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Stock-Based Compensation
 6 Months Ended
Jun. 30, 2011
Stock-Based Compensation  
Stock-Based Compensation

7. Stock-Based Compensation

        The Company maintains two award plans under which stock-based compensation has been granted, the 2006 Stock Option Plan (the "2006 Plan") and the 2007 Long-Term Incentive Plan (the "LTIP"). Upon the adoption of the LTIP awards were no longer granted under the 2006 Plan. The LTIP provides for grants of (a) incentive stock options qualified as such under U.S. federal income tax laws, (b) stock options that do not qualify as incentive stock options, (c) stock appreciation rights, (d) restricted stock awards, (e) performance awards, (f) phantom stock, (g) stock bonuses, (h) dividend equivalents, or (i) any combination of such awards.

Stock Options

        During the six months ended June 30, 2011, the Company granted options to purchase 90,080 shares of the Company's common stock to various employees, including the Company's named executive officers. The grant date fair value of these options, using the Black-Scholes-Merton option-pricing model, was approximately $11.88 per share. These options vest ratably, on an annual basis, over a three-year period. During the six months ended June 30, 2011, employees exercised 140,049 options. Total intrinsic value of options exercised was $2.5 million for the six months ended June 30, 2011.

Restricted Stock

        During the six months ended June 30, 2011, the Company granted restricted stock awards covering 47,918 shares of common stock to various employees, including the Company's named executive officers, and 17,367 shares of common stock to eligible members of the Board of Directors. The restricted stock awards granted to employees vest as follows: 41,230 shares vest ratably, on an annual basis, over a five-year period beginning on March 24, 2012, and 6,688 shares cliff vest on May 12, 2016. The restricted stock awards granted to the eligible members of the Board of Directors vest ratably, on an annual basis, over a three-year period. The grant date fair value of the restricted stock was as follows: $24.18 for 58,597 shares and $24.67 for 6,688 shares, which was equal to the closing market price of the Company's common stock on the date of grant. On March 24, 2011, a total of 11,128 shares of restricted stock from a prior grant vested.

Performance Awards

        During the six months ended June 30, 2011, the Company granted performance stock awards covering 34,179 shares of common stock, at target level, to certain key management personnel, including the Company's named executive officers. The grant date fair value of the performance stock awards was $24.18, which was equal to the closing market price of the Company's common stock on the date of grant. The performance stock awards will cliff vest on December 31, 2013, subject to the achievement of certain specified levels of the Company's average return-on-equity ("ROE") over the performance period.

Stock-Compensation Expense

        The Company recognizes stock-based compensation expense on a straight-line basis over the vesting period. Stock-based compensation cost is adjusted for changes in estimated and actual forfeitures and also for changes in estimated performance shares that will be earned. The Company recognized stock-based compensation expense of approximately $1.0 million and $0.8 million for the six months ended June 30, 2011 and 2010, respectively, in selling, general and administrative expenses. Stock-based compensation expense for the six months ended June 30, 2011 included a net reduction in expense of $0.2 million related to a change in the estimated forfeiture rates for the various awards and a change in the estimated number of performance shares that are expected to be earned. As of June 30, 2011, there was approximately $4.8 million of total unrecognized stock-based compensation cost related to awards granted under the LTIP, net of estimated forfeitures. Total unrecognized compensation cost will be adjusted for any future changes in estimated and actual forfeitures.

Retainer Share Election Program

        Each of the Company's independent directors receives a retainer to be paid annually in cash, unless the director chooses to receive a portion of the retainer in the form of common stock. For the six months ended June 30, 2011, a total of 1,843 shares of the Company's stock, valued at approximately $45,000, was issued to directors of the Company who elected to receive stock in lieu of cash. The fair value of the stock issued was $24.67 per share, which was equal to the closing market price of the Company's common stock on May 12, 2011, the date of issuance.