Stock Based Compensation

6 Months Ended

Jun. 30, 2011

Stock Based Compensation

Stock Based Compensation

3.  Stock Based Compensation

Stock Options

The Company accounts for stock options using the fair value recognition provisions of Accounting Standards Codification (“ASC”) 718, “Compensation-Stock Compensation”. Compensation expense for options for the three and six months ended June 30, 2011 was $40,000. For the three and six month periods ended June 30, 2010 there was no compensation expense for options. At June 30, 2011, there was no unrecognized compensation costs related to stock options granted.

Nonqualified and incentive stock options have been granted to directors, officers and employees of the Company under our Stock Option Plans.  Options generally vest over 3 years and expire five years from the date of the grant.  At June 30, 2011, 3,009,477 shares were authorized for issuance under the stock option plans.  Awards that expire or are cancelled without delivery of shares generally become available for issuance under the plans.  The Company issues new shares to satisfy stock option exercises.

Options granted during the six months ended June 30, 2011 and 2010 was 55,000 and 0, respectively (see note 5).

A summary of option activity under the plans for the six months ended June 30, 2011 is as follows:

	Shares (in thousands)		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Balance, January 1, 2011		425	$	0.78
Granted		55	$	1.20
Exercised		--		--
Canceled		--		--
Forfeited		--		--
Balance, June 30, 2011		480	$	0.82		1.9	$	203
Exercisable, June 30, 2011		480	$	0.82		1.9	$	203

The total fair value of options vested during the six months ended June 30, 2011 and 2010 was $40,000 and $0, respectively.

Restricted Stock Grants

During the six months ended June 30, 2011 the company granted 111,000 shares to directors as part of their compensation.  The stock grants had a fair value of approximately $86,000 based on the closing price of the stock on the date of the grant. The stock grants vest over the two year period January 1, 2011 through December 31, 2012.

A summary of the status of the Company's restricted non-vested shares issued pursuant to employment and service agreements as of June 30, 2011 and changes during the six months ended June 30, 2011 is presented below:

Non-vested Shares	Shares (in thousands)			Weighted-average Grant Date Fair Value
Non-vested at January 1, 2011		26		$	0.95
Granted		111		$	0.78
Vested		(50	)	$	0.78
Forfeited		(29	)	$	0.62
Non-vested at June 30, 2011		58		$	0.94

For the three months ended June 30, 2011 and 2010 stock compensation expense for stock grants was $21,000 and $135,000, respectively. For the six months ended June 30, 2011 and 2010 stock compensation expense for stock grants was $35,000 and $269,000, respectively.  At June 30, 2011, the future expected expense for non-vested shares is $54,000 and will be recognized on a straight-line basis over the period July 1, 2011 through December 31, 2012.