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NOTE 9 Stock Option/Stock Issuance Plan
 12 Months Ended
Dec. 31, 2011
Notes to Financial Statements  
Stock Option/Stock Issuance Plan

NOTE 9 — Stock Option/Stock Issuance Plan

 

The Company has three Stock Option Plans: the 1995 Stock Option/Stock Issuance Plan (the “1995 Plan”), the 1999 Stock Plan (the “1999 Plan”), and the 2004 Equity Incentive Plan (the “2004 Plan”).

 

The 1995 Plan

The 1995 Plan provided for the grant of incentive stock options and nonstatutory stock options to employees, directors, and consultants of the Company. The Company granted incentive stock options and nonstatutory stock options at exercise prices per share equal to the fair market value per share of common stock on the date of grant. The vesting and exercise provisions were determined by the Board of Directors, with a maximum term of ten years. Upon ratification of the 2004 Plan by the shareholders in June 2004, shares in the 1995 Plan that had been reserved but not issued, as well as any shares issued that would otherwise return to the 1995 Plan as a result of termination of options or repurchase of shares, were added to the shares reserved for issuance under the 2004 Plan. The 1995 Plan expired on April 28, 2005. No additional grants will be made from the 1995 Plan. In 2010 the shares in the 1995 Plan were cancelled and transferred to the 2004 Plan. 

 

Information with respect to the 1995 Plan is summarized as follows:

 

     Outstanding Options
  Options
Available
For Grant		  Number
of Shares		  Weighted
Average
Price Per Share
Balance at December 31, 2008  —   375,695  $18.61
  Canceled  74,350   (74,350) $16.74
  Transferred to 2004 Plan  (74,350)  —    
Balance at December 31, 2009  —   301,345  $19.07
  Canceled  301,345   (301,345) $19.07
  Transferred to 2004 Plan  (301,345)  —    
Balance at December 31, 2010  —   —    
            

 

The 1999 Plan

The 1999 Plan provided for the grant of nonstatutory stock options to employees, directors, and consultants of the Company. The Company grants nonstatutory stock options at an exercise price per share equal to the fair market value per share of common stock on the date of grant. The vesting and exercise provisions are determined by the Board of Directors, with a maximum term of ten years. The 1999 Plan expired on June 16, 2009.

 

Information with respect to the 1999 Plan is summarized as follows:

 

     Outstanding Options
  Options
Available
For Grant		  Number
of Shares		  Weighted
Average
Price Per Share
Balance at December 31, 2008  22,065   106,275  $28.02
  Canceled  46,100   (46,100) $21.25
  Options not granted at Plan expiration  (68,165)  —    
Balance at December 31, 2009  —   60,175  $33.20
  Canceled  60,175   (60,175) $33.20
  Options not granted at Plan expiration  (60,175)  —    
Balance at December 31, 2010  —   —    
            

 

 

The 2004 Plan

The 2004 Plan provides for the grant of incentive stock options, nonstatutory stock options, restricted stock, stock appreciation rights, and performance awards, to employees, directors, and consultants of the Company. Upon ratification of the 2004 Plan by the shareholders in June 2004, shares in the 1995 Plan that had been reserved but not issued, as well as any shares issued that would otherwise return to the 1995 Plan as a result of termination of options or repurchase of shares, were added to the shares reserved for issuance under the 2004 Plan. The Company grants incentive stock options and non-statutory stock options at an exercise price per share equal to the fair market value per share of common stock on the date of grant. The vesting and exercise provisions are determined by the Board of Directors, with a maximum term of ten years. 

 

Information with respect to the 2004 Plan is summarized as follows:

     Outstanding Options
  Options
Available
For Grant		  Number
of Shares		  Weighted
Average
Price Per Share
Balance at December 31, 2008  175,377   545,534  $10.28
  Increase in shares authorized  129,196   —    
  Transferred from 1995 Plan  74,350   —    
  Granted  (492,181)  492,181  $2.37
  Exercised  —   (1,360) $1.96
  Canceled  187,008   (187,016) $7.74
Balance at December 31, 2009  73,750   849,339  $6.27
  Increase in shares authorized  151,550   —    
  Transferred from 1995 Plan  301,345   —    
  Granted  (858,950)  858,950  $3.00
  Exercised  —   (12,951) $1.96
  Canceled  502,548   (502,548) $2.15
Balance at December 31, 2010  170,243   1,192,790  $2.88
  Increase in shares authorized  152,079   —    
  Granted  (305,450)  305,450  $1.92
  Exercised  —   (14,451) $2.06
  Canceled  73,699   (73,699) $2.42
Balance at December 31, 2011  90,571   1,410,090  $2.70
            

 

 

The 2004 Plan provides for an annual increase in the number of shares authorized under the plan to be added on the first day of each fiscal year equal to the lesser of 200,000 shares, four percent of the outstanding shares on that date, or a lesser amount as determined by the Board of Directors. On January 1, 2012, 2011, and 2010, a total of 193,283, 152,079, and 151,550 additional shares, respectively, became available for grant from the 2004 Plan. As of March 2, 2012, 151,300 options at a weighted average grant price of $2.32 per share have been granted from the 2004 Plan subsequent to December 31, 2011.

 

The outstanding and exercisable options at December 31, 2011 presented by price range are as follows:

  Options Outstanding  Options Exercisable
Range of
Exercise
Prices		 Number of
Options Outstanding		  Weighted Average Remaining Life (Years)  Weighted
Average Exercise Price		  Number of Options Exercisable  Weighted Average Exercise Price
$1.68 - $1.82  181,798   9.17  $1.82   35,474  $1.81
$1.95 - $2.12  254,946   7.75  $1.98   165,646  $1.98
$2.18 - $2.36  73,200   8.75  $2.28   30,925  $2.36
$2.74 - $3.04  772,878   8.58  $3.01   506,825  $3.02
$3.15 - $4.48  118,428   7.75  $3.37   116,628  $3.37
$6.90 - $7.20  4,000   7.01  $4.00   3,563  $7.01
$10.00 - $11.70  4,190   4.75  $11.07   4,190  $11.07
$15.00  650   3.00  $15.05   650  $15.05
$1.68 - $15.00  1,410,090   8.42  $2.70   863,901  $2.86