Long-Term Incentive Awards

6 Months Ended

Jun. 30, 2011

Long-Term Incentive Awards [Abstract]

Long-Term Incentive Awards

9. Long-Term Incentive Awards

Stock-based Compensation

     The Company’s 2004 Long-Term Incentive Plan (the “2004 Plan”) provides for the granting of stock options, restricted stock, performance stock awards and other stock-based awards to selected employees and non-employee directors of the Company. At June 30, 2011, approximately 6.8 million shares were available for grant or award under the 2004 Plan, as amended in May 2011.

     During the six months ended June 30, 2011, the Company granted 1.1 million time-based restricted stock awards with a weighted average grant-date fair value per share of $5.01. There were no stock options granted during the six months ended June 30, 2011, respectively. The Company recognized $1.5 million and $2.7 million in stock-based compensation expense during the three and six months ended June 30, 2011, respectively. The Company recognized $1.7 million and $1.8 million in stock-based compensation expense during the three and six months ended June 30, 2010, respectively, which includes a reduction of $0.3 million and $2.1 million due to a change in the Company’s estimated forfeiture rate, respectively.

     On March 6, 2011, the Compensation Committee of the Company’s Board of Directors approved equity grants for certain of its executive officers which consisted of a time-based vesting restricted stock award and a performance based restricted stock award . The grants vest one-third per year on each of the first three anniversaries of the grant date; however, the vesting of the performance grant is contingent upon meeting the established consolidated safety and EBITDA metrics at a weighting of 50% each, with vesting prorated between threshold, target and maximum levels. Threshold, target and maximum performance objectives have been established for each metric, with the officer vesting 33% more shares at the maximum level, 33% less shares at the threshold level, with vesting pro rated between levels, and no shares will be issued with respect to a particular metric if the threshold performance objective is not met with respect to such metric. The target number of performance-based restricted stock issuable under this award if conditions for vesting are met is 479,183 shares. The fair value of these awards was based on the closing price of the Company’s stock on the date of grant.

     The unrecognized compensation cost related to the Company’s unvested stock options and restricted stock grants, including performance-based restricted stock grants as of June 30, 2011, was $1.6 million and $7.2 million, respectively, and is expected to be recognized over a weighted-average period of one year and 2.3 years, respectively.

Liability Retention Awards

     In December 2010, the Compensation Committee of the Company’s Board of Directors approved retention and incentive arrangements for the Company’s Chief Executive Officer, consisting of three separate awards.

     Vesting under each award is conditioned upon continuous employment with the Company from the date of grant until the earlier of a specified vesting date or a change in control of the Company. Subject to the satisfaction of all vesting requirements, awards are payable in cash based on the product of the number of shares of Common Stock specified in the award, the percentage of that number of shares that vest under the award and the average price of the Common Stock for the 90 days prior to the date of vesting (“Average Share Price”).

     The grant date of each of the three awards is January 1, 2011. Vesting of any award and the amount payable under any vested award do not affect vesting or the amount payable under any of the other awards. Subject to vesting, all awards are payable in cash within thirty days of vesting. No shares of common stock are issuable under any of the awards. These awards are accounted for under stock-compensation principles of accounting as liability instruments. The fair value of these awards is remeasured based on the awards’ estimated fair value at the end of each reporting period and will be recorded to expense over the vesting period. At June 30, 2011, the Company’s liability related to these awards was $0.7 million and is included in Other Liabilities on the Consolidated Balance Sheets. Additionally, compensation expense of $0.4 million and $0.7 million was recognized for the three and six months ended June 30, 2011, respectively. The unrecognized compensation cost related to these awards as of June 30, 2011 was $3.5 million and is expected to be recognized over a weighted-average period of 2.6 years.

     The first award is a Special Retention Agreement (the “Agreement”), which provides for a cash payment based on 500,000 shares of the Company’s common stock, subject to vesting. Upon satisfaction of vesting requirements, 100% of the amount under the Agreement becomes vested on December 31, 2013 and the payout will equal the product of 500,000 and the lesser of the Average Share Price and $10.00. If all of the requirements necessary for vesting of this award are not met, no amounts become vested and no amount is payable. The fair value of this award is based on the average price of the Common Stock for the 90 days prior to the end of the quarter or date of vesting.

     The second and third awards are performance awards under the 2004 Plan (“Performance Awards”). Each Performance Award provides for a cash payment, subject to vesting, based on 250,000 shares of the Company’s common stock. Upon satisfaction of vesting requirements, 100% of the first Performance Award will vest on December 31, 2013, and 100% of the second Performance Award will vest on March 31, 2014. Under each Performance Award, vesting is subject to the further requirement that the Average Share Price is at least $5.00. Subject to the satisfaction of the vesting requirements, the payout of each Performance Award shall be equal to the product of (1) 250,000, (2) the Average Share Price or $10.00, whichever is less, divided by $10.00, and (3) the lesser of the Average Share Price or $10.00. If the requirements necessary for vesting of a Performance Award are met, the amount payable in cash under each of the Performance Awards shall be not less than $625,000 and not more than $2,500,000. The fair value of these awards was determined at June 30, 2011 using a Monte Carlo simulation based on the following weighted-average assumptions:

	June 30,
	2011
Dividend Yield		—
Expected Price Volatility		50	%
Risk-Free Interest Rate		0.8	%
Stock Price	$	5.51
Fair Value	$	2.62

     The Company used the historical volatility of its common stock to estimate volatility. The dividend yield assumption was based on historical and anticipated dividend payouts. The risk-free interest rate assumption was based on observed interest rates consistent with the approximate vesting period. The stock price represents the closing price of the Company’s common stock at June 30, 2011.