Equity-Based Compensation

12 Months Ended

Dec. 31, 2012

Equity-Based Compensation

NOTE 16 - EQUITY-BASED COMPENSATION

Our equity-based awards were issued under our 2011 Equity Incentive Plan which provides for the granting of stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalent rights, and other equity-based award or incentive awards up to an aggregate of 2,318,290 shares of common stock. Stock options granted may be either incentive stock options or nonqualified stock options. Vesting terms may vary with each grant, and stock option terms are generally five to ten years. We have outstanding equity-based awards in the form of stock options and restricted stock awards. All of our existing equity-based awards are classified as equity awards.

Stock Options

Concurrent with the completion of our IPO, we granted options to our executive officers to purchase 940,000 shares of common stock. These options have an exercise price of $9.75 per share, the market value of the common stock on the date of grant, and vest ratably over five years based on continued service, or upon a change in control.

The fair value of stock options granted was estimated using a Black-Scholes valuation model and the following assumptions:

	2011
Expected dividend yield		5.09	%
Expected stock price volatility		56.6	%
Risk-free interest rate		2.57	%
Expected life of options (in years)		6.5
Weighted average estimated fair value
of options at grant date per share	$	3.48

The expected dividend yield was calculated based on our annual dividend payments. The expected volatility was based on historical monthly price changes of a peer group of comparable entities based on the expected life of the options at the date of grant. The risk-free interest rate was based on the U.S. Treasury yield curve in effect at the date of grant. The expected life of options is the average number of years we estimate that options will be outstanding.

The following table summarizes stock option activity under our 2011 Equity Incentive Plan for 2012:

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Terms		Aggregate Intrinsic Value (Current Value Less Exercise Price)
				(Per share)		(In years)		(in thousands)
Outstanding at December 31, 2011		940,000		$	9.75		8	$	-
Granted		-		$	-
Exercised		-		$	-
Forfeited		(47,000	)	$	9.75
Outstanding at December 31, 2012		893,000		$	9.75		8	$	-
Exercisable at December 31, 2012		-		$	-			$	-

At December 31, 2012, the exercise price of our outstanding options exceeds the market price of our common stock.

Time-Based Restricted Stock Awards

On April, 25, 2012, we awarded time-based restricted stock awards for 110,137 shares of common stock to our executive officers. These awards vest over a three year period based on continued service (25% at December 31, 2012 and 2013 and 50% at December 31, 2014), or upon a change in control. The holders of these awards have the right to vote the related shares of common stock and receive all dividends declared and paid whether or not vested.

The following table summarizes time-based restricted stock activity under our 2011 Equity Incentive Plan for 2012:

	Number of Shares			Weighted Average Grant Date Fair Value			Aggregate Current Value
				(Per share)			(In thousands)
Non-vested January 1, 2012		-
Granted		110,137		$	7.78
Vested		(27,534	)	$	7.78
Forfeited		-
Non-vested December 31, 2012		82,603		$	7.78	$	785

Performance-Based Restricted Stock Awards

On April, 25, 2012, we awarded performance-based restricted stock awards for 82,602 shares of common stock to our executive officers. These awards vest ratably over a three year period subject to the attainment of certain performance goals and continued service, or upon a change in control. No shares vested during 2012. The holders of these awards have the right to vote the related shares of common stock and any dividends declared will be accumulated and will be subject to the same vesting conditions as the awards.

The following table summarizes performance-based restricted stock activity under our 2011 Equity Incentive Plan for 2012:

	Number of Shares		Weighted Average Grant Date Fair Value		Aggregate Current Value
			(Per share)		(In thousands)
Non-vested January 1, 2012		-
Granted		82,602	$	7.78
Vested		-
Forfeited		-
Non-vested December 31, 2012		82,602	$	7.78	$785

Director Stock Awards

On June 7, 2012, we granted 15,288 shares of common stock to our directors and, concurrent with the completion of our IPO on February 11, 2011, we granted 4,000 shares of common stock to our directors. These grants were made under our 2011 Equity Incentive Plan and were vested upon grant.

Equity-Based Compensation Expense

Equity-based compensation expense for 2012 and 2011 was (in thousands):

	2012		2011
Included in corporate general and administrative salaries
and other compensation in the consolidated statements of operations
Stock options	$	700	$	441
Time-based restricted stock		214		-
Performance-based restricted stock		171		-
		1,085		441
Included in corporate general and administrative other in
the consolidated statements of operations
Director stock		120		39
	$	1,205	$	480

The amount of expense may be subject to adjustment in future periods depending upon the attainment of specific goals, which affect the vesting of the performance-based restricted stock, or a change in the forfeiture assumptions.

Unrecognized equity-based compensation expense for all non-vested awards was $3.1 million at December 31, 2012. We expect to recognize this cost over a remaining weighted-average period of 2 years.