Long-Term Retention and Management Incentive Plan

9 Months Ended

Sep. 30, 2011

Long-Term Retention and Management Incentive Plan [Abstract]

Long-Term Retention and Management Incentive Plan

10. Long-Term Retention and Management Incentive Plan

Effective April 22, 2011, our Board of Directors adopted a Long-Term Retention and Management Incentive Plan (the “Incentive Plan”) to provide equity and cash incentives for our principal executive officer, principal financial officer and certain other named executive officers. The Incentive Plan rewards long-term corporate performance, with a goal of helping to align the total compensation of the participants with the interests of our stockholders. The Incentive Plan provides that, upon the occurrence of certain events, defined as a $750 million (the “Initial Capitalization Target”) and/or $1 billion market capitalization target (the “Subsequent Capitalization Target”), each participant will be entitled to receive stock awards under our 2009 Incentive Award Plan, as amended, and cash awards upon a change in control. The Incentive Plan will terminate on April 22, 2016, the fifth anniversary of its effective date. The number of shares available for issuance under the Incentive Plan will not exceed 1,039,500 shares.

The fair value of each stock award under the Incentive Plan was estimated on the date of the grant using the Monte Carlo valuation model and assumes that the Initial Capitalization Target will be achieved at 13 months and the Subsequent Capitalization Target will be achieved at 20 months (collectively referred to as the “Service Life”), from the effective date. The key inputs used to estimate the awards’ fair value include the following:

Term of Incentive Plan	5 Years
Estimated trading days from grant to end of market condition period		1,260
Average stock price on date of grant	$	9.29
Number of common shares outstanding proximate to grant date		52,041,781
Maximum number of options expected to exercise during term		8,397,094
Expected annual stock volatility		65.0	%
Expected return on common equity		15	%

The fair value of these equity awards was determined to be approximately $8.1 million and will be amortized over the respective Service Life. Included in selling, general and administrative expense was $2.5 million and $5.5 million, respectively, of compensation expense for the three and nine months ended September 30, 2011.