Share-Based Compensation Arrangements

6 Months Ended

Jun. 30, 2011

Share-Based Compensation Arrangements [Abstract]

Share-Based Compensation Arrangements

NOTE 10. Share-Based Compensation Arrangements

Prior to March 7, 2011, under our Long-Term Incentive Cash Award Plan, two types of incentives were awarded, both of which were based upon the value of our Class A shares; stock appreciation rights (“SARs”) and phantom shares. SARs were granted with an exercise price equal to the closing price of our common stock on the date of the grant, as reported by the NASDAQ Stock Market. SARs and phantom shares were generally granted to non-employee directors and key employees in the first quarter of each year and vest one-third each year over a three year period and have a seven year term. For the six months ended June 30, 2011, we did not grant any SARs or phantom shares under this plan and 35,793 phantom shares vested and were paid at an average price of $11.14 per share reducing our unrecognized liability by $0.4 million.

We measure the fair value of the phantom shares based upon the closing stock price of our Class A common stock on the last day of the reporting period. At June 30, 2011 and December 31, 2010, the closing stock price on our Class A common stock was $10.20 and $13.05 respectively.

We measure the fair value of each SAR, also based on the closing stock price of Class A common stock on the last day of the period, using a Black-Scholes valuation model. The fair value of each SAR was estimated as of June 30, 2011 and 2010 using the following assumptions:

	June 30, 2011	June 30, 2010
Risk-free interest rate	1.17-1.97%	1.69-2.29%
Dividend yield	0.0%	0.0%
Expected life (years)	3.7-5.5 years	4.7-6.5 years
Volatility	83.21%	91.91%

Since both the SARs and the phantom shares are settled in cash rather than by issuing equity instruments, we record them as expense with a corresponding liability on our balance sheet.

The expense is based on the fair value of the awards on the last day of the reporting period and represents an amortization of that fair value over the vesting period of the awards. Total compensation expense related to the plan for the three months ended June 30, 2011 and 2010 was $0.2 million and $0.5 million, respectively, and total compensation expense for the six months ended June 30, 2011 and 2010 was $(0.8) million and $0.9 million respectively. The balance of the fair value that has not yet been recorded as expense is considered an unrecognized liability. The unrecognized compensation liability as calculated at June 30, 2011 and December 31, 2010 was $0.6 million and $2.0 million, respectively.

Effective March 7, 2011, we granted performance phantom shares to make our annual equity incentives reflect our performance during the year. The actual phantom share award amounts for 2011 will be determined based on specified performance targets with respect to performance in 2011 and 25% of the potential awards will be determined at the discretion of our Board of Directors. We record these performance phantom shares as an expense and corresponding liability only when we estimate that it is more likely than not that we will achieve the threshold level of performance necessary for any phantom shares to be awarded. As of June 30, 2011 our estimate of the likelihood of achieving the threshold level of performance resulted in no compensation expense being recorded in this period for performance phantom shares. Our target compensation expense for these awards at June 30, 2011, should we achieve our target at 100%, is estimated to be $1.9 million.