Stock Options - Note 9

6 Months Ended

Jun. 30, 2012

Stock Options Disclosure

Stock Options

(9) Stock Options

During the year ended December 31, 2010, the Company's Board of Directors awarded a total of 1,130,700 performance condition options to certain of the Company's employees. Vesting of these options is subject to the Company achieving certain performance criteria established at the grant date and the individuals fulfilling a service condition (continued employment). As of June 30, 2012, the performance criteria of 340,270 of these options had been satisfied and will become exercisable based on the following vesting schedule: 25% on each of the first four anniversaries of the date of grant, which was February 20, 2010 (the date of grant). The Company recognized $32,000 and $316,000 of compensation expense during the three and six months ended June 30, 2012, respectively and $11,000 and $77,000 of compensation expense during the three and six months ended June 30, 2011, respectively, related to these options.

The Company recognized $1.6 million and $3.5 million of compensation expense during the three and six months ended June 30, 2012, respectively and $1.1 million and $2.0 million of compensation expense during the three and six months ended June 30, 2011, respectively, related to all stock based compensation. As of June 30, 2012, there was $12.7 million of total unrecognized compensation cost related to all unvested share-based compensation arrangements that is expected to be recognized over a weighted-average period of 2.69 years.

The Company utilized the Black-Scholes option pricing model to determine the grant date fair value of these awards. As of June 30, 2012, except for the 340,270 options discussed above, the Company does not believe that the achievement of the remaining performance criteria is probable and therefore, has not recognized any compensation expense related to these options during the three and six months ended June 30, 2012 and 2011, respectively. Compensation expense will be recognized only once the performance condition is probable of being achieved and then only the cumulative amount related to the service condition that has been fulfilled.