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STOCK-BASED COMPENSATION | 9 Months Ended
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Sep. 30, 2011
STOCK-BASED COMPENSATION [Abstract] |
STOCK-BASED COMPENSATION | NOTE 4 - STOCK-BASED COMPENSATION During the three and nine months ended September 30, 2011, total compensation expense recognized in the condensed consolidated statements of income related to stock options and restricted stock awards reduced income before taxes by $3.8 million and $9.3 million, respectively, and net income by $2.2 million and $5.4 million, respectively. During the three and nine months ended September 30, 2010, total compensation expense recognized in the condensed consolidated statements of income related to stock options and restricted stock awards reduced income before taxes by $2.3 million and $6.2 million, respectively, and net income by $1.3 million and $3.6 million, respectively. The Company received $3.2 million and $1.9 million as of September 30, 2011 and September 30, 2010, respectively, in cash proceeds from stock option exercises. The net tax benefit (provision) recognized in equity for stock compensation plans was $546 thousand and $(156) thousand for September 30, 2011 and September 30, 2010, respectively. As of September 30, 2011, there are 4,810,907 shares available to be issued, subject to the Company's current 1998 Stock Incentive Plan, as amended. Stock Options The Company issues fixed stock options to certain employees, officers, and directors. Stock options are issued at the current market price on the date of grant with a three-year or four-year vesting period and contractual terms of 7 or 10 years. The Company issues new shares upon the exercise of stock options. A summary of activity for the Company's stock options as of and for the nine months ended September 30, 2011 is presented below:
|  |  |  |  |  |  | Weighted |  |  |
|  |  |  |  | Weighted |  | Average |  | Aggregate |
|  |  |  |  | Average |  | Remaining |  | Intrinsic |
|  |  |  |  | Exercise |  | Contractual |  | Value |
|  | Shares |  |  | Price |  | Term |  | (In thousands) |
Outstanding at beginning of period |  |  | 1,438,979 |  |  | $ | 24.21 |  |  |  |  |
Granted |  |  | 8,654 |  |  |  | 23.11 |  |  |  |  |
Exercised |  |  | (255,258 | ) |  |  | 12.60 |  |  |  |  |
Forfeited |  |  | (90,309 | ) |  |  | 26.34 |  |  |  |  |
Outstanding at end of period |  |  | 1,102,066 |  |  | $ | 26.72 |  | 2.22 years |  | $ | 419 |
Vested or expected to vest at end of period |  |  | 1,089,954 |  |  | $ | 26.81 |  | 2.20 years |  | $ | 396 |
Exercisable at end of period |  |  | 912,255 |  |  | $ | 28.45 |  | 1.90 years |  | $ | 181 |
A summary of changes in unvested stock options and related information for the nine months ended September 30, 2011 is presented below:
|  |  |  |  | Weighted Average |
|  |  |  |  | Grant Date Fair Value |
Unvested Options |  | Shares |  |  | (per share) |
Unvested at January 1, 2011 |  |  | 416,851 |  |  | $ | 5.04 |
Granted |  |  | 8,654 |  |  |  | 13.21 |
Vested |  |  | (225,582 | ) |  |  | 5.60 |
Forfeited |  |  | (10,112 | ) |  |  | 4.69 |
Unvested at September 30, 2011 |  |  | 189,811 |  |  | $ | 4.76 |
The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions:
|  | Three Months Ended |  |  | Nine Months Ended |
|  | September 30, |  |  | September 30, |
|  | 2011 (5) |  |  | 2010 (5) |  |  | 2011 |  |  | 2010 (5) |
Expected term (1) |  |  | N/A |  |  |  | N/A |  |  | 4 years |  |  |  | N/A |
Expected volatility (2) |  |  | N/A |  |  |  | N/A |  |  |  | 78.1 | % |  |  | N/A |
Expected dividend yield (3) |  |  | N/A |  |  |  | N/A |  |  |  | 0.2 | % |  |  | N/A |
Risk-free interest rate (4) |  |  | N/A |  |  |  | N/A |  |  |  | 1.6 | % |  |  | N/A |
____________
| (1) | The expected term (estimated period of time outstanding) of stock options granted was estimated using the historical exercise behavior of employees.
| (2) | The expected volatility was based on historical volatility for a period equal to the stock option's expected term.
| (3) | The expected dividend yield is based on the Company's prevailing dividend rate at the time of grant.
| (4) | The risk-free rate is based on the U.S. Treasury strips in effect at the time of grant equal to the stock option's expected term.
| (5) | The Company did not issue any stock options during the three months ended September 30, 2011 and the three and nine months ended September 30, 2010.
During the three and nine months ended September 30, 2011 and 2010, information related to stock options is presented as follows:
|  | Three Months Ended |  |  | Nine Months Ended |
|  | September 30, |  |  | September 30, |
|  | 2011 |  |  | 2010 |  |  | 2011 |  |  | 2010 |
Weighted average grant date fair value of stock options granted during the period (1) |  | $ | - |  |  | $ | - |  |  | $ | 13.21 |  |  | $ | - |
Total intrinsic value of options exercised (in thousands) |  | $ | 123 |  |  | $ | 353 |  |  | $ | 2,175 |  |  | $ | 989 |
Total fair value of options vested (in thousands) |  | $ | - |  |  | $ | 32 |  |  | $ | 1,263 |  |  | $ | 2,108 |
____________________
| (1) | The Company did not issue any stock options during the three months ended September 30, 2011 and the three and nine months ended September 30, 2010.
As of September 30, 2011, total unrecognized compensation cost related to stock options amounted to $361 thousand. The cost is expected to be recognized over a weighted average period of 2.0 years. Restricted Stock In addition to stock options, the Company also grants restricted stock awards to directors, officers and employees. The restricted stock awards fully vest after three to five years of continued employment from the date of grant; some of the awards are also subject to achievement of certain established financial goals. The Company becomes entitled to an income tax deduction in an amount equal to the taxable income reported by the holders of the restricted stock when the restrictions are released and the shares are issued. Restricted stock awards are forfeited if officers and employees terminate prior to the lapsing of restrictions or if established financial goals are not achieved. The Company records forfeitures of issued restricted stock as treasury share repurchases. A summary of the activity for restricted stock awards as of September 30, 2011, including changes during the nine months then ended, is presented below:
|  |  |  |  | Weighted |
|  |  |  |  | Average |
|  | Shares |  |  | Price |
Outstanding unvested at beginning of period |  |  | 1,789,498 |  |  | $ | 17.09 |
Granted |  |  | 704,970 |  |  |  | 21.42 |
Vested |  |  | (198,510 | ) |  |  | 24.44 |
Forfeited |  |  | (202,671 | ) |  |  | 17.76 |
Outstanding unvested at end of period |  |  | 2,093,287 |  |  | $ | 17.79 |
Restricted stock awards are valued at the closing price of the Company's stock on the date of award. The weighted average fair values of restricted stock awards granted during the nine months ended September 30, 2011 and 2010 were $21.42 and $16.82, respectively. The total fair value of restricted stock awards vested for the three months ended September 30, 2011 and September 30, 2010 was $1.5 million and $533 thousand, respectively. The total fair value of restricted stock awards vested for the nine months ended September 30, 2011 and September 30, 2010 was $4.0 million and $2.2 million, respectively. As of September 30, 2011, total unrecognized compensation cost related to restricted stock awards amounted to $23.4 million. This cost is expected to be recognized over a weighted average period of 2.0 years.

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher AICPA -Name Statement of Position (SOP) -Number 93-6 -Paragraph 53 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 123R -Paragraph 64, 65, A240 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 + Details
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