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 Compensation Committee of the Company’s Board of Directors is responsible for the administration of the Company’s stock incentive plans, which include the balance of shares remaining under the 2007 Long Term Incentive Plan (the "2007 LTIP) and the 2011 Long Term Incentive Plan (the "2011 LTIP") which was approved by the shareholders in May 2011 and authorized the maximum aggregate number of shares to be issued of 3,000,000. In general, the Company's plans provide for grants of restricted stock and stock options to be issued with a per-share price equal to the fair market value of a share of common stock on the date of grant.  Option terms are specified at each grant date, but are generally are 10 years from the date of issuance.  Options generally vest over a three to five year period.  

For the three months ended September 30, 2012 and 2011, compensation expense related to stock based awards outstanding for the periods was $846,000 and $697,000, respectively, and was $2.4 million and $1.8 million in the nine months ended September 30, 2012 and 2011, respectively.

In the first quarter of 2012, the Company granted options to purchase 262,051 shares of common stock. The weighted average fair value of the options granted in the first quarter was $4.08 using the Black Scholes option pricing model with the following assumptions:

Expected life of options	6.2 years
Expected volatility	68.5	%
Risk-free interest rate	1.42	%
Dividend yield	—	%

The Company applies a 5.5% forfeiture rate to its option grants. No shares of stock or options were granted in the quarter ended September 30, 2012.

In the three months ended September 30, 2012, 33,513 shares were exercised, generating proceeds of approximately $163,000. In the nine month period ended September 30, 2012, the Company received proceeds of approximately $176,000 upon the exercise of 35,739 options. In the three and nine months ended September 30, 2011, 1,433, and 32,124 options were exercised, generating proceeds of $3,000 and $185,000, respectively.