Note 5 - Stock-Based Compensation

6 Months Ended

Jun. 30, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

5.       Stock-Based Compensation

We account for share-based awards in accordance with ASC Topic 718, Compensation-Stock Compensation, which requires the fair value of stock-based compensation awards to be amortized as an expense over the vesting period.  Stock-based compensation awards are valued at the fair value on the date of grant.

During the six months ended June 30, 2012, we issued 462,119 shares of common stock to our officers and key employees, 49,552 shares of common stock to our independent directors (excluding directors appointed by MP CA Homes LLC (“MatlinPatterson”) who did not receive any stock awards) and 7,610 shares to all employees in connection with a companywide stock grant.  Additionally, in connection with the Company’s 2012 incentive compensation program, on April 2, 2012 (“issuance date”) the Compensation Committee of our Board of Directors granted long-term equity awards to executive officers and certain key employees of the Company.  The grant consisted of the following awards:

• Restricted Stock – 356,725 shares of restricted common stock vesting in three equal installments on each of the first three anniversaries of the issuance date;

• Capped Stock Appreciation Rights (“SAR”) – 3,374,779 capped common stock appreciation rights with a grant price equal to the closing price of the Company’s common stock ($4.29) on the issuance date, vesting in three equal installments on each of the first three anniversaries of the issuance date (the "grant price"), and with the value per share of the award capped at the difference between twelve dollars ($12) and the grant price; and

• Performance Share Awards – 405,012 target performance share awards with payouts at 1-4 times the target number of shares of common stock based on the Company’s actual earnings per share for the year ended December 31, 2014.

On April 2, 2012 the Compensation Committee of our Board of Directors also provided a one-time grant of 2,700,000 market based capped stock appreciation rights ("Market Based SAR") to 12 senior executives.  These market based grants have a five year term and vest in three equal tranches only if the Company’s common stock closing price reaches eight ($8), nine ($9) and ten ($10) dollars, respectively, for twenty consecutive trading days.  The value per share of the award is capped at the difference between twelve dollars ($12) and the grant price.

Total compensation expense recognized related to stock-based compensation was $1.9 million and $3.5 million for the three months ended June 30, 2012 and 2011, respectively.  For the six months ended June 30, 2012 and 2011, we recognized stock-based compensation expense of $3.0 million and $5.5 million, respectively.  As of June 30, 2012, total unrecognized stock-based compensation expense was $9.4 million, with a weighted average period over which the remaining unrecognized compensation expense is expected to be recorded of approximately 2.2 years.