On January 1, 2003, Gel Inc. granted a maximum of 900 stock options to selected employees. The options are exercisable beginning in 2007. The fair value of one option is estimated to be $2. The options vest based on the extent to which Gel's sales increases from its 2002 base level: 500 shares vest if sales in 2006 increased 15% over 2002 sales 750 shares vest if sales in 2006 increased 25% over 2002 sales 900 shares vest if sales in 2006 increased 40% over 2002 sales At December 31, 2003, Gel's management anticipates: (1) no forfeitures, and (2) based on 2003 results, the firm will meet the 15% performance target. At December 31, 2004, Gel's management anticipates: (1) 5% total forfeitures, regardless of the performance target reached, and (2) based on 2004 results, the firm will meet the 25% performance target. Compute compensation expense for 2004.