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Shareholders' Equity
 6 Months Ended
Jun. 30, 2012
Shareholders' Equity Common Stock [Abstract]  
Shareholders' Equity Common Stock
9) 
Shareholders' Equity
 
Common Stock
 
During the six months ended June 30, 2012, the Company issued 51,070 shares of common stock.  These shares consist of (a) 30,000 shares issued to officers of the Company pursuant to the 2001 Stock Compensation Plan, (b) 20,000 shares issued as a result of options being exercised by a former director of the Company and (c) a net of 1,070 shares issued as a result of the exercise of options by an employee of the Company.

The following table details the changes in common stock during the three months ended June 30, 2012:

(Amounts in thousands, except for share amounts)
 
 
 
 
 
 
 
 
Additional
 
 
Common Stock
 
 
Paid-In
 
 
Shares
 
 
Amount
 
 
Capital
 
 
 
 
 
 
 
 
 
 
 Balance January 1, 2012
 
 
27,409,908
 
 
$
274
 
 
$
122,523
 
 2001 stock compensation plan
 
 
30,000
 
 
 
1
 
 
 
95
 
 Exercise of employee stock options
 
 
1,070
 
 
 
--
 
 
 
--
 
 Exercise of outside director options
 
 
20,000
 
 
 
--
 
 
 
55
 
 Expense of employee options vesting
 
 
--
 
 
 
--
 
 
 
2
 
 Expense of outside director warrants vesting
 
 
--
 
 
 
--
 
 
 
32
 
 Balance June 30, 2012
 
 
27,460,978
 
 
$
275
 
 
$
122,707
 

Employee Stock Option Plans

All options outstanding at June 30, 2012 were granted pursuant to the U.S. Energy Corp. 2001 Incentive Stock Option Plan (the "2001 ISOP").  The 2001 ISOP had a term of 10 years, and expired on December 6, 2011.  Options issued prior to that date will survive to their expiration date which does not exceed a ten year period from date of grant and are subject to vesting and forfeiture provisions.

During the three and six months ended June 30, 2012, we recorded $2,000 in compensation expense for employee stock options.  As of June 30, 2012, there was no unrecognized compensation expense related to employee stock option awards.  As a result of the exercise of 4,167 options held by a former employee, 1,070 shares of common stock were issued during the six months ended June 30, 2012.

Director Option Plans

From time to time we issue stock options to non-employee directors for services.  During the six months ended June 30, 2012, we issued 70,000 options to non-employee directors.  The options were issued at the closing price of $2.85 on the date of grant; 60,000 options vest over a three year period and expire ten years from the date of grant or one year after the Board member no longer serves on the Board and 10,000 options vested immediately and expire ten years from the date of grant or one year after the Board member no longer serves on the Board.  The options were valued under Black-Scholes using a risk free interest rate of 1.13% to 1.41%, expected life of 5 to 6 years and expected volatility of 62.75% to 63.59%.

During the three and six months ended June 30, 2012, we recorded $15,000 and $37,000, respectively, in expense for options issued to non-employee directors.  We will recognize an additional $130,000 in expense over the vesting period of the outstanding options.  During the six months ended June 30, 2012, we issued 20,000 shares of common stock to a former director of the Company as the result of the exercise of 20,000 outstanding options.

The following table represents the activity in employee stock options and non-employee director stock options for the six months ended June 30, 2012:

 
June 30, 2012
 
 
Employee Stock Options
 
 
Stock Purchase Warrants
 
 
 
 
 
Weighted
 
 
 
 
 
Weighted
 
 
 
 
 
Average
 
 
 
 
 
Average
 
 
 
 
 
Exercise
 
 
 
 
 
Exercise
 
 
Options
 
 
Price
 
 
Warrants
 
 
Price
 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding balance at December 31, 2011
 
 
2,318,399
 
 
$
3.94
 
 
 
210,000
 
 
$
3.10
 
Granted
 
 
--
 
 
$
--
 
 
 
70,000
 
 
$
2.85
 
Forfeited
 
 
--
 
$
--
 
 
 
--
 
 
$
--
 
Expired
 
 
(105,000)
 
 
$
4.39
 
 
 
(120,000
)
 
$
3.05
 
Exercised
 
 
(4,167
)
 
$
2.52
 
 
 
(20,000
)
 
$
2.52
 
Outstanding at June 30, 2012
 
 
2,209,232
 
 
$
3.92
 
 
 
140,000
 
 
$
3.10
 
Exercisable at June 30, 2012
 
 
2,209,232
 
 
$
3.92
 
 
 
63,335
 
 
$
3.01
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted Average Remaining Contractual Life - Years
 
 
 
 
 
 
4.53
 
 
 
 
 
 
 
8.50
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Aggregate intrinsic value of options / warrants outstanding
 
 
 
 
 
$
-
 
 
 
 
 
 
$
-