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Stock-Based Incentive Plans | 3 Months Ended
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Mar. 31, 2012
Stock-Based Incentive Plans |
Stock-Based Incentive Plans |
8. Stock-Based Incentive Plans The Company currently has one stock-based incentive plan, which incorporates and supersedes its two previous plans (see Note 1 “Basis of Presentation — Accounting for Stock-Based Compensation”). Participants are granted stock-based awards only if the applicable Company-wide or profit-center operating goals, or both, established by the Compensation and Leadership Development Committee of the Board of Directors at the beginning of the year, are met. Certain participants may have additional goals based on strategic initiatives of the Company. The fair value of each restricted stock unit award is estimated on the date of the award based on the closing market price of the underlying stock on the day preceding the date of the award. On January 30, 2012, 361,061 restricted stock units were awarded, including 8,550 awarded to the Company’s independent directors, at an estimated value of $33.23 per share, based on the closing price on January 27, 2012. The restrictions on these awards generally lapse one quarter on the date of the award and one quarter on each of the first, second and third anniversaries of the date of the award. The fair value of each stock option award was estimated on the date of grant using the Black-Scholes option pricing model. Expected volatility is based on historical volatilities of the Company’s common stock measured monthly over a term that is equivalent to the expected life of the award. The expected term of awards granted is estimated based on the Company’s prior exercise experience and future expectations of the exercise and termination behavior of the grantees. The risk-free rate is based on the yield of United States Treasury zero-coupon bonds with maturities comparable to the expected life in effect at the time of grant. The dividend yield is based on the expected dividend yield on the grant date. Black-Scholes option pricing model assumptions for stock options granted in 2011 are as follows:
Number |  |  |  | Risk- |  |  |  |  |  |  |  |  |  | Weighted |
of Options |  |  |  | Free |  |  |  |  |  |  |  |  |  | Average |
Granted |  | Grant |  | Interest |  | Dividend |  | Expected |  |  |  |  |  | Fair |
(in thousands) |  | Date |  | Rate |  | Yield |  | Life |  | Volatility |  | Exercise Price |  | Value |
1994 Plan |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1,362 |  | 02/03/11 |  | 2.62 | % | 1.75 | % | 6.2 years |  | 39.0 | % | $ 29.66 to $32.63 |  | $ | 10.33 |
1995 Plan |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
30 |  | 02/15/11 |  | 2.92 | % | 1.76 | % | 6.6 years |  | 38.0 | % | $ 29.58 |  | $ | 10.49 |
No stock options were granted in 2012. The following table summarizes the Company’s unvested restricted stock unit activity for the three months ended March 31, 2012:
|  |  |  |  |  | Aggregate |
|  |  |  | Weighted- |  | Intrinsic |
|  | Shares |  | Average |  | Value * |
Unvested Restricted Stock Units (RSUs) |  | (in thousands) |  | Price |  | (in thousands) |
Outstanding at January 1, 2012 |  | — |  | $ | — |  |  |
Awarded |  | 361 |  | 33.23 |  |  |
Vested |  | (93 | ) | 33.23 |  |  |
Forfeited |  | (1 | ) | 33.23 |  |  |
Outstanding at March 31, 2012 |  | 267 |  | $ | 33.23 |  | $ | 8,612 |
Outstanding and expected to vest at March 31, 2012 |  | 259 |  | $ | 33.23 |  | $ | 8,356 |
* The intrinsic value is calculated using the closing price per share of $32.25 as reported by the New York Stock Exchange on March 30, 2012. The total intrinsic value of restricted stock units vested during the three months ended March 31, 2012, was $3.1 million, based on the market value on the award date. The following table summarizes the Company’s stock option activity for the three months ended March 31, 2012:
|  |  |  |  |  | Weighted- |  |  |
|  |  |  | Weighted- |  | Average |  | Aggregate |
|  |  |  | Average |  | Remaining |  | Intrinsic |
|  | Shares |  | Exercise |  | Contractual |  | Value * |
Non-Qualified Stock Options |  | (in thousands) |  | Price |  | Life (in years) |  | (in thousands) |
Outstanding at January 1, 2012 |  | 2,134 |  | $ | 31.15 |  |  |  |  |
Exercised |  | (74 | ) | 23.68 |  |  |  |  |
Forfeited |  | (17 | ) | 34.86 |  |  |  |  |
Outstanding at March 31, 2012 |  | 2,043 |  | $ | 31.39 |  | 4.6 |  | $ | 5,105 |
Outstanding and expected to vest at March 31, 2012 |  | 2,000 |  | $ | 31.44 |  | 4.5 |  | $ | 4,976 |
Exercisable at March 31, 2012 |  | 963 |  | $ | 33.82 |  | 3.2 |  | $ | 1,835 |
* The intrinsic value represents the amount, if any, by which the fair market value of the underlying common stock exceeds the exercise price of the stock option, using the closing price per share of $32.25 as reported by the New York Stock Exchange on March 30, 2012. The total intrinsic value of stock options exercised during the three months ended March 31, 2012 and 2011, was $0.7 million and $40 thousand, respectively. A summary of the status of unvested stock options as of March 31, 2012, and changes during the three months ended March 31, 2012, are presented below:
|  |  |  | Weighted- |
|  |  |  | Average |
|  | Shares |  | Grant-Date |
Unvested Options |  | (in thousands) |  | Fair Value |
Unvested at January 1, 2012 |  | 1,242 |  | $ | 10.11 |
Vested |  | (159 | ) | 9.82 |
Forfeited |  | (3 | ) | 10.33 |
Unvested at March 31, 2012 |  | 1,080 |  | $ | 10.15 |
As of March 31, 2012, $14.4 million of total unrecognized compensation cost was related to unvested stock-based compensation arrangements under the 2011 Incentive Plan. This cost is expected to be recognized over a weighted-average period of 2.8 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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