Stock Plans and Other Incentives

9 Months Ended

Sep. 30, 2011

Stock Plans and Other Incentives [Abstract]

Stock Plans and Other Incentives

9.    Stock Plans and Other Incentives

The Company has adopted certain incentive plans for the purpose of attracting and retaining the Company’s directors, officers and employees by having the ability to issue options, restricted stock units (“RSUs”) or stock awards. Awards granted under the Company’s incentive plans expire ten years from the date of grant and vest over periods ranging generally from three to five years for employees.

Option Awards

The following table presents option activity and other plan data for the nine months ended September 30, 2011 and 2010:

	For the Nine Months Ended September 30,
	2011				2010
			Weighted-				Weighted-
			Average				Average
			Exercise				Exercise
	Options		Price		Options		Price
Outstanding at beginning of period		680,896	$	8.73		473,620	$	8.91
Granted		—	$	—		225,000	$	8.03
Cancelled through cash settlement		—	$	—		—	$	—
Forfeited/cancelled/expired		—	$	—		—	$	—
Outstanding at end of period		680,896	$	8.73		698,620	$	8.63
Options exercisable at end of period		378,896	$	8.92		319,620	$	8.45
Options exercisable which can be settled in cash		70,896	$	4.81		88,620	$	4.73

Stock Plans and Other Incentives (continued)

Certain outstanding options allow the option holder to receive from the Company, in cancellation of the holder’s option, a cash payment with respect to each cancelled option equal to the amount, if any, by which the fair market value of the share of stock underlying the option exceeds the exercise price of such option. The Company accounts for these options as liability awards. This liability is adjusted at the end of each reporting period to reflect (1) the net cash payments to option holders made during each period, (2) the impact of the exercise and expiration of options and (3) changes in the market price of the Company’s common stock. Changes in the settlement value of option awards treated under the liability method are reflected as income or expense in the statements of operations.

At September 30, 2011, the liability for option cancellations was approximately $287,000 based upon the difference in the closing stock price of the Company at September 30, 2011 of $8.86 per share and the individual exercise prices of the outstanding 70,896 “in-the-money” options that were accounted for as liability awards at that date. At December 31, 2010, the liability for option cancellations was approximately $158,000 based upon the difference in the closing stock price of the Company at December 31, 2010 of $7.03 per share and the individual exercise prices of the outstanding 70,896 “in-the-money” options that were accounted for as liability awards at that date. The Company recorded a reduction to compensation expense of approximately $76,000 for the three months ended September 30, 2011 and compensation expense of $7,000 for the three months ended September 30, 2010, and compensation expense of $130,000 and $21,000 for the nine months ended September 30, 2011 and 2010, respectively, in general and administrative expenses in the statements of operations related to the respective changes in the amount of the liability for option cancellations.

RSU Awards

The following table presents the changes in RSUs outstanding for the nine months ended September 30, 2011 and 2010:

	For the Nine Months Ended
	September 30,
	2011			2010
Outstanding at beginning of period		523,479			507,668
Granted		243,499			283,355
Common stock delivered (A)(B)		(177,828	)		(275,559	)
Forfeited		—			(1,800	)
Outstanding at end of period		589,150			513,664
Intrinsic value at September 30, 2011 and 2010, respectively (C)	$	5,220,000		$	3,282,000

(A)	Includes (i) 33,758 shares which were used to settle minimum employee withholding tax obligations for 14 employees of approximately $251,000 in the first quarter of 2011 (ii) 9,054 shares which were used to settle minimum employee withholding tax obligations for two employees of approximately $90,000 in the second quarter of 2011 and (iii) 1,207 shares which were used to settle minimum employee withholding tax obligations for one employee of approximately $11,000 in the third quarter of 2011. A net of 2,126 and 133,809 shares of common stock were delivered in the three and nine months ended September 30, 2011, respectively.
(B)	Includes (i) 17,431 shares which were used to settle minimum employee withholding tax obligations for 12 employees of approximately $105,000 in the first quarter of 2010, (ii) 16,870 shares which were used to settle minimum employee withholding tax obligations for 63 employees of approximately $105,000 in the second quarter of 2010 and (iii) 1,207 shares which were used to settle minimum employee withholding tax obligations for one employee of approximately $8,000 in the third quarter of 2010. A net of 2,126 and 240,051 shares of common stock were delivered in the three and nine months ended September 30, 2010, respectively.
(C)	For purposes of this calculation, the Company’s closing stock prices were $8.86 and $6.39 per share on September 30, 2011 and 2010, respectively.

Stock Plans and Other Incentives (continued)

In March 2011, an aggregate of 214,135 RSUs were granted to employees, which RSUs vest one-third a year over three years and had a weighted average grant date fair value of $7.41 per RSU (which was determined based on the closing stock price of the Company’s common stock on the applicable date of grant). In February and July 2010, an aggregate of 185,500 RSUs and 75,000 RSUs respectively, were granted to employees which vest one-third a year over three years and have a grant date fair value of $5.97 and $6.52 respectively, per RSU (which was determined based on the closing price of the Company’s common stock on the applicable date of grant). The awards granted in 2011 and 2010 are treated as equity awards and the grant date fair value is charged to compensation expense at the corporate level on a straight-line basis over the vesting periods.

During the nine months ended September 30, 2011, an aggregate of 29,364 RSUs were granted to non-employee directors (with an average grant date fair value of $8.09 per RSU) related to the equity component of their compensation for the three months ended December 31, 2010, March 31, 2011 and June 30, 2011. During the nine months ended September 30, 2010, an aggregate of 23,355 RSUs were granted to non-employee directors (with an average grant date fair value of $6.07 per RSU) related to the equity component of their compensation for the three months ended December 31, 2009, March 31, 2010 and June 30, 2010. In each case, the grant date fair value was determined as of the last trading day of the quarter for which the RSUs were being received as compensation. The RSUs are immediately vested, but are not deliverable to non-employee directors until six months after termination of their service as a director.

Option and RSU Expense Information

The Company recorded non-cash compensation expense of approximately $522,000 and $409,000, including approximately $69,000 and $63,000 related to non-employee director equity compensation, for the three months ended September 30, 2011 and 2010, respectively, related to all stock options and RSUs accounted for as equity awards, as a component of general and administrative expenses in the statement of operations. For the nine months ended September 30, 2011 and 2010, the Company recorded non-cash compensation expense of approximately $1,537,000 and $1,180,000, respectively, including approximately $226,000 and $159,000, respectively, related to non-employee director equity compensation.