Share-Based Compensation

9 Months Ended

Sep. 30, 2012

Share-Based Compensation [Abstract]

Share-Based Compensation

(6) Share-Based Compensation

The Company follows FASB ASC Topic 718, Share-Based Payments, in which compensation expense is recognized only for share-based payments expected to vest. The Company recognized compensation expense related to stock options of $62,203 and $225,104 for the three and nine month periods ended September 30, 2012, compared to $102,153 and $305,216 for the same periods in 2011.

As of September 30, 2012, there was approximately $370,000 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 1.8 years.

Stock Options and Stock Grants

During the nine months ended September 30, 2012, no stock options were exercised. 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 stock option exercises. During the nine months ended September 30, 2012, 547,000 stock options were granted compared to 524,500 stock options granted during the same period in 2011. During the nine months ended September 30, 2012, 168,732 stock options were forfeited, compared to 126,067 stock options forfeited during the same period in 2011.

Stock Appreciation Rights

During 2010 and 2009, the Company granted its outside directors stock appreciation rights (SAR’s) totaling 106,750 shares under the Company’s Amended and Restated 2006 Stock Appreciation Rights Plan. These awards are accounted for as liability awards, included in accrued expenses as of September 30, 2012 and 2011, and adjusted to fair value each reporting period. The fair value of the liability for the 87,500 shares that were outstanding on September 30, 2012 was $8,442, compared to $10,873 on December 31, 2011.

As of September 30, 2012, 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, 2012			September 30, 2011
Weighted-average risk-free interest rates:		1.10	%		2.51	%
Dividend yield:		—			—
Weighted-average expected life of the option:		7 Years			7 Years
Weighted-average expected stock price volatility:		85.33	%		74.21	%
Weighted-average fair value of the options granted:	$	0.23		$	0.89