Stock-based Compensation

9 Months Ended

Sep. 30, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

Stock-based Compensation

The fair value of each stock option grant was established at the date of grant using the Black-Scholes option pricing model. The Black-Scholes model used the following weighted-average assumptions for options granted during the nine months endedSeptember 30, 2012 and 2011, respectively: risk-free interest rates of 1.7% and 3.0%; volatility factors of the expected market price of the Company's common stock of 48% and 46%; assumed forfeiture rates of 9.04% and 1.65%; weighted-average expected lives of the options of 7.5 years for both September 30, 2012 and September 30, 2011; and no cash dividends. Using these assumptions, the weighted-average fair value of options granted for the nine months endedSeptember 30, 2012 and 2011 was $5.99 and $6.43 per option, respectively. In the first nine months of 2012, the Company granted 241,575 options to purchase shares of the Company's stock at exercise prices ranging from $10.86 to $12.67 per share.

The Company recorded stock-based compensation expense of approximately $752,000 and $896,000 during the nine months ended September 30, 2012 and September 30, 2011, respectively. In accordance with Financial Accounting Standards Board (FASB) guidance on stock-based payments, during the first quarters of 2012 and 2011 the Company reversed $230,000 and $165,000, respectively, of expense that had been recorded in prior periods as a result of the reconcilement of projected option forfeitures to actual option forfeitures for all stock options granted during the first quarters of 2008 and 2007, respectively.