10.                                             Employee Stock Plans

Amended and Restated 2004 Stock Incentive Plan

As of September 30, 2012, 37,240 shares of common stock are reserved for issuance upon the exercise of outstanding options under the Company’s Amended and Restated 2004 Stock Incentive Plan (the “A&R 2004 Plan”).  All outstanding options are fully vested.  All options expire 10 years from the date of grant. No further awards are permitted to be issued under the A&R 2004 Plan.

Stock Options

There were no stock options exercised with respect to the Company’s stock under the A&R 2004 Plan for either the three or nine months ended September 30, 2012.

2010 Stock Incentive Plan

In May 2010, the Company’s Board of Directors and stockholders adopted the 2010 Stock Incentive Plan (the “2010 Plan”).  The 2010 Plan provides for the issuance of nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock awards and restricted stock units, any of which may be performance-based, and for incentive bonuses, which may be paid in cash or stock or a combination of both, to eligible employees, officers, non-employee directors and other service providers to the Company and its subsidiaries.  A maximum of 2,130,000 shares of common stock may be issued pursuant to all awards under the 2010 Plan.

Restricted Stock Awards

A summary of restricted stock activity for the nine months ended September 30, 2012 is as follows:

The fair value of the Company’s restricted stock awards is the closing stock price on the date of grant. The Company recognized $265 and $827 of compensation expense related to restricted stock awards granted for the three and nine months ended September 30, 2012, respectively.  The unrecognized compensation expense calculated under the fair value method for shares expected to vest as of September 30, 2012 was approximately $1,950 and is expected to be recognized over a weighted average period of 2.19 years.

Unrestricted Stock

The Company granted performance based awards under the 2010 Plan in the first quarter of 2012 which are subject to performance conditions.  Upon meeting the prescribed performance conditions, employees will be issued unrestricted shares in the first quarter of 2013.  In accordance with ASC 718 such awards are being expensed over 2012, from the date of grant through the requisite service period.  The fair value per share of the awards is the closing stock price on the date of grant, which was $12.94. The Company recognized $259 and $603 of compensation expense related to the awards in the three and nine months ended September 30, 2012, respectively. The unrecognized compensation expense calculated under the fair value method for shares that were, as of September 30, 2012, expected to be earned through the requisite service period was approximately $259 and is expected to be recognized throughout 2012.

Restricted Stock Units

Restricted stock units (‘‘RSUs’’) are issued to the non-employee members of the board of directors and carry dividend equivalent rights but do not carry voting rights. Each RSU represents the right to receive one share of the Company’s common stock and are subject to time based vesting restrictions. Participants are not required to pay any consideration to the Company at either the time of grant of a RSU or upon vesting.

A summary of RSU activity for the nine months ended September 30, 2012 is as follows:

Vested RSUs are ‘‘settled’’ by the delivery to the participant or a designated brokerage firm of one share of common stock per vested RSU as soon as reasonably practicable following a termination of service of the participant that constitutes a separation from service, and in all events no later than the end of the calendar year in which such termination of service occurs or, if later, two and one-half months after such termination of service.