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STOCK-BASED COMPENSATION
 3 Months Ended
Mar. 31, 2013
STOCK-BASED COMPENSATION  
STOCK-BASED COMPENSATION

NOTE 7   STOCK-BASED COMPENSATION

 

There were no stock options granted during the first quarter of 2013.  During the first quarter of 2012, the Company granted 0.3 million of stock options to the Company’s Chief Operating Officer, as part of his employment contract, at an exercise price of $5.80 per share.  The options vest equally over a three year period if the individual remains affiliated with the Company (subject to acceleration of vesting in certain events) and are exercisable for a period of 10 years from the date of issue.

 

The Company estimates the fair value of each stock option at the grant date by using the Black-Scholes option-pricing model.  During the three months ended March 31, 2013 and 2012, the Company recorded stock option expense of $0.4 million and $1.6 million, respectively.

 

The principal assumptions used in applying the Black-Scholes option pricing model for the awards for the three months ended March 31, 2013 and 2012 were as follows:

 

 

 

March 31, 2013

 

March 31, 2012

 

Risk-free interest rate

 

—

 

0.97%

 

Dividend yield

 

—

 

n/a

 

Volatility factor of the expected market price of common stock

 

—

 

75%

 

Weighted-average expected life of option

 

—

 

6.0 years

 

Weighted-average grant date fair value

 

—

 

$3.80