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Shareholders' Equity and Stock Options

12 Months Ended

Dec. 31, 2012

Shareholders' Equity and Stock Options [Abstract]

Shareholders' Equity and Stock Options

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.

From December 7, 2011 through December 31, 2011, the Company 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. During 2012, the Company repurchased 915,895 shares of its common stock, or 2.3% of the outstanding shares on December 31, 2011, at an aggregate cost of $15,735, or an average price of $17.16 per share, under this share repurchase program. In total and through December 31, 2012, 1,070,603 shares have been repurchased under the $50,000 program at an average price of $16.59 per share. The repurchase of shares was financed through use of cash. As of December 31, 2012, $32,239 remained authorized for future share repurchases.

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, 2012, the Company held 22,943,925 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, 2012 and 2011.

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 at that time. In 2012, the shareholders of HMEC approved an increase of 2,200,000 in the number of shares of common stock reserved for issuance under the Comprehensive Plan. Shareholders also approved the implementation of a fungible share pool under which grants of full value shares will count against the share limit as two and one half shares for every share subject to a full value award. As of December 31, 2012, approximately 3.3 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.

As further described in the paragraphs below, stock units and stock options under the Comprehensive Plan which were outstanding as of December 31, 2012, 2011 and 2010 were as follows:

		December 31,
		2012					2011					2010
Common stock units related to deferred compensation for Directors				111,928					113,502					106,845
Common stock units related to deferred compensation for employees				116,174					115,087					195,088
Stock options				1,882,939					2,600,583					2,773,115
Restricted common stock units related to incentive compensation				1,423,611					1,135,840					1,106,166
Total				3,534,652					3,965,012					4,181,214

Director Common Stock Units

Deferred compensation of directors is in the form of common stock units, which represent 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, which represent 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, 2012, 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 Option Price per Share					Range of Option Prices per Share					Options
												Outstanding					Vested and Exercisable
December 31, 2011		$15.13						$	6.91-$21.64					2,600,583					1,873,149
Granted		$17.34						$	17.32-$18.20					296,188					-
Vested		$13.81						$	6.91-$17.71					-					302,386
Exercised		$11.77						$	6.91-$19.16					(389,089	)				(389,089	)
Forfeited		$17.01						$	13.83-$20.80					(42,193	)				(42,193	)
Expired		$19.67						$	18.76-$21.64					(582,550	)				(582,550	)
December 31, 2012		$14.73						$	6.91-$20.23					1,882,939					1,161,703

For options outstanding as of December 31, 2012, 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					415,346				$	7.95					3.1 years					338,572				$	8.19					3.0 years
			$	13.83-$16.81					687,185				$	15.14					3.0 years					538,409				$	15.44					2.7 years
			$	17.01-$20.23					780,408				$	17.97					4.5 years					284,722				$	19.31					2.2 years
Total			$	6.91-$20.23					1,882,939				$	14.73					3.6 years					1,161,703				$	14.28					2.7 years

The weighted average exercise prices of vested and exercisable options as of December 31, 2011 and 2010 were $15.57 and $17.03, respectively.

As of December 31, 2012, based on a closing stock price of $19.96 per share, the aggregate intrinsic (in-the-money) values of vested options and all options outstanding were $6,656 and $9,906, respectively.

Restricted Common Stock Units

Restricted common stock units may be granted to executive officers, other employees and directors and represent 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:

		Total Outstanding Units										Vested Units
		Units					Weighted Average Grant Date Fair Value per Unit					Units					Weighted Average Grant Date Fair Value per Unit
December 31, 2011				1,135,840				$	14.07					189,228				$	15.35
Granted (1)				460,178				$	18.17					-					-
Vested				-					-					264,272				$	9.42
Forfeited				(30,314	)			$	12.29					-					-
Distributed (2)				(142,093	)			$	9.15					(142,093	)			$	9.15
December 31, 2012				1,423,611				$	15.93					311,407				$	13.15

(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.

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Disclosure for shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, if any, including other comprehensive income (as applicable). Including, but not limited to: (1) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion; (2) rights and privileges of each class of stock authorized; (3) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (4) shares held in trust for Employee Stock Ownership Plan (ESOP); (5) deferred compensation related to issuance of capital stock; and (6) description, terms, and number of warrants or rights outstanding. Disclosure for equity-based compensation, which may include disclosure of policies, compensation plan details, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

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