Share-Based Compensation

9 Months Ended

Sep. 30, 2011

Share-Based Compensation [Abstract]

Share-Based Compensation

(7) Share-Based Compensation

The Company follows Financial Accounting Standards Board ("FASB") Accounting Standards Codification Topic 718, Share-Based Payments, in which compensation expense is recognized only for share-based payments expected to vest. We recognized compensation expense related to stock options of $102,153 and $305,216 for the three and nine month periods ended September 30, 2011, compared to $117,946 and $322,007 for the same periods in 2010.

As of September 30, 2011, there was approximately $628,000 of total unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the Company's stock option plans. That cost is expected to be recognized over a remaining weighted-average period of 2.1 years.

Employees Stock Options and Stock Grants

During the nine months ended September 30, 2011, proceeds of $4,080 were received, and 4,000 shares of common stock were issued pursuant to option exercises compared to none for the same period in 2010. For the nine months ended September 30, 2011, 524,500 stock options were granted compared to 309,300 for the same period in 2010. For the nine months ended September 30, 2011, 126,067 stock options were forfeited, compared to 58,625 for the same period in 2010.

Stock Appreciation Rights

During 2010 and 2009, the Company granted its outside directors stock appreciation rights (SARs) totaling 106,750 shares, under the Company's Amended and Restated 2006 Stock Appreciation Rights Plan. For the three and nine month periods ended September 30, 2011, the recovery in valuation of the awards previously granted was ($51,765) and ($53,698), respectively, and was included in stock-based compensation expense. The expense recognized in 2010 were $792 and $39,572, respectively. The fair value of awards granted during the three and nine months ended September 30, 2010 was $9,385 and $26,863, respectively, and was included in stock-based compensation expense for those periods. The SARs granted vested immediately and are payable upon a director's removal or resignation from the position of director. These awards are accounted for as liability awards, included in accrued expenses as of September 30, 2011 and 2010, and adjusted to fair value each reporting period. The fair value of the liability on September 30, 2011 is $27,459, compared to $81,157 on December 31, 2010.

In August of 2011, a director resigned, which reduced a potential future liability related to our SAR program and therefore resulted in a portion of the SAR recovery described above.

As of September 30, 2011, the Company does not have any unvested restricted stock or performance shares outstanding.

The following table illustrates the various assumptions used to calculate the Black-Scholes option pricing model for stock options granted during the periods presented:

For the nine months ended	September 30, 2011			September 30, 2010
Weighted-average risk-free interest rates:		2.51	%		2.96	%
Dividend yield:		—			—
Weighted-average expected life of the option:		7 Years			7 Years
Weighted-average expected stock price volatility:		74.21	%		79.01	%
Weighted-average fair value of the options granted:	$	0.89		$	1.23