Liability Associated with Non-renewal of Senior Officers' Contracts

3 Months Ended

Mar. 31, 2012

Commitments [Abstract]

Commitments

(NOTE 13) - Liability Associated with Non-renewal of Senior Officers' Contracts:

In March 2012, the Company reached a decision that made it probable that the employment agreement of its chief operating officer would not be renewed, which would effectively terminate his employment as of July 31, 2012. Pursuant to the terms of his existing agreement, the Company recorded an expense of $1,194,000 during the three months ended March 31, 2012, representing its estimated contractual obligation relating to the contract non-renewal. In addition, relating to the non-renewal, all of his unvested restricted shares would vest as of July 31, 2012. At March 31, 2012, there was approximately $135,000 of unearned compensation relating to his unvested restricted shares which will be recognized as stock compensation expense over his remaining four month service period. The impact of discounting this liability, which is payable through 2014, to its present value was not material. As of March 31, 2012, the liability associated with the non-renewal of the chief operating officer contract was approximately $1,194,000.

The Company elected not to renew the employment agreement of its former chief executive officer effectively terminating his employment as of December 31, 2010. The Company recorded an expense during the year ended December 31, 2010 of $2,000,000 representing its estimated contractual obligation, along with associated costs, relating to the contract non-renewal. In March 2011, the former chief executive officer filed for an arbitration hearing in the City of New York to settle a dispute regarding certain contractual obligations owed in connection with the contract non-renewal. In April 2012, the arbitrator granted a binding final award on this matter, which did not result in any significant change to the Company's original $2,000,000 charge. As of March 31, 2012 the liability associated with the former chief executive officer was approximately $159,000.