Annual report pursuant to Section 13 and 15(d)

STOCK OPTION PLANS

v2.4.0.6
STOCK OPTION PLANS
 12 Months Ended
Dec. 31, 2011
STOCK OPTION PLANS [Abstract]  
STOCK OPTION PLANS
NOTE 11 - STOCK OPTION PLANS
 
We account for stock based compensation expense in accordance with FASB ASC 718, Stock Based Compensation. We have several stock-based compensation plans under which incentive and non-incentive qualified stock options and restricted shares may be granted to employees, directors and consultants. We measure the cost of the employee/director/consultant services received in exchange for an award of equity instruments based on the grant date fair value of the award.
 
Our various stock-based employee compensation plans described below:
 
2005 Equity Incentive Plan
We have a stock awards plan, (the 2005 Equity Incentive Plan), under which 5,000,000 shares of our authorized but unissued common stock were reserved for issuance to employees, consultants, or to non-employee members of the Board or to any board of directors (or similar governing authority) of any affiliate of the Company. The 2005 Equity Incentive Plan replaced the previously approved stock option plan (the 1995 Stock Awards Plan).
 
For the 2005 Equity Incentive Plan, the fair value of options was estimated at the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions used for grants in fiscal 2011: dividend yield of 0%; volatility of 117%; risk-free interest rate of 1.42%; and expected lives of 5.6 years. The weighted average fair value of options granted was $1.87 per share during 2011. The assumptions for grants in fiscal 2010 were: dividend yield of 0%; volatility of 123%; risk-free interest rate of 2.32%; and expected lives of 5.7 years. The weighted average fair value of options granted was $2.23 per share during 2010.
 
Summarized information for the 2005 Equity Incentive Plan is as follows:
 

       
Weighted-
  
       
average
  
       
exercise
  
   
Options
  
price
  
Outstanding options at January 1, 2010
     1,435,237     $ 1.99  
Granted, fair value of $ 2.23 per share
     640,000       2.57  
Exercised
     (153,051 )     1.26  
Expired
     (173,453 )     3.51  
Outstanding options at December 31, 2010
     1,748,733       2.13  
Granted, fair value of $ 1.87 per share
     580,000       2.22  
Expired/forfeited
     (61,949 )     1.38  
Outstanding options at December 31, 2011
     2,266,784       2.17  
                 
Exercisable at December 31, 2011
     1,737,700       2.09  
 
The intrinsic value of options under this plan related to the outstanding and exercisable options were $324,000 and $324,000 at December 31, 2011, respectively. The intrinsic value of options under this plan related to the outstanding and exercisable options were $1,063,000 and $1,059,000, respectively at December 31, 2010.
 
The total intrinsic value of options exercised during 2011 was none and during 2010 was $187,000.
 
Further information regarding options outstanding under the 2005 Equity Incentive Plan at December 31, 2011 is summarized below:
 


     
Number of
    
Weighted average
    
Number of
    
Weighted average
  
     
options
    
Remaining
    
Exercise
    
options
    
Remaining
    
Exercise
  
Range of exercise prices
    
outstanding
    
life in years
    
price
    
exercisable
    
life in years
    
price
  
                                       
$   0.63 - 0.85       387,000       5.0     $ 0.64       387,000       5.0     $ 0.64  
$   1.38       245,000       8.0     $ 1.38       245,000       8.0     $ 1.38  
$   1.90-2.79       1,220,000       9.4     $ 2.40       739,100       9.3     $ 2.42  
$   3.00 - 7.23       414,784       7.0     $ 3.39       366,600       6.9     $ 3.44  
          2,266,784                       1,737,700                  
 
2007 Special Stock Option Plan
In January 2007 we adopted the 2007 Special Stock Option Plan and Agreement (the Plan). The Plan provides for the award of options to purchase 450,000 shares of the authorized but unissued shares of common stock of the Company. At December 31, 2011, all 450,000 shares were available for grant under the Plan.
 
1995 Stock Awards Plan
Under the 1995 Stock Awards Plan, as amended, 500,000 shares of our authorized but unissued common stock were reserved for issuance to optionees including officers, employees, and other individuals performing services for us. At December 31, 2011, there were no additional shares available for grant under the 1995 Stock Awards Plan. A total of 57,500 options were outstanding under this plan at December 31, 2011.
 
Options granted under all the plans generally vest ratably over a four to five year period and are generally exercisable over a ten-year period from the date of grant. Stock options were generally granted with an exercise price equal to the market value at the date of grant.
 
Summarized information for the 1995 Stock Awards Plan is as follows:
 
         
Weighted
  
         
average
  
         
exercise
  
   
Options
    
price
  
Outstanding options at January 1, 2010
     103,000     $ 15.89  
Expired
     (43,500 )     14.65  
Outstanding options at December 31, 2010
     59,500       16.80  
                 
Expired
     (2,000 )     23.05  
Outstanding options at December 31, 2011
     57,500       16.58  
                 
Exercisable at December 31, 2011
     57,500       16.58  
 
There was no intrinsic value related to outstanding or exercisable options under this plan at December 31, 2011 or 2010.
 
Further information regarding options outstanding under the 1995 Stock Awards Plan at December 31, 2011 is summarized below:
 


     
Number of
    
Weighted-average
    
Number of
    
Weighted-average
  
     
Options
    
Remaining
    
Exercise
    
Options
    
Remaining
    
Exercise
  
Range of exercise prices
    
outstanding
    
life in years
    
price
    
Exercisable
    
life in years
    
price
  
                                       
$   10.10 - 12.40       29,000       3.1     $ 11.09       29,000       3.1     $ 11.09  
$   14.05 - 18.65       18,000       1.0     $ 18.14       18,000       1.0     $ 18.14  
$   28.50 – 29.25       10,500       3.0     $ 29.07       10,500       3.0     $ 29.07  
          57,500                       57,500