6. Stock-Based Compensation

Under our 2009 Equity Participation Plan we have outstanding options to purchase shares of our Common Stock and restricted stock awards held by eligible employees, non-employee directors and consultants as granted by the Compensation Committee of the Board of Directors.

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions used for grants in the three months ended March 31, 2013 and 2012.

	Three months ended			Three months ended
	March 31, 2013			March 31, 2012
Expected dividend yield		4.68	%		4.25	%
Expected stock price volatility		59.43	%		65.52	%
Risk-free interest rate		2.02	%		1.99	%
Expected life of options		4.64	Years		4.67	Years
Estimated fair value per option granted	$	1.68		$	2.30

The dividend yield is based on expected quarterly cash dividends paid to our shareholders as of the date of grant. Expected stock price volatility is based on historical volatility of our stock. The risk-free interest rate is based on the implied yield available on U.S. Treasury zero-coupon issues with an equivalent remaining term. The expected term of the options represents the estimated period of time until exercise and is based on historical experience of similar awards, giving consideration to the contractual terms, vesting schedules and expectations of future employee behavior. Additionally, an annualized forfeiture rate of 12.2 percent is used as an estimate of future forfeitures based on our historical forfeiture experience. The stock-based compensation expense is adjusted in later periods if the actual forfeiture rate is different from the estimate.

Total stock-based compensation expense recognized in the consolidated statement of operations for the quarter ended March 31, 2013 was approximately $1.8 million before income taxes. Of the total stock-based compensation expense during the quarter, stock option expense was approximately $0.9 million, restricted stock award expense was approximately $0.9 million.

On February 25, 2013, Jeffrey D. Thomas, our former President and Chief Executive Officer, and Margaret M. Thomas, our former Executive Vice President, tendered their resignations from all of their positions held with the Company to our Board of Directors. In connection with Mr. and Ms. Thomas' resignations, we entered into separation agreements effective February 25, 2013. Inclusive in the total stock-compensation expense recognized for the quarter ended March 31, 2013, was approximately $1.5 million in expense related to accelerated vesting of stock options and stock grants as part of the separation agreements. For additional information regarding these agreements, see Note 10 "Commitments and Contingencies."

The following table presents information about outstanding common stock options and restricted grants as of March 31, 2013:

			Options and Awards Outstanding						Options Exercisable
Range of Exercise Prices			Shares		Weighted-Average Remaining Contractual Life (years)		Weighted-Average Exercise Price		Shares		Weighted-Average Exercise Price
Restricted Stock Awards
	$	0.00		228,454		2.60		N/A		N/A		N/A
Stock Options
	$	4.50-6.93		731,319		6.14	$	4.65		284,527	$	4.53
		6.94 - 10.39		260,002		1.75		9.19		236,077		9.25
		10.40 - 13.86		419,299		2.20		11.55		369,745		11.55
		13.87 - 17.32		266,846		0.39		16.93		266,846		16.93
		17.33 - 20.79		5,496		5.11		18.41		5,496		18.41
		20.80 - 24.25		1,000		2.38		21.09		1,000		21.09
		24.26 - 27.72		175,146		0.23		27.07		175,146		27.07
		27.73 - 31.18		5,958		3.63		29.74		5,958		29.74
		31.19 - 34.65		3,711		4.10		34.65		3,711		34.65
Total Stock Options				1,868,777		3.25	$	10.87		1,348,506	$	12.92
Combined				2,097,231		3.18	$	9.68		1,348,506	$	12.92

At March 31, 2013, the aggregate value of restricted stock was $1.0 million and the aggregate intrinsic value of outstanding and exercisable stock options was zero based on our $4.31 closing stock price at March 31, 2013. The intrinsic value is the amount that would have been received by the optionees had all restricted stock been vested and all stock options been exercised on that date. As of March 31, 2013, total unrecognized stock-based compensation expense related to non-vested stock options and non-vested restricted stock awards was approximately $1.7 million, which is expected to be recognized over approximately 3.87 years.

The following table presents information about stock option and restricted stock activity during the three months ended March 31, 2013:

	Restricted Stock Awarded			Weighted-Average Grant Date Fair Value		Stock Options			Weighted-Average Exercise Price
Balance at December 31, 2012		446,946		$	7.24		1,877,500		$	11.02
Granted		13,604			4.67		37,808			4.67
Forfeited		(3,542	)		6.96		(45,410	)		12.31
Vested		(228,554	)		8.23		N/A			N/A
Exercised		N/A			N/A		(1,121	)		4.52
Balance at March 31, 2013		228,454		$	6.10		1,868,777		$	10.87