Stock-Based Compensation

3 Months Ended

Mar. 31, 2013

Share-based Compensation [Abstract]

Stock-Based Compensation

Stock-Based Compensation

In March 2013, the Compensation Committee of the Company's Board of Directors approved the grant of an aggregate of 315,088 shares of restricted stock under the 2007 Incentive Stock Plan, as amended ("2007 Plan"), to certain employees, members of the Board of Directors and service providers. Restricted stock grants made to employees are in lieu of a long-term incentive plan component in the Company's bonus plan for those individuals who receive shares of restricted stock. Compensation expense is measured based on the fair value of the stock-based awards on the grant date, as measured by the NASDAQ closing price for the Company's common stock.

Compensation expense is recognized in the consolidated income statement on a straight-line basis over the requisite service period, which is the vesting period. The restricted stock grants made to employees and service providers in 2013 vest in equal annual installments over a three year period from the grant date. The restricted stock grants to the Company's directors vest one year from the grant date.

The Company allows grantees to forego the issuance of shares to meet any applicable income tax withholding due as a result of the vesting of restricted stock. Such shares are returned to the unissued shares of the Company's common stock. During the three months ended March 31, 2013, 1,716 shares were foregone by employees in connection with income tax withholding obligations.

Restricted stock activity under the Company's 2007 Plan was as follows for the three months ended March 31, 2013:

(shares)	Employees		Directors	Total
Balance, January 1, 2013	503,440		458,000	961,440
Granted	153,088		162,000	315,088
Forfeited	(8,944	)	—	(8,944	)
Reduced for income tax obligations	(1,716	)	—	(1,716	)
Balance, March 31, 2013	645,868		620,000	1,265,868
Vested	288,320		449,000	737,320
Non-vested	357,548		171,000	528,548

The Company has recognized compensation expense related to restricted shares of $1.2 million and $0.7 million for the three months ended March 31, 2013 and 2012, respectively. Unearned compensation expense related to restricted shares at March 31, 2013 is $7.5 million, which is net of an estimated 5% forfeiture rate for employees and service providers. This amount will be recognized over the remaining vesting period of the restricted shares.