Long-Term Incentive Plan

9 Months Ended

Sep. 30, 2011

Long-Term Incentive Plan

Long-Term Incentive Plan

Note 11 — Long-Term Incentive Plan

The Long-Term Incentive Plan (the “Incentive Plan”) authorizes the issuance of up to 1,908,332 shares of the Company’s common stock, including the granting of qualified stock options, non-qualified stock options, restricted stock, restricted stock units, and stock appreciation rights.  Total shares issuable under the plan were 57,629 at September 30, 2011.  Stock based awards may be granted to selected directors and officers or employees at the discretion of the board of directors.  There were no stock options granted in the first nine months of 2011 or 2010.  All stock options are granted for a term of ten years.

Vesting of stock options granted in 2004 and prior years was accelerated to immediately vest all options as of December 20, 2005.  Options granted in 2005 were immediately vested and options granted subsequent to 2006 vest over three years.  Generally, restricted stock and restricted stock units vest three years from the grant date, but the Company’s Board of Directors have discretionary authority to change some terms including the amount of time until vest date.  Awards under the Incentive Plan become fully vested upon a merger or change in control of the Company.

Total compensation cost that has been charged against income for those plans was $175,000 in the third quarter of 2011 and $666,000 in the first nine months of 2011.  The total income tax benefit was $61,000 in the third quarter of 2011 and $233,000 in the first nine months of 2011.  However, no tax benefit was recognized in 2011 due to the establishment of a valuation allowance against the Company’s deferred tax assets as of December 31, 2010.  Total compensation cost that has been charged against income for those plans was $253,000 in the third quarter of 2010 and $688,000 in the first nine months of 2010.  The total income tax benefit was $88,000 in the third quarter of 2010 and $241,000 in the first nine months of 2010.

There were no stock options exercised during the third quarter of 2011 or 2010 and the Company did not grant any options of the Company’s common stock during either of those periods.  Total unrecognized compensation cost related to nonvested stock options granted under the Incentive Plan is $2,000 as of September 30, 2011, and is expected to be recognized over a weighted-average period of 0.33 years.  Total unrecognized compensation cost related to nonvested stock options granted under the Incentive Plan was $47,000 as of September 30, 2010, and was expected to be recognized over a weighted-average period of 0.48 years.

A summary of stock option activity in the Incentive Plan is as follows:

	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)	Aggregate Intrinsic Value
Beginning outstanding at January 1, 2011	614,832		$	25.81
Granted	—		—
Exercised	—		—
Canceled	(21,500	)	27.73
Expired	—		—
Ending outstanding at September 30, 2011	593,332		$	25.74	3.32	$	—
Exercisable at end of period	589,332		$	25.87	3.30	$	—
Beginning outstanding at January 1, 2010	683,666		$	24.29
Granted	—		—
Exercised	—		—
Canceled	—		—
Expired	—		—
Ending outstanding at September 30, 2010	683,666		$	24.29	3.99	$	—
Exercisable at end of period	646,168		$	24.34	3.79	$	—

A summary of changes in the Company’s nonvested options in the Incentive Plan is as follows:

	September 30, 2011
	Shares		Weighted Average Grant Date Fair Value
Nonvested at January 1, 2011	8,000		$	2.01
Granted	—		—
Vested	(4,000	)	2.01
Nonvested at September 30, 2011	4,000		$	2.01

Under the incentive plan, restricted stock was granted beginning in 2005 and the grant of restricted units began in February 2009.  Both of these restricted awards have voting and dividend rights and are subject to forfeiture until certain restrictions have lapsed including employment for a specific period.  There were 15,000 restricted awards issued during the third quarter of 2011 and 130,000 shares were granted during the third quarter of 2010.  Compensation expense is recognized over the vesting period of the restricted award based on the market value of the award at issue date.

A summary of changes in the Company’s nonvested shares of restricted share rights is as follows:

	September 30, 2011				September 30, 2010
			Weighted				Weighted
			Average				Average
			Grant Date				Grant Date
	Shares		Fair Value		Shares		Fair Value
Nonvested at January 1	464,298		$	6.76	179,178		$	12.95
Granted	156,320		1.08		341,200		5.10
Vested	(98,770	)	10.71		(23,459	)	27.51
Forfeited	(95,656	)	5.04		(32,621	)	8.45
Nonvested at September 30	426,192		$	4.15	464,298		$	6.76

Total unrecognized compensation cost of restricted awards was $636,000 as of September 30, 2011, which is expected to be recognized over a weighted-average period of 1.02 years.  Total unrecognized compensation cost of restricted awards was $1.8 million as of September 30, 2010, which was expected to be recognized over a weighted-average period of 2.64 years.