Share-Based Compensation

6 Months Ended

Jun. 30, 2011

Share-based Compensation [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Share-Based Compensation

MRV records share-based compensation expense in accordance with ASC Topic 718 Compensation - Stock Compensation. The following table summarizes the impact on MRV's results of operations of recording share-based compensation for the three and six months ended June 30, 2011 and 2010 (in thousands):

	Three months ended				Six months ended
	June 30,				June 30,
	2011		2010		2011		2010
Cost of goods sold	$	24	$	13	$	37	$	25
Product development and engineering	46		64		87		128
Selling, general and administrative	746		325		1,459		528
Total share-based compensation expense (1)	$	816	$	402	$	1,583	$	681

(1)Income tax benefits realized from stock option exercises and similar awards were immaterial in both periods.

The weighted average fair value of stock options granted during the six months ended June 30, 2011 was $1.02. There were no stock option grants during the six months ended June 30, 2010. As of June 30, 2011, the total unrecorded deferred share-based compensation balance for unvested securities, net of expected forfeitures, was $3.1 million, which is expected to be amortized over a weighted-average period of 2.6 years.

Valuation Assumptions

MRV uses the Black-Scholes option pricing model to estimate the fair value of stock option awards. The Black-Scholes model requires the use of subjective and complex assumptions including the option's expected life and the underlying stock price volatility. MRV expects future volatility to approximate historical volatility. The following weighted average assumptions were used for estimating the fair value of options granted during the six months ended June 30, 2011:

Six months ended June 30:	2011
Risk-free interest rate	2.0	%
Dividend yield	—	%
Volatility	87.0	%
Expected life (in years)	5.9