SHARE BASED PAYMENT

9 Months Ended

Sep. 30, 2011

SHARE BASED PAYMENT

SHARE BASED PAYMENT

NOTE 11—SHARE BASED PAYMENT

During 2011, the Company granted stock option awards, under the 2010 Equity Incentive Plan, to officers and certain employees, with an exercise price equal to the closing price of the Company’s common stock on the date of grant. The stock options have a ten-year term and vest ratably over three years dependent solely on continued employment. In addition, the Company granted restricted share awards, under the 2010 Equity Incentive Plan, to officers, employees and non-employee directors, without cost to the grantee. The restricted share awards granted to officers and employees vest ratably over three years dependent solely on continued employment. Restricted share awards to non-employee directors fully vest one year from the date of grant.

At September 30, 2011, an aggregate of 607,194 restricted shares and 214,987 stock options was outstanding. An additional 1,317,819 shares remain available for grant under the 2010 Equity Incentive Plan as of September 30, 2011.

The following table provides additional information regarding the Company’s 2010 Equity Incentive Plan for the nine months ended September 30, 2011 (dollars in thousands, except per share amounts):

	Options / Shares		Weighted Average Exercise Price		Weighted Average Remaining Contract Life (Years)	Aggregate Intrinsic Value
Restricted Shares
Outstanding at beginning of period	465,761		$	—
Granted	157,833		—
Forfeited	(16,400	)	—
Outstanding at end of period	607,194		$	—		$	7,056
Exercisable at end of period	—		$	—		$	—
Stock Options
Outstanding at beginning of period	—		$	—
Granted	214,987		12.52
Exercised	—		—
Forfeited	—		—
Expired	—		—
Outstanding at end of period	214,987		$	12.52	9.5	$	—
Exercisable at end of period	—		$		—	$	—

The fair value of stock option awards granted during 2011 was estimated on the grant date using the Black-Scholes option pricing model, based on the following inputs:

	2011
Estimated option life	6.00 years
Risk free interest rate	2.58		%
Expected volatility	57.10		%
Expected dividend rate	0.00		%
Weighted average grant date fair value per share of options granted	$	6.92

For the three and nine months ended September 30, 2011 share based payment expense was $0.7 million and $1.7 million, respectively. As of September 30, 2011 the total unrecognized compensation cost for outstanding restricted shares and options was $5.8 million, net of estimated forfeitures. The unrecognized compensation cost will be recognized over each grant’s applicable vesting period, with the latest vesting date being August 2, 2014.