Stock Compensation Plans

We have reserved 2.0 million shares for issuance to key management personnel and directors under the 2011 long-term incentive and equity award plan. As of December 31, 2012, 1.2 million shares remain available for issuance under this plan. The plan permits the issuance of restricted stock and share units, as well as options, stock appreciation rights, and performance stock and performance stock unit awards. Awards under the plan can be satisfied in cash or shares at the discretion of the Board of Directors. According to the plan provisions, the share units provide the holders the right to receive one share of our common stock upon vesting of one share unit. The plan requires the exercise price of any option equal to the closing market price of our common stock on the date of grant.

Stock Options

A summary of activity in our stock option plans is presented in the following table:



	Shares	Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
	(in thousands)	(in dollars)		(in years)	(in millions)
Outstanding at December 31, 2009	2	$	35,475.00
Granted	31	3,600.00
Exercised	—	—
Forfeited / expired	—	—
Outstanding at December 31, 2010	33	$	3,680.09
Granted	—	—
Exercised	—	—
Forfeited / expired	—	—
Outstanding at December 31, 2011	33	$	3,680.09
Granted	—	—
Exercised	—	—
Forfeited / expired	—	—
Outstanding at December 31, 2012	33	$	3,680.09	7.17	$	—
Exercisable at December 31, 2012	33	$	3,680.09	7.17	$	—

On March 1, 2010, we formalized the Second Union Employee Option Plan that provided for a grant of up to 31,000 options, including the effect of the reverse stock split, to purchase our common stock at an exercise price equal to $3,600.00 per share, of which all have been granted. As a part of the union wage reduction, we agreed to award a certain equity interest to all effected union employees. These options vested immediately, will expire 10 years from the grant date, and were exercisable upon shareholder approval, which was received on June 29, 2010, at our annual shareholder meeting.

The fair value of each option award was estimated on the date the grant was approved by shareholders using the Black-Scholes-Merton pricing model. Expected volatilities were estimated using historical volatility of our common stock. We used historical data to estimate option exercise and employee termination within the valuation model; separate groups of employees that have similar historical exercise behavior were considered separately for valuation purposes. The expected term of options granted was derived from the output of the valuation model and represents the period of time that options granted are expected to be outstanding. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.

We valued the award granted under the Second Union Employee Option Plan in 2010 using the above described model with the following weighted average assumptions:



Dividend yield	—		%
Expected volatility	173.2		%
Risk-free interest rate	0.61		%
Expected option life (years)	2.0
Fair value per option	$	675.00

Based on the above fair value calculation, we recognized compensation expense of $25.0 million related to these outstanding stock option awards for the year ended December 31, 2010 which is included in “Equity based compensation expense” in our accompanying statement of consolidated operations.

The following table summarizes information about stock options outstanding as of December 31, 2012:



	Options Outstanding				Options Exercisable
	Shares	Weighted Average Remaining Contractual	Weighted Average		Shares	Weighted Average
Range of exercise prices	(in thousands)	Term (in years)	Exercise price		(in thousands)	Exercise price
$ 3,600.00 - 35,475.00	33	7.17	$	3,680.09	33	$	3,680.09

Restricted Stock

A summary of the activity of our nonvested restricted stock and share unit awards is presented in the following table:



	Shares (in thousands)		Weighted Average Grant-Date Fair Value
Nonvested at December 31, 2009	—		$	—
Nonvested at December 31, 2010	—		—
Granted	271		11.60
Vested	(1	)	11.60
Forfeited	—		—
Nonvested at December 31, 2011	270		11.60
Granted	586		11.34
Vested	(21	)	8.85
Forfeited	(83	)	11.63
Nonvested at December 31, 2012	752		$	11.47

We recognize expense on a straight-line basis over the vesting term. The vesting provisions for the restricted stock and share unit awards and the related number of shares granted during the year ended December 31 are as follows:



	Shares (in thousands)
Vesting Terms	2012	2011	2010
25% per year for four years	501	78	—
100% on February 20, 2013	72	—	—
33.3% immediately and 33.3% per year thereafter on the anniversary of the grant date	13	3	—
25% on January 1, 2013, 25% on the 2 year anniversary of the employment date, 25% on each employment anniversary thereafter	—	184	—
100% on July 27, 2013	—	6	—
Total restricted stock and share units granted	586	271	—

As of December 31, 2012 and 2011, there was $6.4 million and $3.2 million, respectively of unrecognized compensation expense related to nonvested share-based compensation arrangements. That expense is expected to be recognized over a weighted-average period of 2.7 years. The fair value of nonvested shares is determined based on the closing trading price of our shares on the grant date. The fair value of shares vested during the years ended December 31, 2012, 2011 and 2010 was not material.

At December 31, 2012, none of the outstanding awards under our stock compensation plans provide dividend participation features.

Teamster 401(k) Contribution

On July 22, 2011, the Company delivered into escrow 1.3 million shares of our Series B Preferred Stock, which were delivered from escrow on July 25, 2011, to the Teamster-National 401(k) Savings Plan for the benefit of the Company's IBT employees. The $14.9 million fair value of the1.3 million shares of Series B Preferred Stock issued was based on a contemporaneous valuation, whereas an estimated enterprise value was first calculated using assumptions related to market multiples of earnings, a market approach which is a level 3 fair value measurement. The estimated enterprise value was then reduced by the fair value of our debt instruments post-restructuring, with the residual allocated to our Series B Preferred Stock and common stock. On September 16, 2011, following approval from the shareholders of the Company's amended and restated certificate of incorporation the number of common shares increased and these preferred shares were automatically converted into 1.6 million shares of common stock.

This element of the restructuring was accounted for as the grant of a share-based payment award to employees and the $14.9 million charge for the share-based payments has been included in “Equity based compensation expense” in the accompanying statements of consolidated operations.