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Stock-Based Compensation
 3 Months Ended
Mar. 31, 2012
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 (Amended and Restated as of May 5, 2011) (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, and (i) any combination of such awards.

Stock Options

        On March 23, 2012, the Company granted options to purchase 145,354 shares of the Company's common stock to various employees, including the Company's executive officers. The grant date fair value of these options, using the Black-Scholes-Merton option-pricing model, was approximately $8.42 per share. These options will vest ratably over a three-year period. On January 3, 2012, the Company granted options to purchase 23,734 shares of the Company's common stock to the Company's chief financial officer upon the beginning of his employment with the Company. The grant date fair value of these options, using the Black-Scholes-Merton option-pricing model, was approximately $9.48 per share. These options will vest ratably over a four-year period. The Company issued 6,280 new shares to option holders upon the exercise of vested stock options during the three months ended March 31, 2012. Total intrinsic value of options exercised during the three months ended March 31, 2012 was approximately $0.1 million.

Restricted Stock

        On March 23, 2012, the Company granted restricted stock awards covering 56,980 shares of common stock to various employees, including the Company's executive officers, and 24,024 shares of common stock to eligible members of the Board of Directors. The grant date fair value of the restricted stock was $17.48, which was equal to the closing market price of the Company's common stock on the date of grant. The restricted stock awards granted to employees vest ratably, on an annual basis, over a five-year period with the first tranche vesting on March 23, 2013. 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 with the first tranche vesting on March 23, 2013. On January 3, 2012, the Company granted restricted stock awards covering 17,562 shares of common stock to two employees, including the Company's chief financial officer. The grant date fair value of the restricted stock was $19.46, which was equal to the closing market price of the Company's common stock on the date of grant. The restricted stock awards vest over a five-year period. On March 24, 2012, a total of 25,248 shares of restricted stock from prior grants became vested and taxable to the individual holder of the restricted stock awards. The Company received 6,186 of those shares as payment for withholding taxes due by holders of the restricted stock awards. The withheld shares were retired.

Performance Awards

        On March 23, 2012, the Company granted performance stock awards covering 41,755 shares of common stock, at target level, to certain key management personnel, including the Company's executive officers. The grant date fair value of the performance stock awards was $17.48, 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 the third anniversary of the performance period, subject to achievement of certain specified levels of the Company's average return-on-equity ("ROE") over the performance period.

Stock-based 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 $0.7 million and $0.3 million for the three months ended March 31, 2012 and 2011, respectively, which was included in selling, general and administrative expenses in the accompanying consolidated statements of operations. Stock-based compensation expense for the three months ended March 31, 2011 included a net reduction in expense of $0.2 million for a change in the estimated forfeiture rates for the various awards and a change in the estimated number of performance shares that were expected to be earned. As of March 31, 2012, there was approximately $6.8 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.