13. Stock Compensation

Overview

The Company has stock option and stock incentive plans for employees and non-employee Directors that provide for grants of RSAs, RSUs, and options to purchase shares of Company common stock at exercise prices generally equal to the fair values of such stock at the dates of grant. The Company also maintains a shareholder approved ESPP for the benefit of its employees.

Under the Company's plans, the Company is currently authorized to grant the following number of shares and the Company has available for grant up to the following number of shares as of December 31, 2011 and 2010:


	Authorized	Available for Grant
Plan	Shares	2011	2010
1996 Discounted Employee Stock Purchase Plan, as amended	1,900,000	917,000	981,000
2002 Stock Incentive Plan	974,000	7,000	243,000
2004 Employee Stock Incentive Plan	2,100,000	293,000	26,000
2008 Non-Employee Directors Stock Incentive Plan	300,000	88,000	119,000
2009 Employee Stock Incentive Plan	2,000,000	1,037,000	1,560,000
Total	7,274,000	2,342,000	2,929,000

During 2010 the Company amended the 1996 Discounted Employee Stock Purchase Plan to increase the authorized shares under the plan by 1.0 million shares. Upon the exercise of stock options or grants of RSAs, the Company may issue the required shares out of authorized but unissued common stock or out of treasury stock, at management's discretion.

RSAs and RSUs

In 2011 the Compensation Committee of the Company's Board of Directors authorized grants of RSAs and RSUs from approved stock incentive plans to non-employee Directors and certain Company executives, officers, and employees totaling 421,000 shares of common stock, which had an aggregate market value of $2.2 million.

In 2010 the Compensation Committee of the Company's Board of Directors authorized grants of RSAs and RSUs from approved stock incentive plans to non-employee Directors and certain Company executives, officers, and employees totaling 278,000 shares of common stock, which had an aggregate market value of $1.7 million.

In 2009 the Compensation Committee of the Company's Board of Directors authorized grants of RSAs from approved stock incentive plans to non-employee Directors and certain Company executives and officers totaling 160,000 shares of common stock, which had an aggregate market value of $1.1 million.

A summary of stock grant activity for the years ended December 31, 2011, 2010, and 2009 is as follows:


				Weighted
				Average
				Grant Date
RSAs	Shares			Fair Value
Unvested at December 31, 2008	152,000		$	9.50
Granted	160,000			6.77
Vested	(45,000	)		10.62
Unvested at December 31, 2009	267,000			7.67
Granted	219,000			5.93
Vested	(122,000	)		6.34
Unvested at December 31, 2010	364,000			7.07
Granted	360,000			5.18
Vested	(128,000	)		7.28
Forfeited	(44,000	)		5.48
Unvested at December 31, 2011	552,000			5.91


				Weighted
				Average
				Remaining		Aggregate
				Contractual		Intrinsic
RSUs		Shares		Term in Years		Value
Outstanding at December 31, 2009	-	-		-	$	-
Granted		58,000
Outstanding at December 31, 2010		58,000		1.85		313,000
Granted		61,000
Vested		(19,000	)
Forfeited		(3,000	)
Outstanding at December 31, 2011		97,000		1.66		466,000

Vested and expected to vest		90,000		1.66		432,000

Stock Options

The Compensation Committee of the Company's Board of Directors authorized grants of stock options from approved stock incentive plans to certain Company executives and employees totaling 599,000, 451,000, and 438,000 shares in 2011, 2010, and 2009, respectively, with exercise prices equal to the stock prices on the respective grant dates.

A summary of the Company's stock option activity for the years ended December 31, 2011, 2010, and 2009 follows:


					Weighted
					Average
				Weighted	Remaining		Aggregate
				Average	Contractual		Intrinsic
	Shares			Exercise Price	Term in Years		Value
Outstanding at December 31, 2008	1,773,000		$	7.23	3.63	$	7,174,000
Granted	438,000			4.83
Exercised	(134,000	)		5.08
Forfeited	(26,000	)		5.62
Expired	(64,000	)		5.50
Outstanding at December 31, 2009	1,987,000			6.92	3.59		1,731,000
Granted	451,000			6.96
Exercised	(4,000	)		4.49
Forfeited	(15,000	)		6.11
Expired	(138,000	)		10.20
Outstanding at December 31, 2010	2,281,000			6.74	3.46		603,000
Granted	599,000			5.13
Exercised	(260,000	)		4.53
Forfeited	(100,000	)		5.60
Expired	(320,000	)		5.30
Outstanding at December 31, 2011	2,200,000			6.83	4.00		-

Vested and expected to vest	2,163,000			6.85	3.96		-
Exercisable at December 31, 2011	1,249,000			7.72	2.84		-

Other information concerning stock options for the years ended December 31 is as follows:


		2011		2010		2009
Weighted-average fair value of options granted	$	2.54	$	3.34	$	2.40
Intrinsic value of options exercised		261,000		10,000		274,000

Employees purchased common stock totaling 64,000, 43,000, and 79,000 shares in 2011, 2010, and 2009, respectively, through the Company's ESPP.

Stock Compensation Expense

The following weighted-average assumptions were used to determine the fair value of options:


	2011				2010				2009
	Stock		ESPP		Stock		ESPP		Stock		ESPP
	Options		Options		Options		Options		Options		Options
Expected life of options	4.0 Years		.50 Years		3.8 Years		.38 Years		4.0 Years		.25 Years
Expected stock price volatility	.65		.39		.65		.47		.65		.75
Risk-free interest rate	1.25	%	0.14	%	1.25	%	0.17	%	1.51	%	0.14	%

The following table summarizes stock compensation expenses (in thousands):


		2011		2010		2009
RSA and RSU expense	$	1,408	$	970	$	899
Stock option and ESPP option expense		1,606		1,950		1,780
Total stock compensation expense	$	3,014	$	2,920	$	2,679

Included in the total stock compensation expense, as applicable in each period, were expenses related to RSAs, RSUs, and stock options issued in each respective year as well as those issued in prior periods that continue to vest during the period, and compensation related to the Company's ESPP. These amounts were recorded as stock compensation expense and were subject to the Company's normal allocation of expenses to deferred preservation costs and inventory costs. The Company capitalized $224,000, $299,000, and $250,000 in the years ended December 31, 2011, 2010, and 2009, respectively, of the stock compensation expense included in the table above into its deferred preservation costs and inventory costs.

As of December 31, 2011 the Company had a total of $2.1 million in total unrecognized compensation costs related to unvested RSAs and RSUs, before considering the effect of expected forfeitures. As of December 31, 2011 this expense is expected to be recognized over a weighted-average period of 1.4 years for RSAs and 2.5 years for RSUs. As of December 31, 2011 there was approximately $1.7 million in total unrecognized compensation costs related to unvested stock options, before considering the effect of expected forfeitures. As of December 31, 2011 this expense is expected to be recognized over a weighted-average period of 1.6 years.