Share-Based Compensation Arrangements

12 Months Ended

Dec. 31, 2012

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

Share-Based Compensation Arrangements

Share-Based Compensation Arrangements

We may grant stock appreciation rights ("SARs") and phantom shares under our Long-Term Incentive Cash Award Plan. As both the SARs and the phantom shares are settled in cash rather than by issuing equity instruments, we record an expense with a corresponding liability on our balance sheet. The expense is based on the fair value of the awards on the last day of the reporting period and represents an amortization of that fair value over the vesting period of the awards.

The SARs and phantom shares do not entitle recipients to receive any of our common shares, nor do they provide recipients with any voting or other shareholder rights. Similarly, since the awards are not paid out in the form of equity, they do not change the number of shares we have available for any future equity compensation we may elect to grant, and they do not dilute existing shareholders' ownership of the Company. However, because the value of the awards is based on the value of our Class A common stock, we believe they align employee and shareholder interests, and provide retention benefits in much the same way as would stock options and restricted stock awards.

Prior to March 7, 2011, two types of incentives were awarded, SARs and non-performance based phantom shares. SARs and non-performance phantom shares were generally granted to key employees in the first quarter of each year and vested one-third each year over a three year period. SARs were granted with an exercise price equal to the closing price of our common stock on the date of the grant, as reported by the NASDAQ Stock Market and expire seven years after their grant date.

In 2011, we granted performance phantom shares to make our annual equity incentives reflect our performance during the year. The threshold level of performance necessary for any performance based phantom shares to be issued was not achieved for the twelve months ended December 31, 2011, therefore we did not record any expense in 2011 for these performance based phantom shares.

On March 2, 2012, we granted performance phantom shares to make our annual equity incentives reflect our performance during the year. The actual phantom share award amounts for 2012 were determined based on a specified performance target by location with respect to performance in 2012 and 25% of the potential awards were determined at the discretion of our Board of Directors. For the year ended December 31, 2012, we achieved our target performance specified in some of our awards (including to our executives), but were below our target performance specified in other awards and the Board of Directors granted the full discretionary awards to some of the participants (including our executives), but less or zero to others.

Total compensation expense (income) related to this plan for the years ended December 31, 2012, 2011 and 2010 was $2.6 million, $(1.6) million and $1.5 million, respectively. The balance of the fair value that has not yet been recorded as expense is considered an unrecognized liability. The total unrecognized compensation liability as calculated at December 31, 2012 and 2011 was $0.8 million and $0.1 million, respectively. Total cash paid under this plan for the years ended December 31, 2012 and 2011 was $0.1 million and $0.9 million, respectively.

A summary of activity under the plans during 2012 is as follows:

SARs:	Number of awards	Weighted average exercise price per share
Outstanding at January 1, 2012	108,794	$	10.89
Granted	—	$	—
Exercised	—	$	—
Forfeited	(8,255)	$	15.42
Outstanding at December 31, 2012	100,539	$	11.14

Phantom Shares: *	Number of awards		Weighted average grant date value per share
Outstanding at January 1, 2012	79,101		$	9.31
Granted	435,866		$	4.73
Vested	(24,864	)	$	9.88
Forfeited	(2,433	)	$	12.86
Outstanding at December 31, 2012	487,670		$	5.67
* Includes both non-performance and performance based shares.

The initial value of the phantom shares is based on the closing price of our Class A common stock as of the grant date. The initial value of the SARs, which are the economic equivalent of options, is based on a Black-Scholes model as of the grant date.

Our liability with regard to these awards is re-measured in each quarterly reporting period. The fair value of the phantom shares is based on the closing stock price on our Class A common stock on the last day of the period. At December 31, 2012 and December 31, 2011, the closing stock price on our Class A common stock was $4.62 and $4.70 respectively.

We measure the fair value of each SAR based on the closing stock price of Class A common stock on the last day of the period, using a Black-Scholes valuation model. The fair value of each SAR was estimated as of December 31, 2012, 2011 and 2010 using the following assumptions:

	2012		2011		2010
Risk-free interest rate	0.27%-0.52%		0.4%-0.83%		1.65%-2.39%
Dividend yield	0.0	%	0.0	%	0.0	%
Expected life (years)	2.2-4.0 years		3.2-5.0 years		4.2-6.0 years
Volatility	63.63	%	80.66	%	85.95	%

In addition to the awards to our employees, we grant deferred stock units ("DSUs") to our non-employee directors under our Outside Directors' Deferred Stock Unit Plan. These awards are fully vested when made. We measure the fair value of outstanding DSUs based upon the closing stock price of our Class A common stock on the last day of the reporting period. We pay out the DSUs to a director after the earlier of a Company Change in Control, as defined in the plan, or the date when he or she ceases to be a non-employee director for any reason. Since the DSUs are settled in cash rather than by issuing equity instruments, we record an expense with a corresponding liability on our balance sheet. We recorded a liability of $0.6 million and $0.1 million as of December 31, 2012 and December 31, 2011, respectively.