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SHARE-BASED COMPENSATION | 12 Months Ended
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Dec. 31, 2011
SHARE-BASED COMPENSATION. |
SHARE-BASED COMPENSATION |
NOTE 8. SHARE-BASED COMPENSATION The Company’s three stock option plans, consisting of the Directors’ Stock Option Plan, the Executive Long-term Incentive Plan and the Employee Stock Option Plan (the “Plans”), which collectively provide for the granting of options to purchase up to 3,250,000 common shares. The exercise price of stock options granted under the Plans is established by the respective plan committees, but the exercise price may not be less than the market price of the Company’s common stock on the date the option is granted. The Company stock options typically vest on a graded schedule, typically in equal, one-third increments, although the respective stock option committees have the discretion to impose different vesting periods or modify existing vesting periods. Options expire ten years from the grant date. By their amended terms, the Plans will expire in June 2013 after which no options may be granted. A summary of the stock option activity as of and for the year ended December 31, 2011 is presented below:
|  |  |  | Weighted Average |  |  |
Options |  | Shares |  | Exercise Price |  | Remaining Contractual Term |  | Aggregate Intrinsic Value |
Outstanding at beginning of period |  | 2,079,383 |  | $ | 12.54 |  | — |  | — |
Granted |  | 293,627 |  | 9.56 |  | — |  | — |
Exercised |  | — |  | — |  | — |  | — |
Forfeited |  | (20,555 | ) | 10.75 |  | — |  | — |
Expired |  | (4,999 | ) | 20.59 |  | — |  | — |
Outstanding at end of period |  | 2,347,456 |  | $ | 12.13 |  | 6.8 yrs. |  | $ | 701,710 |
Exercisable at end of period |  | 1,232,329 |  | $ | 13.85 |  | 5.1 yrs. |  | $ | (1,330,342 | )
On May 21, 2010, the Company commenced a Stock Option Exchange Program whereby eligible employees were allowed a one-time opportunity to voluntarily surrender certain outstanding underwater stock options in exchange for fewer new stock options with a lower exercise price (the “Exchange Offer”). The Exchange Offer expired on June 18, 2010. Pursuant to the Exchange Offer, 454,319 eligible stock options were tendered and accepted by the Company for cancellation. The tendered options represented approximately 95% of the total stock options eligible for exchange in the Exchange Offer. On June 21, 2010, the Company granted an aggregate of 426,709 new stock options in exchange for the eligible stock options surrendered in the Exchange Offer. The exercise price of the new stock options is $11.15, which was the closing price of the Company’s common stock on June 21, 2010 as reported by the NASDAQ stock exchange. A summary of the status of the Company’s nonvested shares as of, and for the year ended, December 31, 2011 is presented below:
Nonvested Shares |  | Shares |  | Weighted-Average Grant Date Fair Value |
Nonvested at January 1, 2011 |  | 1,246,143 |  | $ | 6.52 |
Granted |  | 293,627 |  | 9.56 |
Vested |  | (399,089 | ) | 13.85 |
Forfeited |  | (25,554 | ) | 10.75 |
Nonvested at December 31, 2011 |  | 1,115,127 |  | $ | 12.16 |
Expense Measurement and Recognition: The Company recognizes share-based compensation for all current award grants and for the unvested portion of previous award grants based on grant date fair values. Unrecognized costs related to all share-based awards outstanding at December 31, 2011 totaled approximately $1.3 million and is expected to be recognized over a weighted average period of 2.9 years. The Company uses historical data and projections to estimate expected employee, executive and director behaviors related to option exercises and forfeitures. The Company estimates the fair value of each stock option award on the grant date using the Black-Scholes valuation model incorporating the assumptions noted in the following table. Option valuation models require the input of highly subjective assumptions, and changes in assumptions used can materially affect the fair value estimate. Option valuation assumptions for options granted during each year were as follows:
|  | Years ended December 31, |
|  | 2011 |  | 2010 |  | 2009 |
Expected volatility |  | 56.1 | % | 42.9 | % | 64.1 | %
Expected dividends |  | — |  | — |  | — |
Expected life (in years) |  |  |  |  |  |  |
Directors’ Plan |  | 4.6 |  | 4.6 |  | 2.5 |
Executive Plan |  | 4.5 |  | 4.5 |  | 4.5 |
Employee Plan |  | 3.1 |  | 3.1 |  | 3.1 |
Weighted average risk free rate |  | 0.7 | % | 1.2 | % | 1.4 | %
Weighted average grant date fair value per share of options granted |  | $ | 3.89 |  | $ | 2.13 |  | $ | 4.52 |
Total intrinsic value of options exercised |  | — |  | $ | 64,253 |  | $ | 15,698 |
Cash received for all stock option exercises |  | — |  | $ | 95,372 |  | $ | 13,009 |
Tax benefit realized for tax return deductions |  | — |  | $ | 4,472 |  | $ | 6,673 |
The risk-free interest rate is based on the U.S. treasury security rate in effect as of the date of grant. The expected lives of options are based on historical data of the Company. The Company has determined that an implied volatility is more reflective of market conditions and a better indicator of expected volatility. Reported stock based compensation expense was classified as follows:
|  | For the years ended December 31, |
|  | 2011 |  | 2010 |  | 2009 |
Casino |  | $ | 80,530 |  | $ | 46,313 |  | $ | 58,761 |
Food and beverage |  | 70,633 |  | 75,633 |  | 56,600 |
Hotel |  | 17,028 |  | 27,866 |  | 23,587 |
Selling, general and administrative |  | 1,451,461 |  | 1,591,272 |  | 1,909,823 |
Total stock-based compensation, before taxes |  | 1,619,652 |  | 1,741,084 |  | 2,048,771 |
Tax benefit |  | (581,601 | ) | (609,379 | ) | (717,069 | )
Total stock-based compensation, net of tax |  | $ | 1,038,051 |  | $ | 1,131,705 |  | $ | 1,331,702 |

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher AICPA -Name Statement of Position (SOP) -Number 93-6 -Paragraph 53 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 123R -Paragraph 64, 65, A240 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 + Details
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