Stock-Based Compensation

12 Months Ended

Dec. 31, 2012

Stock-Based Compensation [Abstract]

Stock-Based Compensation

13.  Stock-Based Compensation

Long-term incentive plan

During 1995, the Company established the 1995 Long-Term Incentive Stock Option Plan (the “Plan”), which permits the granting of stock options (including incentive stock options and nonqualified stock options) stock appreciation rights, restricted or unrestricted stock awards, phantom stock, performance awards or any combination of these to employees, directors or consultants.  Options to purchase shares of the Company’s common stock under the Plan expire in either seven or ten years from the date of grant and become exercisable in three, five, or seven installments with a certain percentage of options vesting on the first anniversary of the grant date and additional options vesting on each of the subsequent anniversaries of the grant date, subject to acceleration under certain circumstances.  The Plan expires on June 30, 2018; the total  number of shares that could be issued under the Plan is 5,500,000.  As of December 31, 2012, 3,070,803 stock options were outstanding under the Plan, while 836,883 stock options remained to be granted under the Plan.

The Company recognizes compensation expense on a pro rata straight-line basis over the requisite service period for stock-based compensation awards with both graded and cliff vesting terms.  The Company recognizes the cumulative effect of a change in the number of awards expected to vest in compensation expense in the period of change.  The Company has not capitalized any portion of its stock-based compensation.

During the years ended December 31, 2012, 2011, and 2010, the Company recognized $914,000, $727,000 and $807,000, respectively, of pre-tax stock-based compensation expense under the fair value method.

Stock option and warrant activity

During the year ended December 31, 2012, the Company granted stock options to purchase 212,870 shares of common stock to GSE directors, officers, and employees.  No warrants to purchase shares of common stock were issued in 2012.  During the year ended December 31, 2011, the Company granted stock options to purchase 1,463,000 shares of common stock to GSE directors, officers, and employers.  No warrants to purchase shares of common stock were issued in 2011.

Information with respect to stock option and warrant activity as of and for the year ended December 31, 2012 is as follows:

						Weighted
					Aggregate	Average
		Number	Weighted		Intrinsic	Remaining
		of	Average		Value	Contractual Life
		Shares	Exercise Price		(in thousands)	(Years)
Shares under option and warrant, December 31, 2011		3,479,450	$                  3.46
	Options granted	212,870	2.26
	Options exercised	(266,211)	1.63
	Options forfeited	(216,439)	3.73
	Warrants expired	(138,867)	6.00
Shares under option December 31, 2012		3,070,803	3.40		$                   534	4.85
Options expected to vest		1,750,107	2.75		$                   358	5.43
Options exercisable at December 31, 2012		1,320,696	$                  4.27	`	$                   176	4.08

A summary of the status of the Company’s nonvested options as of and for the year ended December 31, 2012 is presented below.  All outstanding warrants were vested prior to 2012.

		Weighted
	Number	Average
	of Shares	Fair Value
Nonvested options at December 31, 2011	2,040,690	$          1.57
Options granted	212,870	0.93
Options vested during the period	(503,453)	1.76
Nonvested options at December 31, 2012	1,750,107	$          1.43

The fair value of the options granted in 2012, 2011 and 2010 were estimated on the date of grant using a Black-Scholes option-pricing model with the following assumptions:

	Years ended December 31,
	2012	2011	2010
Risk-free interest rates	.34 - 1.16%	1.06 - 2.28%	.57% - 2.93%
Dividend yield	0%	0%	0%
Expected life	2.00 - 6.28 years	3.75 - 6.98 years	2.5 - 6.5 years
Volatility	52.13 - 57.85%	49.49 - 60.24%	37.2 - 63.8%
Weighted average volatility	53.85%	55.04%	55.38%

As of December 31, 2012, the Company had $2.2 million of unrecognized compensation expense related to the unvested portion of outstanding stock options expected to be recognized on a pro-rata straight line basis over a weighted average remaining service period of approximately 6.5 years.

The Company received cash for the exercise price associated with stock options exercised of $272,000, $133,000, and $97,000 during the years ended December 31, 2012, 2011, and 2010, respectively.  The total intrinsic value realized by participants on stock options exercised was $94,000, $103,000 and $159,000 during the years ended December 31, 2012, 2011, and 2010, respectively.