Stock-Based Compensation

9 Months Ended

Sep. 30, 2011

Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]

Stock-Based Compensation

3. Stock-Based Compensation

The Company has stock incentive plans under which directors, officers and other eligible employees receive stock options, restricted stock, and other equity-based awards.

Stock options are granted with an exercise price equal to the market value of a share of the Company's common stock on the date of grant. Stock option grants expire within 10 years and generally vest on a graded basis within three to four years from the date of grant. Restricted stock share awards generally vest on a graded basis over a three to four year period or cliff vest after one year. During the nine months ended September 30, 2011 and 2010, the Company granted 281,300 and 559,500 stock options, respectively. The Company granted 144,470 and 71,190 shares of restricted stock during the nine months ended September 30, 2011 and 2010, respectively. Stock options outstanding and unvested restricted stock amounted to 3,040,662 and 194,390 shares, respectively, as of September 30, 2011.

The following table summarizes the components of stock-based compensation expense for the three and nine months ended September 30, 2011 and 2010, which is recorded in Selling, general, and administrative expenses ("SG&A") in the Condensed Consolidated Statements of Operations (dollars, in thousands):

		Three months ended September 30,				Nine months ended September 30,
		2011		2010		2011		2010
Stock options	$	586	$	578	$	2,038	$	1,436
Restricted stock awards and employee stock purchase plan		209		364		657		1,590
Total stock-based compensation expense	$	795	$	942	$	2,695	$	3,026

The fair value of stock options was estimated using the Black-Scholes option-pricing model. The following table summarizes the weighted-average assumptions used to compute the fair value of stock option grants for the three and nine months ended September 30, 2011 and 2010:

	Three months ended September 30,		Nine months ended September 30,
	2011	2010	2011	2010
Weighted-average volatility	56.0%	66.0%	56.4%	56.8%
Risk-free interest rate	3.0%	3.0%	3.0% to 3.5%	3.0% to 3.7%
Weighted-average dividend yield	0%	0%	0%	0%
Expected term	3 to 5 years	3 years	3 to 5 years	3 to 9 years

The fair value of restricted stock was calculated by multiplying the market value of a share of the Company's common stock on the date of grant by the number of shares granted and is amortized on a straight-line basis over the vesting periods.

As of September 30, 2011, approximately $5.3 million of unrecognized stock-based compensation expense related to unvested stock options and restricted stock awards, net of estimated forfeitures, is expected to be recognized over a weighted-average period of 2.5 years, compared to approximately $6.5 million of unrecognized stock-based compensation expense, net of estimated forfeitures, to be recognized over a weighted-average period of 2.1 years as of September 30, 2010.