected life	3.5 years		3.5 years

			Weighted		Weighted
			Average		Average	Aggregate
	Number		Exercise		Remaining	Intrinsic Value
	of Options		Price		Term (in years)	(in thousands)
Outstanding at December 31, 2011	3,092,985		$	3.89
Granted	10,000		3.07
Exercised	(41,890	)	0.89
Forfeited or expired	(328,332	)	10.45
Outstanding at March 31, 2012	2,732,763		$	3.15	2.25	$	3,927
Exercisable at March 31, 2012	2,260,842		$	3.23	2.05	$	3,619

The total intrinsic value of options exercised during the three months ended March 31, 2012 and 2011 were approximately $107,000 and $240,000 respectively.

As of March 31, 2012 total unrecognized stock-based compensation expense related to non-vested stock options was approximately $0.6 million, which we expect to recognize over a weighted average period of 1.3 years.

Restricted Shares

Restricted share activity as of March 31, 2012 was as follows:

	Shares		Weighted Average Fair Value
Outstanding at December 31, 2011	615,731		$	4.22
Granted	—		—
Vested	(197,169	)	11.15
Forfeited	—		—
Outstanding at March 31, 2012	418,562		$	4.21

Restricted stock awards for executive officers and employees vest ratably over three years. Fair value of our restricted shares is based on our closing stock price on the date of grant.  As of March 31, 2012, total unrecognized stock-based compensation expense related to non-vested restricted shares was $1.7 million, which is expected to be recognized over a weighted average period of approximately 1.9 years.