Quarterly report pursuant to Section 13 or 15(d)

Stock-Based Compensation

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Stock-Based Compensation
 3 Months Ended
Mar. 31, 2012
Stock-Based Compensation [Abstract]  
Stock-Based Compensation

3. STOCK-BASED COMPENSATION

Stock options are granted under the Company's long-term incentive plan and have an exercise price that may not be less than the fair market value of the underlying shares on the date of grant. In general, stock options granted will become exercisable over a period determined by the Compensation Committee which in the past has been a five year life, with the options vesting over a two or three year period. A third of the stock options granted in March 2012 and 2011 were vested immediately with the remainder vesting over a two year period. In addition, stock options will become exercisable upon a change in control, unless provided otherwise by the Compensation Committee. At March 31, 2012, there were 358,946 shares subject to options authorized, but not granted.

For the three months ended March 31, 2012 and 2011, the Company recognized non-cash compensation expense of $1.4 million and $1.3 million related to stock options, respectively. These amounts were recorded as general and administrative expense. Because the Company does not pay significant United States federal income taxes, no amounts were recorded for tax benefits related to excess stock based compensation deductions.

A summary of the stock option activity for the three months ended March 31, 2012 is provided below:

     Number of
Shares
Underlying
Options
(in thousands) 		    Weighted
Average
Exercise Price
Per Share		      Weighted
Average
Remaining
Contractual
Term		      Aggregate
Intrinsic Value
(in millions)		  

Outstanding at beginning of period

      3,805      $ 5.10         2.94      

Granted

      1,024      $ 8.81         4.96      

Exercised

      (205 )    $ 4.46         0.17      

Forfeited

      —        $ 0.00         —        
  

 

 

    

 

 

     

 

 

     

Outstanding at end of period

      4,624      $ 5.87         3.30       $ 8.26   
  

 

 

    

 

 

     

 

 

     

 

 

  

Vested - end of period

      3,707      $ 5.31         2.98       $ 8.11   
  

 

 

    

 

 

     

 

 

     

 

 

  

Vested and expected to vest - end of period

      4,338      $ 5.87         3.30       $ 8.22   
  

 

 

    

 

 

     

 

 

     

 

 

  

The intrinsic value of a stock option is the amount by which the current market value of the underlying stock exceeds the exercise price of the option.

As of March 31, 2012, unrecognized compensation costs totaled $2.0 million. The expense is expected to be recognized over a weighted average period of 1.7 years.