Significant Stock-Based Plan Activity and Stock-Based Compensation

9 Months Ended

Sep. 30, 2011

Significant Stock-Based Plan Activity and Stock-Based Compensation [Abstract]

Significant Stock-Based Plan Activity and Stock-Based Compensation

Note 11.       Significant Stock-Based Plan Activity and Stock-Based Compensation

Stock Grants

Beginning with the 2011 Annual Meeting of Shareholders, each non-employee director receives an annual grant of shares of our common stock with a fair value of $25,000 upon election at the Annual Meeting of Shareholders. Accordingly, on May 25, 2011, our board of directors approved an annual grant of 2,700 shares of fully-vested common stock to each of our six non-employee directors for a total of 16,200 shares of our common stock.

Performance-Based Share Grants

During the second quarter of 2011, we granted performance-based shares covering 68,000 shares of our common stock to selected executives with vesting contingent upon meeting various company-wide performance goals. The performance goals are tied to target amounts of adjusted EBITDA and net sales for the three fiscal years ending December 31, 2013. The awards earned will range from zero to one hundred percent of the targeted number of performance shares for the performance period ending March 31, 2014. Awards, if earned, will be paid in shares of common stock.

The total fair value of the performance-based awards is estimated based on the fair value of our common stock on the date of grant. Expense is recognized over the service period based on an assessment of the probability that performance goals will be met. We will re-measure the probability of achieving the performance goals during each reporting period. In future reporting periods, if we determine that performance goals are not probable of occurrence, no compensation expense will be recognized and any previously recognized compensation expense would be reversed.

Stock-Based Compensation Expense

Total stock-based compensation expense, all recognized as a component of Selling, general and administrative expense on our Consolidated Statements of Income, was as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011		2010
Stock-based compensation expense	$	88	$	11	$	337	$	85

At September 30, 2011, we had total unrecognized stock-based compensation expense of $906,000, which will be recognized over the weighted average remaining vesting period of 3.4 years.