Equity-Based Compensation

6 Months Ended

Jun. 30, 2012

Equity-Based Compensation [Abstract]

Equity-Based Compensation

9. Equity-Based Compensation

Equity-based compensation for the periods presented in the following table is primarily included in the line item “Selling, general and administrative” in ICG’s Consolidated Statements of Operations. The following table provides additional information related to ICG’s equity-based compensation (in thousands, except weighted average years):

	Three Months Ended June  30,				Six Months Ended June  30,				Unrecognized Equity-Based Compensation as of June 30, 2012		Weighted Average Years  Remaining of Equity-Based Compensation as of  June 30, 2012
	2012		2011		2012		2011
Stock Appreciation Rights	$	618	$	526	$	1,226	$	1,034	$	5,268	2.6
Restricted Stock		713		42		1,396		77		9,624	3.4
Deferred Stock Units		87		268		246		353		231	0.7
Equity-Based Compensation	$	1,418	$	836	$	2,868	$	1,464	$	15,123
Equity-Based Compensation for Consolidated Core Companies		518		210		714		316		3,675	3.2
Equity-Based Compensation	$	1,936	$	1,046	$	3,582	$	1,780	$	18,798

Stock Appreciation Rights (SARs)

Each SAR represents the right of the holder to receive, upon exercise of that SAR, shares of ICG Common Stock equal to the amount by which the fair market value of a share of that Common Stock on the date of exercise of the SAR exceeds the base price of the SAR. The base price is determined by the NASDAQ closing price of ICG’s Common Stock on the date of grant (or the closing price on the next trading day if there are no trades in ICG’s stock on the date of grant). The fair value of each SAR is estimated on the grant date using the Black-Scholes option-pricing model. SARs generally vest over four years, with 25% vesting on the first anniversary of the grant date and the remaining 75% vesting equally each month over the subsequent 36 months.

During the three and six months ended June 30, 2012, ICG granted 259,625 SARs to employees at a weighted-average base price of $9.25 per share and a weighted-average fair value of $4.90 per share. During the three and six months ended June 30, 2011, ICG granted 275,625 SARs to employees and a non-management director at a weighted average base price of $12.15 per share and a weighted-average fair value of $6.58 per share. There were no SARs exercised in the three and six months ended June 30, 2012. During the three and six months ended June 30, 2011, 17,188 and 98,057 SARs were exercised, respectively. Those exercises resulted in the issuance of 1,576 and 19,998 shares of ICG’s Common Stock during the three and six months ended June 30, 2011, respectively. During the three and six months ended June 30, 2012, 1,598 SARs were forfeited. There were no forfeitures during the three and six months ended June 30, 2011. There were 4,405,418 and 4,147,391 SARs outstanding at June 30, 2012 and December 31, 2011, respectively. The aggregate intrinsic values of the SARs outstanding at June 30, 2012 and December 31, 2011 were $7.5 million and $2.1 million, respectively.

Stock Options

The fair value of each stock option is estimated on the grant date using the Black-Scholes option-pricing model. Stock options generally vest ratably over four years: 25% vests on the first anniversary of the grant date and the remaining 75% vests equally each month over the subsequent 36 months. There were no stock options granted during the three and six months ended June 30, 2012 and 2011. During the three and six months ended June 30, 2012, 3,700 and 30,500 stock options were exercised, respectively. During the three and six months ended June 30, 2011, 3,125 and 3,425 stock options were exercised, respectively. During the three and six months ended June 30, 2012, 600 and 8,000 stock options expired, respectively. During the three and six months ended June 30, 2011, 42,117 and 69,117 stock options expired, respectively. During the three months ended June 30, 2012, 21 stock options were forfeited. There were no forfeitures in the three- and six-month periods ended June 30, 2011. There were 144,687 and 183,208 stock options outstanding as of June 30, 2012 and December 31, 2011, respectively; the aggregate intrinsic values of the stock options outstanding at June 30, 2012 and December 31, 2011 were $0.5 million and $0.3 million, respectively.

SARs and Stock Options Fair Value Assumptions

ICG estimates the grant date fair value of SARs and stock options using the Black-Scholes option-pricing model, which requires the input of highly subjective assumptions. Those assumptions include estimating the expected life of the award and estimating volatility of ICG’s stock price over the expected term. Expected volatility approximates the historical volatility of ICG’s Common Stock over the period commensurate with the expected term of the award. The expected term calculation is based on an average of the award vesting term and the life of the award. The risk-free interest rate is based on the U.S. Treasury yield in effect at the time of grant for an instrument with a maturity that is commensurate with the expected term of the award. Changes in these assumptions, the estimated forfeitures and/or the requisite service period can materially affect the amount of equity-based compensation recognized in ICG’s Consolidated Statements of Operations.

The following assumptions were used to determine the fair value of SARs granted to employees and a non-management director by ICG during the three and six months ended June 30, 2012 and 2011:

	Three and Six Months  Ended June 30,
	2012	2011
Expected volatility	56%	56%
Average expected life of SAR (in years)	6.25	5.25-6.25
Risk-free interest rate	0.92%	1.62-1.97%
Dividend yield	0%	0%

Restricted Stock

During the three months ended June 30, 2012, ICG granted 69,875 shares of restricted stock to its employees. Those shares were valued at $0.6 million on the date of grant and will vest as follows: 12.5% of the award vests on the nine-month anniversary of the grant and the remaining 87.5% vests equally every six months subsequent to the first vesting date. Also during the three months ended June 30, 2012, ICG granted 28,348 shares of restricted stock to executives of one of its consolidated subsidiaries. Those shares were valued at $0.3 million on the date of grant and will vest only upon the achievement of certain performance conditions. During the six months ended June 30, 2012, ICG granted 18,750 shares of restricted stock to certain non-management directors under ICG’s Amended and Restated Non-Management Director Compensation Plan (the “Director Plan”). Those shares were valued at $0.2 million and will vest in the first quarter of 2013. During the three and six months ended June 30, 2011, ICG granted 66,875 shares of restricted stock to its employees. Those shares vest in equal annual installments over four years and were valued at $0.8 million on the date of grant. Also during the three and six months ended June 30, 2011, ICG granted 15,035 shares of restricted stock to executives of one of its consolidated subsidiaries that vest after seven years, with the possibility to accelerate the vesting for the achievement of certain performance conditions. Those shares were valued at $0.2 million on the date of grant. During the three and six months ended June 30, 2012, 62,461 and 68,711 shares of restricted stock vested, respectively. During the six months ended June 30, 2011, 6,250 shares of restricted stock vested. During the three and six months ended June 30, 2012, 375 shares of restricted stock were forfeited. There were no forfeitures during the three and six months ended June 30, 2011. There were 1,273,672 and 1,225,785 shares of restricted stock issued and unvested at June 30, 2012 and December 31, 2011, respectively.

The issuance of shares of restricted stock to executives of one of ICG’s consolidated subsidiaries during the three months ended June 30, 2012 and 2011 is included with the issuances of shares of restricted stock to employees in the line item “Issuance of restricted stock to employees, net of forfeitures” in ICG’s Consolidated Statements of Changes in Equity and the vesting amortization associated with those awards of $0.2 million for the three and six months ended June 30, 2012 is included in the line item “Equity-based compensation expense related to restricted stock” in ICG’s Consolidated Statements of Changes in Equity. The expense associated with those awards of $0.2 million for the three and six months ended June 30, 2012 is included in line item “Equity-Based Compensation for Consolidated Core Companies” in the table above.

Deferred Stock Units (DSUs)

ICG periodically issues DSUs to its non-management directors. Each DSU represents a share of Common Stock into which that DSU will be converted upon the termination of the recipient’s service at ICG. During the six months ended June 30, 2012 and 2011, ICG issued 41,250 DSUs and 60,000 DSUs, respectively, to its non-management directors under the Director Plan; those DSUs were valued at $0.3 million and $0.8 million, respectively, and vest on the one-year anniversary of the grant date. During the six months ended June 30, 2012, 52,500 DSUs vested. During the three and six months ended June 30, 2011, 7,500 DSUs and 39,000 DSUs, respectively, vested.

ICG issues quarterly compensation payments to each non-management director for his service on the Board of Directors and its committees under the Director Plan. Each director has the right to elect to receive those payments in whole or in part in the form of DSUs in lieu of cash. Each participating director receives DSUs representing shares of ICG’s Common Stock with a fair market value equal to the relevant cash fees (with such fair market value determined by reference to the closing Common Stock price reported by NASDAQ on the date these cash fees otherwise would have been paid). Those DSUs vest immediately. The expense for those DSUs is recorded when the fees to which the DSUs relate are earned.

During the three and six months ended June 30, 2012, ICG issued 9,538 and 15,251 DSUs, respectively, to ICG’s non-management directors. During the three and six months ended June 30, 2011, ICG issued 2,297 and 5,734 DSUs, respectively, to ICG’s non-management directors. The expense of $0.1 million and $0.2 million for the three- and six month-periods ended June 30, 2012, respectively, and less than $0.1 million and $0.1 million for the three- and six-month periods ended June 30, 2011, respectively, associated with the quarterly grants for service is included in the line item “Selling, general and administrative” in ICG’s Consolidated Statements of Operations (but is not reflected in the summarized Equity-Based Compensation table above).

Consolidated Core Companies

All of ICG’s consolidated core companies issue equity-based compensation awards to their employees. Those awards are most often in the form of stock options that vest over four years. The fair value of the stock option awards are estimated on the grant date using the Black-Scholes option pricing model. The majority of the stock options vest 25% on the first anniversary of the grant date, and the remaining 75% vest equally each month over the subsequent 36 months. The remaining awards generally vest ratably over four years, with 25% vesting on each anniversary date over that term.