Share-Based Compensation Arrangements

3 Months Ended

Mar. 31, 2012

Share-Based Compensation Arrangements [Abstract]

Share-Based Compensation Arrangements

NOTE 9. Share-Based Compensation Arrangements

Prior to March 7, 2011, under our Long-Term Incentive Cash Award Plan, two types of incentives were awarded, both of which were based upon the value of our Class A shares; stock appreciation rights (“SARs”) and phantom shares. 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. SARs and phantom shares were generally granted to non-employee directors and key employees in the first quarter of each year, vested one-third each year over a three year period and had a seven year term. For the three months ended March 31, 2012, 18,803 phantom shares vested and were paid in 2012 at a price of $5.08 per share, reducing our liability by $0.1 million.

Effective 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 will be determined based on specified performance targets with respect to performance in 2012 and 25% of the potential awards will be determined at the discretion of our Board of Directors. We record these performance phantom shares as an expense and corresponding liability only when we estimate that it is more likely than not that we will achieve the threshold level of performance necessary for any phantom shares to be awarded. As of March 31, 2012 our estimate of the likelihood of achieving the threshold level of performance resulted in no compensation expense being recorded in this period for performance phantom shares. Had we believed we were on-track to achieve the necessary threshold level for the full year of 2012, the target compensation expense recognized for the quarter ended March 31, 2012 would have been $0.6 million.

Effective March 7, 2011, we granted performance phantom shares to make our annual equity incentives reflect our performance during the year. For the quarter ended March 31, 2011, we did not record any expense, based on our then estimate of our 2011 performance.

We measure the fair value of outstanding phantom shares based upon the closing stock price of our Class A common stock on the last day of the reporting period. At March 31, 2012 and December 31, 2011, the closing stock price on our Class A common stock was $4.02 and $4.70 respectively.

We measure the fair value of each SAR, also 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 March 31, 2012 and 2011 using the following assumptions:

	March 31, 2012	March 31, 2011
Risk-free interest rate	0.49-0.98%	1.76-2.54%
Dividend yield	0.0%	0.0%
Expected life (years)	2.9-4.8 years	3.9-5.8 years
Volatility	70.48%	83.88%

Since both the SARs and the phantom shares are settled in cash rather than by issuing equity instruments, we record them as 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 three-year vesting period of the awards. Total compensation (income) expense related to the plan for the three months ended March 31, 2012 and March 31, 2011 was $(0.1) million and $0.9 million, respectively. The balance of the fair value that has not yet been recorded as expense is considered an unrecognized liability. As of March 31, 2012, lower stock prices have reduced the value of these awards. The total unrecognized compensation liability as calculated at March 31, 2012 and December 31, 2011 was $0.1 million and $0.1 million, respectively.