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12. Shareholders Equity
Stock options: On May 12, 2011, our shareholders approved and adopted the 2011 Stock Compensation Plan (the 2011 Plan). The 2011 Plan authorizes the granting of awards in any of the following forms: (i) stock options, (ii) stock appreciation rights, and (iii) other share-based awards, including but not limited to restricted stock, restricted stock units or performance shares and expires on the earlier of May 12, 2021 or the date that all shares reserved under the 2011 Plan are issued or no longer available. The 2011 Plan provides for the issuance of up to 700 shares of Common Stock pursuant to awards granted under the 2011 Plan. Options granted to employees typically vest over two years while grants to non-employee directors vest in six months. As of October 1, 2011, 15 options were outstanding under the 2011 Plan. On August 2, 2011, we granted 15 stock options to non-employee directors with an exercise price of $4.36 per share, a vesting period of six months and a weighted average fair value of $3.87 per share. Our 2006 Stock Option Plan (the 2006 Plan) expired on June 30, 2011, but the options outstanding under the 2006 Plan continue to be exercisable in accordance with their terms. As of October 1, 2011, 577 options were outstanding to employees and non-employee directors under the 2006 Plan. Our Restated 1997 Stock Option Plan (the 1997 Plan) has expired, but the options outstanding under the expired 1997 Plan continue to be exercisable in accordance with their terms. As of October 1, 2011, options to purchase an aggregate of 33 shares were outstanding under the 1997 Plan. Options granted to employees typically vest over two years while grants to non-employee directors vest in six months. On February 24, 2011, we granted 28 stock options from our 2006 Plan to employees with an exercise price of $4.25 per share, a vesting period of one year and a weighted average fair value of $3.50 per share. On May 12, 2011, we granted 30 stock options from our 2006 Plan to non-employee directors with an exercise price of $4.69 per share, a vesting period of six months and a weighted average fair value of $4.20 per share.
The following table summarizes the assumptions used to estimate the fair value of stock options granted during the first through third quarters of 2011 using the Black-Scholes Model:
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Q1 2011
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Q2 2011
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Q3 2011
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Expected dividend yield
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0.0
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%
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0.0
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%
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0.0
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%
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Expected stock price volatility
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97.9
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%
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97.7
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%
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96.1
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%
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Risk-free interest rate
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2.9
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%
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3.2
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%
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2.7
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%
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Expected life of options
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7 years
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10 years
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10 years
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Preferred Stock: Our amended Articles of Incorporation authorize two million shares of Preferred Stock that may be issued from time to time in one or more series having such rights, powers, preferences and designations as the Board of Directors may determine. To date no such preferred shares have been issued.
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