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Stock-Based Compensation
 6 Months Ended
Jun. 30, 2012
Stock-Based Compensation [Abstract]  
Stock-Based Compensation

Note 11 – Stock-Based Compensation

2007 Stock Option and Incentive Plan

The Company accounts for stock-based compensation under the fair value recognition provisions of ASC Topic 718 – “Compensation – Stock Compensation.”

The Company’s 2007 Stock Option and Incentive Plan (“2007 Plan”) provided for granting of stock-based compensation to employees, directors, consultants, and advisors of the Company. Under the 2007 Plan, an aggregate of 6,000,000 shares of the Company’s common stock could be granted to include stock options and restricted stock. On April 20, 2012, the Company’s Board of Directors adopted, subject to shareholder approval, the 2012 Omnibus Incentive Plan (the “2012 Plan”). The 2012 Plan was approved by Shareholders effective May 24, 2012 at which time the 2007 Plan was terminated and the remaining 4,604,800 shares reserved for future issuance were cancelled. The aggregate number of shares of the Company’s common stock reserved and available for issuance pursuant to awards granted under the 2012 Plan is 5,000,000 of which only 4,000,000 shares of our common stock may be issued upon the exercise of incentive stock options. At June 30, 2012, no shares have been granted and 5,000,000 shares are available for grant under the 2012 Plan.

Stock Options

Outstanding stock options granted under the 2007 Plan vest over periods ranging from immediately vested to five years and are exercisable over the contractual term of ten years.

A summary of the activity in the Company’s 2007 Plan is as follows (dollars in thousands, except per share amounts):

 

                                 
    Number of
Options		     Weighted-
Average
Exercise
Price		     Weighted-
Average
Remaining
Contractual
Term		     Aggregate
Intrinsic
Value		  
         

Outstanding at December 31, 2011

     620,000     $ 2.97                  
           

 

 

                  

Exercised

     (217,003 )      3.33                  
   

 

 

    

 

 

                  

Outstanding at June 30, 2012

     402,997       2.78       5.3 years     $ 5,971  
   

 

 

    

 

 

    

 

 

    

 

 

  

Exercisable at June 30, 2012

     382,997     $ 2.60       5.1 years     $ 5,745  
   

 

 

    

 

 

    

 

 

    

 

 

  

At June 30, 2012, there was approximately $35,000 of unrecognized compensation expense related to nonvested stock-based compensation related to stock options granted under the 2007 Plan, which the Company expects to recognize over a weighted-average period of 22 months. The total fair value of shares vesting and recognized as compensation expense was approximately $6,000 and $59,000, respectively, for the three and six month periods ended June 30, 2012. There was no associated income tax benefit recognized in 2012 with respect to the compensation expense related to

stock options. During the six months ended June 30, 2012, a total of 217,003 options were exercised and net settled by surrender of 71,409 shares. The total intrinsic value of the options exercised during the six months ended June 30, 2012 was $1,470,101 and the associated income tax benefit recognized was approximately $437,000. The total fair value of shares vesting and recognized as compensation expense was approximately $9,400 and $18,600, respectively, for the three and six month periods ended June 30, 2011. There was no associated income tax benefit recognized with respect to the share compensation expense in 2011. The total intrinsic value of the 145,200 options exercised during the six months ended June 30, 2011 was $684,220 and the income tax benefit recognized was $168,000.

No stock options were granted during the three and six month periods ended June 30, 2012 and 2011.

Restricted Stock Awards

During the three months ended June 30, 2012, the Company granted restricted stock awards to certain executive officers in connection with their service to the Company. The terms of the Company’s restricted stock grants include both service and market-based conditions. The fair value of the awards with market-based conditions is determined using a Monte Carlo simulation method which calculates many potential outcomes for an award and then establishes fair value based on the most likely outcome. The determination of fair value with respect to the awards with only service-based conditions is based on the value of the Company’s stock on the grant date.

Information with respect to unvested restricted stock awards, which were granted in April and May 2012 under the Company’s 2007 Plan, is as follows:

 

                 
    Number of
Restricted
Stock
Awards		     Weighted-
Average
Grant
Date Fair
Value		  

Outstanding at December 31, 2011

     —         —    

Issued

     200,000     $ 12.91  
   

 

 

    

 

 

  

Outstanding at June 30, 2012

     200,000     $ 12.91  
   

 

 

    

 

 

  

At June 30, 2012, there was approximately $2.4 million of total unrecognized compensation expense related to nonvested restricted stock arrangements granted under the Company’s 2007 Plan. The Company expects to recognize the remaining compensation expense over a weighted-average period of 42 months.

No restricted stock was granted during the three and six months ended June 30, 2011.