NOTE 6 - Shareholders' Equity and Stock Options

Share Repurchase Program and Treasury Shares Held (Common Stock)

On December 7, 2011, HMEC's Board of Directors (the "Board") authorized a share repurchase program allowing repurchases of up to $50,000. The share repurchase program authorizes the opportunistic repurchase of HMEC's common shares in open market or privately negotiated transactions, from time to time, depending on market conditions. The share repurchase program does not have an expiration date and may be limited or terminated at any time without notice. As of December 31, 2011, the Company had repurchased 154,708 shares of its common stock, or 0.4% of the outstanding shares on December 31, 2010, at an aggregate cost of $2,047, or an average price of $13.21 per share, under this share repurchase program. The repurchase of shares was financed through use of cash.

In accordance with the terms of the Company's incentive compensation plans, in 2011 HMEC received 60,126 shares of its common stock in connection with the conversion of restricted stock units. The shares were received in satisfaction of withholding taxes due on the distributions.

At December 31, 2011, the Company held 22,028,030 shares in treasury.

Authorization of Preferred Stock

In 1996, the shareholders of HMEC approved authorization of 1,000,000 shares of $0.001 par value preferred stock. The Board of Directors is authorized to (1) direct the issuance of the preferred stock in one or more series, (2) fix the dividend rate, conversion or exchange rights, redemption price and liquidation preference, of any series of the preferred stock, (3) fix the number of shares for any series and (4) increase or decrease the number of shares of any series. No shares of preferred stock were outstanding at December 31, 2011 and 2010.

2010 Comprehensive Executive Compensation Plan

In 2010, the shareholders of HMEC approved the 2010 Comprehensive Executive Compensation Plan (the "Comprehensive Plan"). The Comprehensive Plan is a consolidation of the HMEC Amended and Restated 2002 Incentive Compensation Plan, the Amended and Restated HMEC Deferred Equity Compensation Plan for Directors and the Amended and Restated HMEC Deferred Compensation Plan for Employees (collectively, the "Preexisting Plans"). Previously, shareholders had approved and authorized 9,000,000 shares of common stock under prior incentive compensation plans and 600,000 shares of common stock under directors deferred compensation plans. Authorized shares that remained available for issuance under the Preexisting Plans were authorized and made available under the Comprehensive Plan, but no additional shares were reserved under the Comprehensive Plan. As of December 31, 2011, approximately 1.6 million shares were available for grant under the Comprehensive Plan. Shares of common stock issued under the Comprehensive Plan may be either authorized and unissued shares of HMEC or shares that have been reacquired by HMEC; however, new shares have been issued historically.

Director Common Stock Units

Deferred compensation of directors is in the form of common stock units. As of December 31, 2011, 2010 and 2009, 113,502 units, 106,845 units and 231,824 units, respectively, were outstanding representing an equal number of common shares to be issued in the future. The outstanding units of directors serving on the Board accrue dividends at the same rate as dividends paid to HMEC's shareholders; outstanding units of retired directors do not accrue dividends. These dividends are reinvested into additional common stock units.

Employee Common Stock Units

Deferred compensation of employees is in the form of common stock units. As of December 31, 2011, 2010 and 2009, 115,087 units, 195,088 units and 191,081 units, respectively, were outstanding representing an equal number of common shares to be issued in the future. Distributions of employee deferred compensation are allowed to be either in common shares or cash. Through December 31, 2011, all distributions have been in cash. The outstanding units accrue dividends at the same rate as dividends paid to HMEC's shareholders. These dividends are reinvested into additional common stock units.

Stock Options

Options to purchase shares of HMEC common stock may be granted to executive officers, other employees and directors. The options become exercisable in installments based on service generally beginning in the first year from the date of grant and generally become fully vested 4 to 5 years from the date of grant. The options generally expire 7 to 10 years from the date of grant. The exercise price of the option is equal to the market price of HMEC's common stock on the date of grant resulting in a grant date intrinsic value of $0.

Changes in outstanding options were as follows:


	Weighted Average	Range of		Options
	Option Price	Option Prices				Vested and
	per Share	per Share		Outstanding		Exercisable

December 31, 2010	$ 15.21		$ 6.91-$21.77		2,773,115		1,772,023

Granted	$ 17.01		$17.01		313,000		-
Vested	$ 12.18		$ 6.91-$20.23		-		586,658
Exercised	$ 14.60		$ 6.91-$17.56		(136,290)		(136,290)
Forfeited	$ 15.41		$ 6.91-$20.80		(102,416)		(102,416)
Expired	$ 18.62		$19.67-$21.77		(246,826)		(246,826)

December 31, 2011	$ 15.13		$ 6.91-$21.64		2,600,583		1,873,149

For options outstanding as of December 31, 2011, information segregated by ranges of exercise prices was as follows:


			Total Outstanding Options				Vested and Exercisable Options
	Range of Option Prices per Share		Options		Weighted Average Option Price per Share	Weighted Average Remaining Term	Options		Weighted Average Option Price per Share	Weighted Average Remaining Term

		$ 6.91-$ 9.04		577,274	$ 7.66	4.1 years		429,132	$ 7.92	4.1 years
		$13.83-$20.23		1,789,159	$16.76	3.2 years		1,209,867	$17.21	2.1 years
		$20.80-$21.64		234,150	$21.10	0.3 years		234,150	$21.10	0.3 years
Total		$ 6.91-$21.64		2,600,583	$15.13	3.1 years		1,873,149	$15.57	2.3 years

The weighted average prices of vested and exercisable options as of December 31, 2010 and 2009 were $17.03 and $17.31, respectively.

As of December 31, 2011, based on a closing stock price of $13.71 per share, the aggregate intrinsic (in-the-money) values of vested options and all options outstanding were $2,486 and $3,494, respectively.

Restricted Common Stock Units

Restricted common stock units may be granted to executive officers, other employees and directors. As of December 31, 2011, 2010 and 2009, 1,135,840 units, 1,106,166 units and 821,421 units, respectively, were outstanding representing an equal number of common shares to be issued in the future. The restricted common stock units vest in installments based on service or attainment of performance criteria generally beginning in the first year from the date of grant and generally become fully vested 1 to 5 years from the date of grant. On the date of grant, the fair value of restricted common stock units is equal to the market price of HMEC's common stock on that date. The outstanding units accrue dividends at the same rate as dividends paid to HMEC's shareholders. These dividends are reinvested into additional restricted common stock units.

Changes in outstanding restricted common stock units were as follows:


	Outstanding		Vested
		Weighted Average		Weighted Average
		Grant Date Fair		Grant Date Fair
	Units	Value per Unit	Units	Value per Unit

December 31, 2010	1,106,166	$12.47	185,504	$18.52

Granted (1)	329,574	$16.57	-	-
Vested	-	-	194,977	$ 7.93
Forfeited	(108,647)	$11.06	-	-
Distributed (2)	(191,253)	$10.85	(191,253)	$10.85

December 31, 2011	1,135,840	$14.07	189,228	$15.35

(1)	Includes dividends reinvested into additional restricted common stock units.

(2)	Includes distributed units which were utilized to satisfy withholding taxes due on the distribution.