STOCK BASED COMPENSATION

3 Months Ended

Mar. 31, 2012

STOCK BASED COMPENSATION

STOCK BASED COMPENSATION

5.STOCK BASED COMPENSATION

Our stock based compensation programs consist of stock option and restricted stock grants made to employees and directors.

Stock Compensation Expense

Stock compensation expense for the three months March 31, 2012 and 2011 was $193,000 and $374,000, respectively. Stock compensation expense is recorded as a component of general and administrative expenses for each period. The Company did not recognize a tax benefit from the stock compensation expense because the Company considers it is more likely than not that the related deferred tax assets, which have been reduced by a full valuation allowance, will not be realized.

A total of 100,571 shares of restricted stock were granted on March 30, 2012 to the President/CEO.  This grant was made in connection with 2011 performance criteria in accordance with his employment agreement.  The Company recognized stock compensation expense for the restricted share grants of $92,000 in the first quarter of 2012 in connection with this issuance.

A total of 56,700 shares of restricted stock were granted on March 30, 2012 to the four executive officers.  This grant was made in connection with 2011 performance criteria in accordance with the Company’s Long Term Incentive Plan.  The Company recognized stock compensation expense for the restricted share grants of $39,000 in the first quarter of 2012 in connection with this issuance.

A total of 42,553 shares of restricted stock were issued on January 3, 2011 to the President/CEO.  This grant was made in connection with 2011 performance criteria in accordance with his employment agreement.  The Company recognized stock compensation expense for the restricted share grants of $140,000 in the first quarter of 2011 in connection with this issuance.

The total estimated unrecognized compensation cost from the unvested stock options and restricted grants at March 31, 2012 was approximately $440,000, which is expected to be recognized over the weighted average vesting period of the individual grants which range from 1-3 years.

Stock Options for the Three Months Ended March 31, 2012

The following table summarizes stock options outstanding and changes during the three month period ended March 31, 2012:

	Outstanding Options
	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term —in years	Aggregate Intrinsic Value
Options outstanding at January 1, 2012	2,985,231	$	2.59
Granted	—	—
Exercised	—	—
Canceled or forfeited	—	—
Options outstanding at March 31, 2012	2,985,231	$	2.59	3.8	$	17,000
Options exercisable at March 31, 2012	2,749,397	$	2.65	3.4	$	7,000

Shares available for grant under the Stock Option Plans as of March 31, 2012 were 2,564,291.

Stock options outstanding and currently exercisable at March 31, 2012 are as follows:

	Options Outstanding				Options Exercisable
Stock Option Plan	Number of Options Outstanding	Weighted Average Remaining Contractual Life	Weighted Average Exercise price		Number of Options Exercisable	Weighted Average Exercise Price
		(in years)
1995 Stock Incentive Plan	1,834,062	2.4	$	1.31	1,834,062	$	1.31
2004 Stock Incentive Plan	407,418	6.3	3.45		334,085	4.00
2004 Directors’ Plan	743,751	5.9	5.26		581,250	6.12
	2,985,231	3.8	$	2.59	2,749,397	$	2.65