Stock Based Compensation

12 Months Ended

Dec. 31, 2011

Stock Based Compensation [Abstract]

Stock Based Compensation

(15) Stock Based Compensation

The Company recognizes compensation costs for stock option awards to employees based on their grant-date fair value.  The value of each stock option is estimated on the date of grant using the Black-Scholes option-pricing model.  The weighted-average fair value per share for the stock options granted to employees for the years ended December 31, 2011, 2010 and 2009 were $3.18, $2.45 and $3.31, respectively.

The following assumptions were used in determining the fair value of stock options for grants issued in 2011, 2010 and 2009:

	2011	2010	2009
Expected volatility	68.91%-71.53%	66.48%-68.13%	48.10%-65.11%
Expected term	4.75 years	4.75 years	4.75 years
Risk-free interest rate	1.02%-2.00%	1.25%-2.52%	2.38%-2.77%

The Company does not have any publicly traded stock options; therefore, expected volatilities are based on historical volatility of the Company's stock.  The risk-free interest rate is based on the yield of a zero-coupon U.S. Treasury bond whose maturity period approximates the option's expected term.  The expected term was utilized based on the “simplified” method for determining the expected term of stock options in Staff Accounting Bulletin (“SAB”) No. 107, “Share-Based Payment.”  The Company also considered SAB No. 110 when determining the expected term of stock options.

For 2011, 2010, and 2009, the Company recorded $1,028, $1,072 and $648, respectively, in selling, general and administrative expenses for stock options.  As of December 31, 2011, the total compensation cost related to unvested stock option awards granted to employees but not yet recognized was $2,943.  The cost will be amortized on a straight-line basis over the remaining weighted-average vesting period of 2.7 years.

Cambrex senior executives, until 2010, participated in an executive incentive plan which rewarded achievement with restricted stock units.  Awards were made annually if certain targets were met and vested in one-third increments on the first, second and third annual anniversaries of the grant.  On the third anniversary of the grant, restrictions on sale or transfer are removed and shares are issued to executives.  In the event of termination of employment or retirement, the participant is entitled to the vested portion of the restricted stock units and forfeits the remaining amount; the three-year sale and transfer restriction remains in place.  For certain employees with employment contracts, all shares vest upon certain events, including a change in control.  In the event of death or permanent disability, all shares vest and the deferred sales restriction lapses.  These awards are classified as equity awards.

For 2011, 2010, and 2009, the Company recorded $497, $645, and $658, respectively, in selling, general and administrative expenses for restricted stock.  As of December 31, 2011, the total compensation cost related to unvested restricted stock granted but not yet recognized was $177. The cost will be amortized on a straight-line basis over the remaining weighted-average vesting period of 1.1 years.

In May 2008, the Company granted a target award of 43,000 performance shares, with a potential award of up to 86,000 shares to the current CEO.  These performance shares were dependent upon the Company's performance measured against certain financial metrics over a three year period ending June 30, 2011, as compared to an external peer group.  The Company issued 53,750 shares under this award in 2011 and recognized expense related to these shares over the vesting period, based upon measurement against the financial metrics.  For 2011, 2010 and 2009, the Company recorded $40, $157 and $69, respectively, in selling, general and administrative expense related to these performance shares.

The following table is a summary of the Company's stock option activity issued to employees and related information:

				Weighted Average
	Number of Shares			Exercise Price		Options Exercisable
Outstanding at December 31, 2009		2,020,369		$	11.27		886,579
Granted		228,000			4.38
Forfeited or expired		(394,576	)		24.97
Outstanding at December 31, 2010		1,853,793			7.51		863,623
Granted		586,000			5.55
Exercised		(31,500	)		4.61
Forfeited or expired		(118,420	)		14.80
Outstanding at December 31, 2011		2,289,873			6.67
Exercisable at December 31, 2011				$	8.01		1,122,122

The aggregate intrinsic value for all stock options exercised for the years ended December 31, 2011 was $70 and for each of 2010 and 2009 was negligible.  The aggregate intrinsic value for all stock options outstanding as of December 31, 2011 was $3,735.  The aggregate intrinsic value for all stock options exercisable as of December 31, 2011 was $1,626.

A summary of the Company's nonvested stock options and restricted stock activity is presented below:

	Nonvested Stock Options					Nonvested Restricted Stock
	Number of Shares			Weighted-Average Grant-Date Fair Value		Number of Shares			Weighted-Average Grant-Date Fair Value
Nonvested at December 31, 2009		1,133,790		$	2.67		90,686		$	11.43
Granted		228,000			2.45		125,428			5.18
Vested during period		(340,421	)		2.77		(109,990	)		9.32
Forfeited		(31,199	)		2.87		(800	)		13.75
Nonvested at December 31, 2010		990,170			2.57		105,324			6.17
Granted		586,000			3.18		61,072			5.24
Vested during period		(370,919	)		2.51		(107,497	)		5.99
Forfeited		(37,500	)		2.89		-			-
Nonvested at December 31, 2011		1,167,751		$	2.89		58,899		$	5.54