Share-Based Payments

9 Months Ended

Sep. 30, 2011

Share-Based Payments

Note 4 – Share–Based Payments

Share-based payment compensation is attributable to the granting of stock options and awarding of shares of restricted stock, and vesting of these options and shares of restricted stock over the remaining requisite service periods. The fair value of the portion of share-based payment awards that are ultimately expected to vest is recognized as compensation expense over the related vesting periods. Expense attributable to share-based compensation during the three and nine months ended September 30, 2011 was $186,000 and $603,000, respectively.  Expense attributable to share-based compensation during the three and nine months ended September 30, 2010 was $190,000 and $544,000, respectively.

In May 2011, pursuant to the terms of the 2003 Non-Employee Director Stock Option Plan, the Company granted options to purchase an aggregate of 100,000 shares of common stock to four non- employee directors upon their re-election to the Company’s Board of Directors.  These options, which are exercisable at a price of $2.55 per share, the market value of our common stock on the date of grant, are exercisable in four equal quarterly installments, on a cumulative basis, commencing upon grant.  In accordance with ASC 718, “Compensation – Stock Compensation,” we determined that $165,000 was the fair value of those options, of which $41,000 and $82,000 was recorded as share-based compensation expense during the three and nine months ended September 30, 2011, respectively.

In May 2010, we granted restricted stock awards covering 100,000 shares of our common stock with a grant date fair value of $143,000 to our non-employee directors and restricted stock awards covering 175,000 shares of our common stock with a grant date fair value of $296,000 to certain employees.  All restricted stock awards granted are pursuant to our 2008 Equity Compensation Plan. The awards issued to the non-employee directors vest ratably over three years and the awards issued to employees generally vest over three to five years.

In connection with the resignation of a director in January 2010, 12,369 shares of restricted stock and approximately 16,200 unvested options were forfeited, which resulted in a reversal of $15,000 in share-based compensation expense in the nine months ended September 30, 2010.