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Stock-Based Compensation
9 Months Ended
Sep. 30, 2011
Stock-Based Compensation [Abstract] 
Stock-Based Compensation
(7) Stock-Based Compensation

Our Equity Plan provides for grants of nonqualified stock options, restricted stock and stock appreciation rights. The Board of Directors or the Compensation Committee of our Board of Directors determines the terms of each award, including the type, recipients, number of shares subject to and vesting conditions of each award. Stock option and restricted stock awards are described below. No awards of stock appreciation rights have been issued under the Equity Plan to date. The maximum number of shares of common stock that may be awarded under the Equity Plan is 20,000,000 shares. The maximum aggregate number of shares that may be awarded to any one person under the Equity Plan is 2,562,500. As of September 30, 2011, there were 8,099,132 shares available for granting additional awards.

We apply the fair value method of accounting for stock-based compensation awards granted under our Equity Plan. Stock-based employee compensation expense is included in salaries, wages and benefits within the Consolidated Statements of Income. As of September 30, 2011, the total unrecognized compensation cost related to nonvested stock-based compensation awards was approximately $7.1 million and is expected to be recognized over a weighted average period of 1.8 years. The following table summarizes the stock-based compensation expense and related income tax benefit recognized in the Consolidated Statements of Income (in thousands):

 

      Three Months Ended
September 30,		      Nine Months Ended
September 30,		  
     2011      2010      2011      2010  

Stock options:

            

Pre-tax compensation expense

    $ 144       $ 200       $ 404       $ 198   

Tax benefit

      60         83         167         82   
  

 

 

     

 

 

     

 

 

     

 

 

  

Stock option expense, net of tax

    $ 84       $ 117       $ 237       $ 116   
  

 

 

     

 

 

     

 

 

     

 

 

  

Restricted stock:

            

Pre-tax compensation expense

    $ 586       $ 258       $ 1,473       $ 766   

Tax benefit

      241         104         607         316   
  

 

 

     

 

 

     

 

 

     

 

 

  

Restricted stock expense, net of tax

    $ 345       $ 154       $ 866       $ 450   
  

 

 

     

 

 

     

 

 

     

 

 

  

We do not have a formal policy for issuing shares upon an exercise of stock options or vesting of restricted stock, so such shares are generally issued from treasury stock. From time to time, we repurchase shares of our common stock, the timing and amount of which depends on market and other factors. Historically, the shares acquired from such repurchases have provided us with sufficient quantities of stock to issue for stock-based compensation. Based on current treasury stock levels, we do not expect to repurchase additional shares specifically for stock-based compensation during 2011.

Stock Options

Stock options are granted at prices equal to the market value of the common stock on the date the option award is granted. Option awards currently outstanding become exercisable in installments from 24 to 72 months after the date of grant. The options are exercisable over a period not to exceed ten years and one day from the date of grant.

 

The following table summarizes stock option activity for the nine months ended September 30, 2011:

 

     Number of
Options
(in thousands)		     Weighted
Average
Exercise
Price ($)		      Weighted
Average
Remaining
Contractual
Term
(Years)		      Aggregate
Intrinsic
Value
(in  thousands)		  

Outstanding at beginning of period

      1,315      $ 17.37         

Options granted

      0      $ 0.00         

Options exercised

      (184 )    $ 14.22         

Options forfeited

      (6 )    $ 17.00         

Options expired

      0      $ 0.00         
  

 

 

          

Outstanding at end of period

      1,125      $ 17.88         4.43       $ 3,313   
  

 

 

          

Exercisable at end of period

      757      $ 17.91         3.33       $ 2,209   
  

 

 

          

We did not grant any stock options during the three-month and nine-month periods ended September 30, 2011 and September 30, 2010. The fair value of stock option grants is estimated using a Black-Scholes valuation model. The total intrinsic value of stock options exercised was $0.3 million and $3.8 million for the three-month periods ended September 30, 2011 and September 30, 2010, respectively, and $2.0 million and $9.0 million for the nine-month periods ended September 30, 2011 and September 30, 2010, respectively.

Restricted Stock

Restricted stock awards entitle the holder to shares of common stock when the award vests. The value of these shares may fluctuate according to market conditions and other factors. Restricted stock awards currently outstanding vest over periods ranging from 12 to 84 months from the grant date of the award. The restricted shares do not confer any voting or dividend rights to recipients until such shares fully vest and do not have any post-vesting sales restrictions.

The following table summarizes restricted stock activity for the nine months ended September 30, 2011:

 

     Number of
Restricted
Shares (in
thousands)		     Weighted
Average Grant
Date Fair
Value ($)		  

Nonvested at beginning of period

      453      $ 19.49   

Shares granted

      40      $ 23.30   

Shares vested

      0      $ 0.00   

Shares forfeited

      (2 )    $ 20.64   
  

 

 

    

Nonvested at end of period

      491      $ 19.79   
  

 

 

    

 

We granted 40,000 shares of restricted stock during the three-month and nine-month periods ended September 30, 2011 and did not grant any shares of restricted stock during the three-month and nine-month periods ended September 30, 2010. We estimate the fair value of restricted stock awards based upon the market price of the underlying common stock on the date of grant, reduced by the present value of estimated future dividends because the awards are not entitled to receive dividends prior to vesting. Our estimate of future dividends is based on the most recent quarterly dividend rate at the time of grant, adjusted for any known future changes in the dividend rate. The present value of estimated future dividends for the 2011 grant was calculated using the following assumptions:

 

Dividends per share (quarterly amounts)

    $ 0.05   

Risk-free interest rate

      0.4 %