4.	Stock options

On April 14, 2011, the Company adopted the Innodata Isogen, Inc. 2009 Stock Plan, as amended and restated (the “2009 Plan”). The number of shares of stock that may be delivered, purchased or used for reference purposes with respect to awards granted under the 2009 Plan after March 31, 2011 is 2,270,118, less (i) one share for every share that was subject to an option or SAR granted after March 31, 2011, and (ii) two shares for every share that was subject to an award granted after March 31, 2011 that was not an option or SAR. After March 31, 2011, any shares subject to an award or portion of any award under the Company’s 2001 and 2002 Stock Option Plans or the 2009 Plan that expires or terminates unexercised, becomes unexercisable or is forfeited or is otherwise terminated, surrendered or canceled as to any shares, or with reference to any shares, without the delivery of shares of stock, the applicable shares subject to such award, or with reference to which such award was made, under the 2001 and 2002 Stock Option Plans or the 2009 Plan shall thereafter be available for further awards under the 2009 Plan, and shall be added back as one share for every one share that was subject to an option or SAR, and two shares for every one share that was subject to an award other than an option or SAR.

A summary of option activity under the Company’s stock option plans as of June 30, 2011, and changes during the period then ended, is presented below:

	Number of Shares			Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (years)		Aggregate Intrinsic Value

Outstanding at January 1, 2011		2,096,780		$	2.83
Granted		1,355,000		$	2.56
Exercised		—			—
Forfeited/Expired		(29,451	)	$	3.51
Outstanding at June 30, 2011		3,422,329		$	2.72		5.06	$	727,000
Exercisable at June 30, 2011		1,862,999		$	2.67		2.93	$	693,000

The fair value of stock options is estimated on the date of grant using the Black-Scholes option pricing model. The weighted average fair values of the options granted and weighted average assumptions are as follows:

	Six months ended
	June 30,
	2011			2010

Weighted average fair value of options granted	$	1.59		$	3.54

Risk-free interest rate		1.96% - 2.83	%		3.19	%
Expected life (years)		5-8			8
Expected volatility factor		70	%		90	%
Expected dividends	None			None

No options were exercised during the six months ended June 30, 2011 and 2010.

A summary of restricted shares under the Company’s stock option plans as of June 30, 2011, and changes during the period then ended, is presented below:

	Number of Shares			Weighted-Average Grant Date Fair Value

Unvested at January 1, 2011		40,000		$	4.39
Granted		30,000		$	2.59
Vested		(10,000	)	$	4.39
Forfeited/Expired		—		$	—
Unvested at June 30, 2011		60,000		$	3.49

The total compensation cost related to non-vested stock awards not yet recognized as of June 30, 2011 totaled approximately $2.5 million. The weighted-average period over which these costs will be recognized is thirty three months.

The stock-based compensation expense related to the Company’s various stock awards was allocated as follows (in thousands):

	Three months ended June 30,				Six months ended June 30,
	2011		2010		2011		2010

Direct operating costs	$	17	$	3	$	18	$	6
Selling and adminstrative expenses		171		68		244		86
Total stock-based compensation	$	188	$	71	$	262	$	92