16.	SHARE-BASED COMPENSATION

In accordance with ASC 718, compensation expense is recognized only for those shares expected to vest, based on the Company's historical experience and future expectations. The following table summarizes the effects of share-based compensation to options and awards granted under the Company's equity incentive plans for each of the periods presented:

	Year Ended December 31,
	2011		2010		2009
	(Dollars in thousands)

Salaries and employee benefits	$	2,409	$	319	$	276
Directors stock awards		153		55		86
Legal and professional services		55		-		-
Net share-based compensation effect	$	2,617	$	374	$	362

The Company's share-based compensation arrangements are described below:

Stock Option Plans

We have adopted stock option plans for the purpose of granting options to purchase the Company's common stock to directors, officers and other key individuals. Option awards are generally granted with an exercise price equal to the market price of the Company's common stock at the date of grant; those option awards generally vest based on three or five years of continuous service and have 10-year contractual terms. Certain option and share awards provide for accelerated vesting if there is a change in control (as defined in the stock option plans below). We have historically issued new shares of common stock upon exercises of stock options and purchases of restricted awards.

In February 1997, we adopted the 1997 Stock Option Plan (“1997 Plan”) basically as a continuance of the 1986 Stock Option Plan. In April 1997, our shareholders approved the 1997 Plan, which provided 2,000,000 shares of the Company's common stock for grants to employees as qualified incentive stock options and to directors as nonqualified stock options.

In September 2004, we adopted and our shareholders approved the 2004 Stock Compensation Plan (“2004 Plan”) making available 1,500,000 shares for grants to employees and directors. Upon adoption of the 2004 Plan, all unissued shares from the 1997 Plan were frozen and no new options will be granted under the 1997 Plan. Optionees may exercise outstanding options granted pursuant to the 1997 Plan until the expiration of the respective options in accordance with the original terms of the 1997 Plan. In May 2007, the 2004 Plan was amended to increase the number of shares available for grant by an additional 1,000,000 shares. In April 2011, the 2004 Plan was amended to increase the number of shares authorized from 1,402,589 to 4,944,831. To satisfy share issuances pursuant to the share-based compensation programs, we issue new shares from the 2004 Plan.

At December 31, 2011, 2010 and 2009, a total of 2,539,341, 57,758 and 64,554 shares, respectively, were available for future grants.

The fair value of each option award is estimated on the date of grant based on the following:

Valuation and amortization method-We estimate the fair value of stock options granted using the Black-Scholes option pricing formula and a single option award approach. We use historical data to estimate option exercise and employee termination activity within the valuation model; separate groups of employees that have similar historical exercise behavior are considered separately for valuation purposes. This fair value is then amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period.

Expected life-The expected life of options represents the period of time that options granted are expected to be outstanding.

Expected volatility-Expected volatilities are based on the historical volatility of the Company's common stock.

Risk-free interest rate-The risk-free interest rate for periods within the contractual life of the option is based on the Treasury yield curve in effect at the time of grant.

Expected dividend-The expected dividend assumption is based on our current expectations about its anticipated dividend policy.

Stock Option Activity

The fair value of the Company's stock options granted to employees was estimated using the following weighted-average assumptions:

	Year Ended December 31,
	2011			2010			2009

Expected volatility		-	%		-	%		58.0	%
Risk free interest rate		-	%		-	%		2.8	%
Expected dividends		-	%		-	%		0.9	%
Expected life (in years)		-			-			5.9
Weighted average fair value	$	-		$	-		$	33.20

No stock options were granted during 2011 and 2010.

The following is a summary of option activity for our stock option plans for the year ended December 31, 2011:

					Weighted Average
					Remaining	Aggregate
			Weighted Average		Contractual	Intrinsic Value
	Shares		Exercise Price		Term (in years)	(in thousands)

Outstanding at January 1, 2011	41,934		$	432.17
Changes during the year:
Expired	(1,558	)		569.18
Forfeited	(210	)		182.46
Outstanding at December 31, 2011	40,166			428.16	3.2	$	-

Vested and expected to vest at
December 31, 2011	39,010			433.89	3.9		-

Exercisable at December 31, 2011	35,974			458.11	2.7		-

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying option awards and the quoted price of the Company's common stock for the options that were in-the-money at December 31, 2011. During the years ended December 31, 2011, 2010 and 2009, no stock options were exercised.

As of December 31, 2011, the total compensation cost that was not yet recognized related to stock options granted to employees under our stock option plans was approximately $37 thousand, net of estimated forfeitures. This cost will be amortized on a straight-line basis over a weighted-average period of 0.2 years and will be adjusted for subsequent changes in estimated forfeitures. The total fair value of shares vested during the years ended December 31, 2011, 2010 and 2009 was $17 thousand, $0.2 million and $0.2 million, respectively.

Restricted Stock Awards and Units

Under the 1997 and 2004 Plans, we awarded restricted stock awards and units to our non-officer directors and certain senior management personnel. The awards typically vest over a three or five year period. Compensation expense is measured as the market price of the stock awards on the grant date, and is recognized over the specified vesting periods.

The table below presents the activity of restricted stock awards and units for the year ended December 31, 2011:

			Weighted Average
			Grant Date
	Shares		Fair Value

Nonvested at January 1, 2011	300		$	718.00
Changes during the year:
Granted	1,080,841			14.55
Forfeited	(12,547	)		14.71
Vested	(53,290	)		12.50
Nonvested at December 31, 2011	1,015,304			14.86

Vested and expected to vest at December 31, 2011	1,015,304			14.86

As of December 31, 2011, there was $12.7 million of total unrecognized compensation cost related to restricted stock awards and units that is expected to be recognized over a weighted-average period of 4.2 years.

Performance Shares and Stock Appreciation Rights

In 2008, we established a Long Term Incentive Plan (“LTIP”) that covered certain executive and senior management personnel. The LTIP was comprised of two components: performance shares and stock appreciation rights (“SARs”). All performance shares and SARs awarded under the LTIP were granted from the 2004 Plan.

No performance shares or SARs were granted under the LTIP during 2011.

Performance Shares

Performance shares granted under the LTIP vested based on both market and service conditions. Market conditions required attainment of specified market-based conditions tied to the market value of our common stock. The service condition required employees to be employed continuously with the Company through March 12, 2011. The fair value of the grant, which was based on the market value of the stock on the grant date, was recognized as compensation over the service period, so long as the grantee met the service condition.

The table below presents activity of performance shares for the year ended December 31, 2011:

			Weighted Average
			Grant Date
	Shares		Fair Value

Nonvested at January 1, 2011	2,442		$	377.60
Changes during the year:
Vested	(531	)		377.60
Forfeited	(1,911	)		377.60
Nonvested at December 31, 2011	-

Stock Appreciation Rights

SARs granted under the LTIP required the achievement of the same market and service conditions as the performance shares described above. Similar to the performance shares, the fair value of the SARs granted were recognized as compensation over the service period, so long as the grantee met the service condition.

Upon exercise of SARs, for each SAR exercised, the grantee was entitled to receive value equal to the difference between the market value of a share on the date of exercise minus the market value of a share on the date of grant. No cash was awarded upon exercise and no fractional shares were issued or delivered.

As the Company's SARs plan is a stock-settled SAR, this plan is an equity-classified award. As such, the financial and income tax accounting for this type of award is identical to that of a nonqualified stock option plan. Therefore, the grant date fair value for all SARs issued under the SARs plan is determined at the grant date using the same method as would be used for determining the fair value of a grant of a nonqualified stock option, which has historically been the Black-Scholes formula.

The fair value of SARs granted to employees was estimated using the Black-Scholes option pricing formula.

The table below presents activity of SARs for the year ended December 31, 2011:

			Weighted Average
	Shares		Exercise Price

Outstanding at January 1, 2011	4,608		$	377.60
Changes during the year:
Forfeited	(4,608	)		377.60
Outstanding at December 31, 2011	-