Stock-Based Compensation

9 Months Ended

Sep. 30, 2011

Stock-Based Compensation

Stock-Based Compensation

4. Stock-Based Compensation

Stock Incentive Plans

The Company’s Stock Incentive Plans provide for the granting of stock awards, including stock options, stock appreciation rights and restricted stock, to employees and non-employees, including directors of the Company.

Stock Options

The following is a summary of option activity for the nine months ended September 30, 2011:

	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)	Aggregate Intrinsic Value
Outstanding at beginning of period	300,000		$	4.93	0.5	$	581,000
Forfeited	(51,500	)	$	6.30
Exercised	(208,794	)	$	4.50
Outstanding at end of Period	39,706		$	5.46	0.1	$	0
Exercisable at end of period	39,706		$	5.46	0.1	$	0

All stock options are fully vested, and the Company did not recognize any compensation expense relating to outstanding stock options during 2011 or 2010.

Stock Warrants

During the nine months ended September 30, 2011, all 300,000 warrants to purchase common stock were exercised.  As permitted under the warrant agreements, the warrants were exercised in a cashless transaction, and the total shares issued as a result of the warrant exercises were 117,145 shares.

Restricted Stock

In the nine months ended September 30, 2011, 130,200 shares of unvested restricted stock were awarded at a weighted average value of $7.08.   Of the restricted shares granted, 40,000 shares have performance based vesting conditions.  The value of the shares are amortized to compensation expense over the related service period (normally three years) or over the estimated performance period. Shares of non-vested restricted stock are forfeited if a recipient leaves the Company before the vesting date. Shares that are forfeited become available for future awards.

The following is a summary of restricted stock activity during the nine months ended September 30, 2011:

	Number of Shares
Outstanding at beginning of period	379,079
Granted	130,466
Forfeited	(2,468	)
Vested	(223,169	)
Outstanding at end of Period	283,908

During the quarters ended September 30, 2011 and 2010, compensation expense, net of forfeitures, of $191,000 and $230,000 was recorded, respectively.    During the nine months ended September 30, 2011 and 2010, compensation expense, net of forfeitures, of $514,000 and $444,000 was recorded, respectively.