Note 14 Stock-Based Compensation and Stockholders' Rights Plan

Effective May 19, 2004, the Company adopted its 2004 Incentive Stock Plan (the "2004 Stock Plan") and its 2004 Restricted Stock Plan for Non-Employee Directors (the "2004 Director Plan"). Effective upon the adoption of these Plans, all the Company's previous stock option plans terminated, except with respect to options outstanding under those plans. As of December 31, 2011 and 2010, the aggregate number of shares of common stock underlying outstanding options issued under all previous stock option plans was 1,076 and 1,554, respectively, at an average exercise price per share of $3.76 and $4.34, respectively, with expiration dates through November 2013. All stock-based compensation expense for vested options was recognized prior to 2008.

In 2009, the maximum number of shares of common stock reserved for issuance under the 2004 Stock Plan was increased from 2,000 to 4,000. Total awards issued under this plan, net of repurchases, amounted to 384 shares of restricted stock in 2011, 284 shares of restricted stock in 2010, and 628 shares of restricted stock in 2009. The Company estimated the future value associated with awards granted in 2011, 2010 and 2009 as $8,007, $3,688 and $2,200, respectively, which is calculated based on the fair market value of the common stock on the date of grant less the amount paid by the recipient and is expensed over the vesting period of each award. The compensation expense recognized in 2011, 2010 and 2009 was $2,637, $1,149 and $1,044, respectively. Each of these awards was made with a vesting period of three years from the date of grant and required the recipient to pay the lesser of $1.00 for each share or an amount equal to ten percent of the fair market value of the Company's common stock per share at the date of grant.

The purpose of this Plan is to provide an incentive that permits the persons responsible for the Company's growth to share directly in that growth and to further the identity of their interests with the interests of the Company's stockholders. Any person who is an employee of or consultant to the Company, or a subsidiary or an affiliate of the Company, is eligible to be considered for the grant of restricted stock awards, stock options or performance awards pursuant to the 2004 Stock Plan. The 2004 Stock Plan is administered by the Compensation Committee of the Board of Directors, which, pursuant to the provisions of the 2004 Stock Plan, has the sole authority to determine recipients of awards under that plan, the number of shares to be covered by such awards and the terms and conditions of each award. The 2004 Stock Plan may be amended, altered or discontinued at the sole discretion of the Board of Directors at any time.

The 2004 Director Plan provides for the grant of up to 400 shares of common stock to non-employee directors (as defined in the Plan) of the Company, subject to adjustment in accordance with the terms of the Plan. The purpose of this Plan is to attract, retain and motivate non-employee directors of exceptional ability and to promote the common interests of directors and stockholders in enhancing the value of the Company's common stock. Each non-employee director of the Company is eligible to participate in this Plan upon their election to the Board of Directors. The Plan provides for initial grants of 1 share of common stock to each newly elected non-employee director, annual grants of 3 shares of common stock as of the close of business on the date of each annual meeting of stockholders, and interim grants of 3 shares of common stock, or a pro rata portion thereof, to non-employee directors elected at meetings other than the annual meeting. Effective April 1, 2011, the Board of Directors amended this Plan to limit the value of any award of shares made to an eligible director to $50, valued on the date of the award. The issue price of common stock awarded under this Plan is equal to the par value per share of the common stock. The Company accounts for the fair value of awards of common stock made under this Plan, net of the issue price, as director compensation expense in the period in which the award is made. During the years ended December 31, 2011, 2010 and 2009, the Company recorded $300, $257 and $146, respectively, as director compensation expense in connection with awards of 16 shares in 2011, 36 shares in 2010 and 42 shares in 2009 of common stock made to the non-employee directors of the Company pursuant to this Plan.

As of December 31, 2011, 121 and 2,096 shares of common stock were available for future grants under the 2004 Director Plan and the 2004 Stock Plan, respectively. The status of the Company's stock options is summarized below:


	2011				2010				2009
	Options		Weighted Average Exercise Price		Options		Weighted Average Exercise Price		Options		Weighted Average Exercise Price



*(shares and options in thousands)*
Outstanding at beginning of year	1,554		$	4.34	1,728		$	4.60	1,772		$	4.56
Exercised	(452	)		5.61	(158	)		7.13	(30	)		2.82
Lapsed or canceled	(26	)		6.72	(16	)		5.34	(14	)		3.36
Outstanding at end of year	1,076		$	3.76	1,554		$	4.34	1,728		$	4.60
Options exercisable at end of year	1,076				1,554				1,728
Shares available for future option
grants⁽¹⁾	2,217				2,480				2,736

(1) Assumes the issuance of options permitted by the 2004 Incentive Stock Plan.

The following table summarizes information about stock options outstanding at December 31, 2011:


	Options Outstanding				Options Exercisable
	Options Outstanding	Weighted Average Remaining Contractual Life (Years)	Weighted Average Exercise Price		Options Outstanding	Weighted Average Exercise Price



Range:
*(options in thousands)*
$1.00 to $4.99	1,030	1.69	$	3.62	1,030	$	3.62
$5.00 to $9.99	46	.33		6.97	46		6.97
$10.00 to $14.99	—	—		—	—		—
		1.63	$	3.76	1,076	$	3.76

The intrinsic value of the Company's 1,076 outstanding stock options amounted to $15,494 at December 31, 2011.

From December 2008 through November 2011, the Company maintained a stockholders' rights plan ("the Rights Plan"). The Rights Plan included a right for holders of Common Stock to purchase Series A Preferred Stock, generally exercisable if a person or group commenced a tender or exchange offer for 15 percent or more of the Company's Common Stock. The Series A Preferred Stock rights were terminated upon termination of the Rights Plan on November 15, 2011.