Stock-Based Compensation

9 Months Ended

Sep. 30, 2011

Stock-Based Compensation [Abstract]

STOCK-BASED COMPENSATION

13. STOCK-BASED COMPENSATION

     Stock Options and Employee Stock Purchase Plan

     During the third quarter of 2011, 3,000 stock options were awarded to an employee. The value of these options was $15,630. The stock options vest in 33⅓% increments over a three year period and expire August 10, 2021. As of September 30, 2011, 628,000 stock options are outstanding and 338,000 stock options remain unvested.

     For the third quarter of 2011, employees purchased a total of 23,998 shares of common stock through the employee stock purchase plan (“ESPP”) at a weighted average price of $4.18 per share. The Company recorded pre-tax stock-based compensation expense for the ESPP and for stock options totaling $75,000 and $100,000 for the three months ended September 30, 2010 and 2011, respectively, and $199,000 and $272,000 for the nine months ended September 30, 2010 and 2011, respectively.

     The fair value of the right (option) to purchase shares under the ESPP is estimated on the date of grant (January 1, 2011) associated with the four quarterly purchase dates using the following assumptions:

	2010			2011
Dividend yield		0	%		0	%
Expected volatility		70	%		29	%
Risk-free interest rate		0.08%, 0.18%, 0.31%, 0.45	%		0.15%, 0.19%, 0.24%, 0.29	%
Expected life (years)		.25, .50, .75, 1			.25, .50, .75, 1

     Expected volatilities are based on the historical volatility during the previous twelve months of the underlying common stock. The risk-free rate for the quarterly purchase periods is based on the U.S. Treasury yields in effect at the time of grant (January 1). The expected life of the ESPP grants represents the calendar quarters from the grant date (January 1) to the purchase date (end of each quarter).

     Common Stock Grants

     The Company, from time to time, issues shares of restricted common stock to certain officers, directors and key employees of the Company from its stock benefit plans. The restricted stock issued to officers and key employees vest in either 25% or 33⅓% increments over four or three year periods, respectively. On September 1, 2011, L. William Heiligbrodt was appointed to serve as a full-time executive officer as the Vice Chairman of the Board of Directors of the Company. In connection with his appointment, Mr. Heiligbrodt was granted 22,500 shares of common stock valued at $130,725 which vest over a three year period. Related to the vesting of restricted stock awards previously awarded to our officers and employees, the Company recorded $366,000 and $330,000 in pre-tax compensation expense, included in general, administrative and other expenses, for the three months ended September 30, 2010 and 2011, respectively, and $977,000 and $1,081,000 in pre-tax compensation expense for the nine months ended September 30, 2010 and 2011, respectively.

     Effective March 22, 2010, and as subsequently revised on July 14, 2010, the Board of Directors approved a Director Compensation Policy in which the directors no longer have an option to elect to receive all or a portion of their fees in stock. Consequently, all meeting fees after March 22, 2010 have been paid in cash. A new director joined the Board of Directors during the third quarter of 2011, at which time he was granted 19,193 shares valued in total at $100,000. One-half of those shares vested immediately; the remainder vest over two years. The Company recorded $66,000 and $160,000 in pre-tax compensation expense, included in general, administrative and other expenses, for the three months ended September 30, 2010 and 2011, respectively, and $392,000 and $503,000 in pretax compensation expense for the nine months ended September 30, 2010 and 2011, respectively, related to the director fees, annual retainers and stock compensation amortization.

     As of September 30, 2011, the Company had $2.1 million of total unrecognized compensation costs related to unvested restricted stock awards, which are expected to be recognized over a weighted average period of approximately 1.8 years.

     Cash Dividends

     On May 17, 2011, our Board of Directors approved the initiation of a quarterly cash dividend policy for our common stock. The Board declared a quarterly dividend of $0.025 per share, totaling approximately $460,000, which was paid on September 1, 2011 to record holders of our common stock as of August 12, 2011. For the nine months ended September 30, 2011, the Company has declared dividends of $0.05 per share, totaling $920,000. The Company has a dividend reinvestment program so that stockholders may elect to reinvest their dividends into additional shares of the Company’s common stock.