20.

STOCK OPTION PLANS AND WARRANTS

The Company recognizes the cost of all employee stock options on a straight-line attribution basis over their respective vesting periods, net of estimated forfeitures.

Determining the fair value of share-based awards at the grant date requires judgment, including estimating the expected term that the stock options will be outstanding prior to exercise, the associated volatility and the expected dividends. Judgment is also required in estimating the amount of share-based awards expected to be forfeited prior to vesting. If actual forfeitures differ significantly from these estimates, share-based compensation expense could be materially impacted.

A summary of the Company’s stock option and restricted stock units activity, and related information for the three month periods ended March 31, 2011, June 30, 2011 and September 30, 2011 is as follows:


Total Options	Number of Options			Weighted- Average Exercise Price

Outstanding at January 1, 2011		1,300,400		$	29.06
Granted		82,000		$	23.06
Exercised		(13,063	)	$	5.02
Forfeited		(16,833	)	$	27.75

Outstanding at March 31, 2011		1,352,504		$	28.65
Exercisable at March 31, 2011		1,080,512		$	29.43

Outstanding at April 1, 2011		1,352,504		$	28.65
Granted		79,250		$	11.02
Exercised		(5,062	)	$	1.13
Forfeited		(21,825	)	$	27.37

Outstanding at June 30, 2011		1,404,867		$	27.77
Exercisable at June 30, 2011		1,111,625		$	29.12

Outstanding at July 1, 2011		1,404,867		$	27.77
Granted		0		$	0
Exercised		0		$	0
Forfeited		0		$	0

Outstanding at September 30, 2011		1,404,867		$	27.77
Exercisable at September 30, 2011		1,111,625		$	29.12


Nonvested restricted stock units	Number of Restricted Stock Units			Weighted- Average Grant Date Fair Value

Nonvested at January 1, 2011		79,150		$	35.82
Granted		378		$	25.55
Vested		(20,223	)	$	30.42
Forfeited		(4,329	)	$	16.04

Nonvested at March 31, 2011		54,976		$	37.96

Nonvested at April 1, 2011		54,976		$	37.96
Granted		28,685		$	11.53
Vested		(3,679	)	$	60.59
Forfeited		(364	)	$	32.06

Nonvested at June 30, 2011		79,618		$	27.42

Nonvested at July 1, 2011		79,618		$	27.42
Granted		67,940		$	10.63
Vested		(6,987	)	$	69.35
Forfeited		0		$	0

Nonvested at September 30, 2011		140,571		$	17.22


Nonvested restricted stock	Number of Restricted Stock			Weighted- Average Grant Date Fair Value
Nonvested at January 1, 2011		46,001		$	29.84
Granted		40,035		$	22.86
Vested		(1,000	)	$	35.01
Forfeited		(7,501	)	$	29.73

Nonvested at March 31, 2011		77,535		$	26.18

Nonvested at April 1, 2011		77,535		$	26.18
Granted		7,583		$	11.25
Vested		0		$	0.00
Forfeited		0		$	0.00

Nonvested at June 30, 2011		85,118		$	24.85

Nonvested at July 1, 2011		85,118		$	24.85
Granted		0		$	0
Vested		0		$	0
Forfeited		0		$	0

Nonvested at September 30, 2011		85,118		$	24.85

During the three months ended September 30, 2011, the range of exercise prices for outstanding options was $2.00 to $60.92. During 2011, the weighted average remaining contractual life of options outstanding will be 5.3 years. Exercise prices for options exercisable as of September 30, 2011 ranged from $2.00 to $60.92. The Company has also granted 67,940 restricted stock units at an average price of $10.63 during the third quarter of 2011.

The Company has issued stock options to employees under stock based compensation plans. Stock options are issued at the current market price, subject to a vesting period, which varies from one to three years. As of September 30, 2011, the Company has not changed the terms of any outstanding awards.

During the three months ended September 30, 2011, the Company recognized compensation cost of $2.0 million and a related deferred tax asset of $0.4 million.

As of September 30, 2011, there was $2.0 million of total unrecognized compensation cost related to non-vested stock options, restricted stock units and restricted stock granted under the Plan. The costs are expected to be recognized over period through 2011-2015.

Total cash received from exercise of options during the nine months ended September 30, 2011 amounted to $72 thousand.

For the three month period ended September 30, 2011, the compensation expense related to all options was calculated based on the fair value of each option grant using a binomial distribution model. The Company has never paid cash dividends and does not currently have plans to pay cash dividends, and thus has assumed a 0% dividend yield. Expected volatilities are based on an average of implied and historical volatility projected over the remaining term of the options. The expected life of stock options is estimated based on historical data on exercise of stock options, post-vesting forfeitures and other factors to estimate the expected term of the stock options granted. The risk-free interest rates are derived from the U.S. Treasury yield curve in effect on the date of grant for instruments with a remaining term similar to the expected life of the options. In addition, the Company applies an expected forfeiture rate when amortizing stock-based compensation expenses. The estimate of the forfeiture rates is based primarily upon historical experience of employee turnover. As individual grant awards become fully vested, stock-based compensation expense is adjusted to recognize actual forfeitures. The following weighted-average assumptions were used in the calculation of fair value:


	Nine months ended September 30,
	2011			2010
Fair Value	$	7.60		$	12.57
Dividend Yield		0	%		0	%
Expected Volatility		66.1	%		68.2	%
Weighted Average Volatility		66.1	%		68.2	%
Risk Free Interest Rate		0.3	%		0.3% - 0.5	%
Expected Life of Options from Grant		3.2			3.2