Stock Compensation

9 Months Ended

Sep. 30, 2012

Stock Compensation [Abstract]

Stock Compensation

15.  Stock Compensation

Overview

The Company has stock option and stock incentive plans for employees and non-employee Directors that provide for grants of restricted stock awards (“RSA”s), restricted stock units (“RSU”s), performance stock units (“PSU”s), and options to purchase shares of Company common stock at exercise prices generally equal to the fair values of such stock at the dates of grant.  The Company also maintains a shareholder approved Employee Stock Purchase Plan (the “ESPP”) for the benefit of its employees.  The ESPP allows eligible employees the right to purchase common stock on a regular basis at the lower of 85% of the market price at the beginning or end of each offering period.   

Equity Grants

The Compensation Committee of the Company’s Board of Directors authorized awards from approved stock incentive plans of RSAs to non-employee Directors and RSAs and PSUs to certain Company officers, which together totaled 387,000 shares and had an aggregate market value of $2.1 million during the nine months endedSeptember 30, 2012.  The performance component of PSU awards granted in 2012 is based on attaining specified levels of adjusted EBITDA, as defined in the grant, for the 2012 calendar year.  The Company currently believes that achievement of the performance component is probable, and will reevaluate this likelihood on a quarterly basis.   

The Compensation Committee of the Company’s Board of Directors authorized awards from approved stock incentive plans of RSAs to non-employee Directors and certain Company officers, which totaled 360,000 shares and had an aggregate market value of $1.9 million during the nine months endedSeptember 30, 2011.   

The Compensation Committee of the Company’s Board of Directors authorized grants of stock options from approved stock incentive plans to certain Company officers totaling 159,000 and 599,000 shares during the nine months endedSeptember 30, 2012 and 2011, respectively, with exercise prices equal to the stock prices on the respective grant dates.   

Employees purchased common stock totaling 72,000 and 64,000 shares in the nine months endedSeptember 30, 2012 and 2011, respectively, through the Company’s ESPP. 

Stock Compensation Expense

The Company values its RSAs, RSUs, and PSUs based on the stock price on the date of grant.  The Company expenses the related compensation cost of RSAs and RSUs and of PSUs, for which achievement of the performance component is probable, using the straight-line method over the vesting period.  The Company uses a Black-Scholes model to value its stock option grants and expenses the related compensation cost using the straight-line method over the vesting period.  The fair value of the Company’s ESPP options is also determined using a Black-Scholes model and is expensed over the vesting period.  The fair value of stock options and ESPP options is determined on the grant date using assumptions for the expected term, expected volatility, dividend yield, and the risk-free interest rate.  The period expense is then determined based on this valuation and, at that time, an estimated forfeiture rate is used to reduce the expense recorded.  The Company’s estimate of pre-vesting forfeitures is primarily based on the recent historical experience of the Company and is adjusted to reflect actual forfeitures at each vesting date.   

The following weighted‑average assumptions were used to determine the fair value of options: 

	Three Months Ended				Nine Months Ended
	September 30, 2012				September 30, 2012
	Stock Options		ESPP Options		Stock Options		ESPP Options
Expected life of options		N/A		.50 Years		4.25 Years		.50 Years
Expected stock price volatility		N/A		0.44		0.60		0.54
Risk-free interest rate		N/A		0.16%		0.71%		0.06%

	Three Months Ended				Nine Months Ended
	September 30, 2011				September 30, 2011
	Stock Options		ESPP Options		Stock Options		ESPP Options
Expected life of options		N/A		.50 Years		4.00 Years		.50 Years
Expected stock price volatility		N/A		0.36		0.65		0.41
Risk-free interest rate		N/A		0.10%		1.25%		0.16%

The following table summarizes stock compensation expenses (in thousands): 

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2012		2011		2012		2011
RSA, RSU, and PSU expense	$	513	$	369	$	1,533	$	1,038
Stock option and ESPP option expense		295		388		875		1,270
Total stock compensation expense	$	808	$	757	$	2,408	$	2,308

Included in the total stock compensation expense, as applicable in each period, were expenses related to RSAs, RSUs, PSUs, and stock options issued in each respective year, as well as those issued in prior periods that continue to vest during the period, and compensation related to the Company’s ESPP.  These amounts were recorded as stock compensation expense and were subject to the Company’s normal allocation of expenses to deferred preservation costs and inventory costs.  The Company capitalized $53,000 and $61,000 in the three months ended September 30, 2012 and 2011, respectively, and $157,000 and $168,000 in the nine months endedSeptember 30, 2012 and 2011, respectively, of the stock compensation expense into its deferred preservation costs and inventory costs.

As of September 30, 2012 the Company had total unrecognized compensation costs of $1.3 million related to unvested stock options and $2.6 million related to RSAs, RSUs, and PSUs, before considering the effect of expected forfeitures.  As of September 30, 2012 this expense is expected to be recognized over a weighted-average period of 1.43 years for stock options, 1.34 years for RSAs, 1.73 years for RSUs, and1.18 years for PSUs.