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Shareholders' Equity
 12 Months Ended
Dec. 31, 2011
Shareholders' Equity  
Shareholders' Equity

7. Shareholders' Equity

Dividends

We declared cash dividends of $0.15 per common share for 2011, 2010 and 2009. Our Credit Facility and Term Loan Facility restrict the payment of cash dividends to a maximum of the sum of (i) $50 million plus (ii) 50% of the consolidated net income calculated quarterly for the previous four fiscal quarters plus (iii) 100% of the net proceeds of all equity issuances made after the closing date of the Credit Facility and Term Loan Facility. The payment of the above-referenced dividends was in compliance with the Credit Facility and Term Loan Facility.

Issuance of Common Stock

In September 2010, we completed a public offering of 9.2 million shares of our common stock at a price of $25.00 per common share. We received net proceeds of $218.8 million from the offering, after deducting $10.4 million in commissions paid to the underwriters and an estimated $0.8 million in other expenses incurred in connection with the offering.

Stock Repurchase Programs

Our Board of Directors, from time to time, has authorized stock repurchase programs under the terms of which we may repurchase our common stock, subject to certain restrictions contained in our Credit Facility and Term Loan Facility. We did not repurchase any shares of common stock under any stock repurchase program in 2011, 2010 or 2009. As of December 31, 2011, we have $50.0 million available to repurchase shares under our stock repurchase program.

Non-Employee Director Stock Deferral Plan

We adopted the 2003 Stock Deferral Plan for Non-Employee Directors (the "Stock Deferral Plan") to provide for deferral of stock grants. Under the Stock Deferral Plan, each non-employee director could elect to have any annual stock grants paid in stock units, in lieu of stock, with each stock unit being equivalent to one share of our common stock and deferred as provided in the Stock Deferral Plan. As of each cash dividend payment date with respect to our common stock, each participant in the Stock Deferral Plan has credited to his or her account, as maintained by us, a number of stock units equal to the quotient obtained by dividing: (a) the product of (i) the cash dividend payable with respect to each share of common stock on such date and (ii) the total number of stock units credited to his or her account as of the close of business on the record date applicable to such dividend payment date by (b) the fair market value of one share of common stock on such dividend payment date. Upon the participant's termination of service as our director for any reason, or upon a change of control, the participant will receive a number of shares of common stock equal to the number of stock units credited to his or her account.

The estimated fair value of stock and stock units issued to non-employee directors under the Stock Deferral Plan is based on the market value of our common stock on the date of grant and recorded as non-employee director compensation expense. Outstanding stock units issued to non-employee directors under the Stock Deferral Plan are included as capital in excess of par value in shareholders' equity. There were 25,000 stock units outstanding as of December 31, 2011 and 2010. The aggregate carrying value of the outstanding stock units was $0.3 million and $0.2 million at December 31, 2011 and 2010, respectively, which is included in capital in excess of par value in the accompanying consolidated balance sheets.

Share-Based Payment Plans

Plan Summary and Description
In 2006, our shareholders approved the 2006 Omnibus Plan (the "2006 Plan"). The 2006 Plan is administered by the Compensation Committee of the Board of Directors (the "Compensation Committee"). The purpose of the 2006 Plan is to (i) attract and retain persons eligible to participate in the 2006 Plan; (ii) motivate participants, by means of appropriate incentives, to achieve long-range goals; (iii) provide incentive compensation opportunities that are competitive with those of other similar companies; and (iv) further align participants' interests with those of World Fuel's other shareholders through compensation that is based on the value of our common stock. The goal is to promote the long-term financial interest of World Fuel and its subsidiaries, including the growth in value of our equity and enhancement of long-term shareholder return. The persons eligible to receive awards under the 2006 Plan are our employees, officers, and members of the Board of Directors, or any consultant or other person who performs services for us.

The provisions of the 2006 Plan authorize the grant of stock options which can be "qualified" or "nonqualified" under the Internal Revenue Code of 1986, as amended, SSAR Awards, restricted stock, RSUs, other share- based awards, performance shares and performance units. The 2006 Plan is unlimited in duration and, in the event of its termination, the 2006 Plan will remain in effect as long as any of the above awards are outstanding. No awards may be granted under the 2006 Plan after June 2016. The term and vesting period of awards granted under the 2006 Plan are established on a per grant basis, but options and SSAR Awards may not remain exercisable after the seven-year anniversary of the date of grant.

Under the 2006 Plan, 4,900,000 shares of common stock are authorized for issuance. Additional shares of common stock that are authorized for issuance under the 2006 Plan include any shares that were available for future grant under any of our prior stock plans, and any stock or stock options granted under the 2006 Plan or any prior plans that expire or are forfeited or canceled. Furthermore, any shares purchased by us from employees to satisfy the SSAR Award exercise prices and/or withholding taxes due upon vesting of restricted stock or RSUs or exercise of SSAR Awards are added to the maximum number of shares authorized for issuance under the 2006 Plan.

The following table summarizes the outstanding awards issued pursuant to the 2006 Plan described above as of December 31, 2011 and the remaining shares of common stock available for future issuance (in thousands):

Plan name
   SSAR
Awards
   Restricted
Stock
   RSUs
   Remaining
shares of
common stock
available for
future issuance
 

2006 Plan (1)

   517   446   901   4,718
(1)
As of December 31, 2011, the outstanding SSAR Awards will expire between September 2012 and March 2013, unvested restricted stock will vest between February 2012 and November 2016 and unvested RSUs will vest between March 2012 and March 2016. RSUs and restricted stock granted to non-employee directors under the 2006 Plan prior to 2011 vest equally on a monthly basis over a one-year period, and, once vested, remain outstanding until the date the non-employee director ceases, for any reason, to be a member of the Board of Directors. For the RSUs granted to non-employee directors in 2011, 50% vest one year from the grant date, at which time, 50% of the shares will be issued. The issuance of the remaining 50% of the shares will be deferred for three years or until the date the non-employee director ceases, for any reason, to be a member of the Board of Directors, whichever occurs first.

SSAR Awards

The following table summarizes the status of our outstanding and exercisable SSAR Awards and related transactions for each of the following years (in thousands, except weighted average exercise price and weighted average remaining contractual life data):

 
   SSAR Awards Outstanding
   SSAR Awards Exercisable
 
    SSAR
Awards		   Weighted
Average
Exercise
Price		   Aggregate
Intrinsic
Value		   Weighted
Average
Remaining
Contractual
Life
(in Years)		   SSAR
Awards		   Weighted
Average
Exercise
Price		   Aggregate
Intrinsic
Value		   Weighted
Average
Remaining
Contractual
Life
(in Years)
 
As of December 31, 2008   3,789   $15.06   $16,654   2.4   1,168   $11.02   $9,772   1.3
Granted   48   21.78                        
Exercised   (1,759)   13.27                        
Forfeited   (17)   21.22                        
                                 
As of December 31, 2009   2,061   16.70   20,914   2.1   1,419   17.62   13,109   1.6
Granted   36   24.89                        
Exercised   (1,085)   17.52                        
                                 
As of December 31, 2010   1,012   16.10   20,346   1.9   480   18.29   8,619   1.3
Exercised   (486)   16.56                        
Forfeited   (9)   12.39                        
                                 
As of December 31, 2011   517   $15.06   $13,921   1.4   410   $15.39   $10,895   1.4
 

As discussed in Note 1, we currently use the Black-Scholes option pricing model to estimate the fair value of SSAR Awards granted to employees and non-employee directors. The aggregate intrinsic value of SSAR Awards exercised during 2011, 2010 and 2009 was $10.2 million, $13.2 million and $16.1 million, respectively, based on the difference between the average of the high and low market price of our common stock at the exercise date and the SSAR Award exercise price.

The weighted average fair value of the SSAR Awards and the assumptions used to determine such fair value for each of the following years are as follows:

 
   2010
   2009
 

Weighted average fair value of SSAR Awards

   $10.97   $9.33

Expected term (in years)

   4.0   4.0

Volatility

   58.0%   58.9%

Dividend yields

   0.5%   0.7%

Risk-free interest rates

   1.7%   1.9%

There were no SSAR Awards issued in 2011.

Restricted Stock Awards

The following table summarizes the status of our unvested restricted stock outstanding and related transactions for each of the following years (in thousands, except weighted average grant-date fair value price and weighted average remaining vesting term data):

Unvested Restricted Stock Outstanding
 
   Unvested
Restricted Stock
   Weighted
Average
Grant-date
Fair Value
Price
   Aggregate
Intrinsic
Value
   Weighted
Average
Remaining
Vesting
Term
(in Years)
 

As of December 31, 2008

   611   $18.73   $11,427   2.2

Vested

   (135)   12.43        

Forfeited

   (57)   19.12        
                 

As of December 31, 2009

   419   20.88   11,245   1.7

Vested

   (26)   21.30        

Forfeited

   (7)   20.95        
                 

As of December 31, 2010

   386   20.84   13,991   0.6

Granted

   353   37.40        

Vested

   (284)   20.49        

Forfeited

   (9)   26.45        
                 

As of December 31, 2011

   446   $34.07   $18,707   2.2
 

The aggregate value of restricted stock which vested during 2011, 2010 and 2009 was $10.6 million, $1.0 million and $3.6 million, respectively, based on the average high and low market price of our common stock at the vesting date.

RSU Awards

The following table summarizes the status of our RSUs and related transactions for each of the following years (in thousands, except for weighted average grant-date fair value data and weighted average remaining contractual life):

RSUs Outstanding
 
   RSUs
   Weighted
Average
Grant-date
Fair
Value
   Aggregate
Intrinsic
Value
   Weighted
Average
Remaining
Contractual
Life
(in Years)
 

As of December 31, 2008

   285   $13.59   $5,276   3.6

Granted

   639   14.88        

Issued

   (10)   12.29        

Forfeited

   (13)   13.70        
                 

As of December 31, 2009

   901   14.52   24,131   2.5

Granted

   343   28.32        

Issued

   (11)   14.03        

Forfeited

   (15)   19.91        
                 

As of December 31, 2010

   1,218   18.34   44,038   2.6

Granted

   224   38.01        

Issued

   (515)   14.03        

Forfeited

   (26)   16.19        
                 

As of December 31, 2011

   901   $25.59   $37,373   1.7
 

Included in the table above are 107 thousand RSUs held by our non-employee directors. For RSUs granted to our non-employee directors prior to 2011, shares of our common stock will be issued to the non-employee director when he or she ceases, for any reason, to be a member of the Board of Directors. For RSUs granted to our non-employee directors in 2011, 50% of the shares of our common stock will be issued to the non-employee director once the one-year vesting period is completed, and 50% of the shares will be issued three years after the one-year vesting period is completed or when the non-employee director ceases, for any reason, to be a member of the Board of Directors, whichever occurs first.

Common Stock Awards

As partial settlement of a special bonus award recorded in 2008, we issued $4.5 million, or 162,338 shares, of our common stock in March 2009.

Unrecognized Compensation Cost

As of December 31, 2011, there was $23.1 million of total unrecognized compensation cost related to unvested share-based payment awards, which is included as capital in excess of par value in the accompanying consolidated balance sheet. The unrecognized compensation cost at December 31, 2011 is expected to be recognized as compensation expense over a weighted average period of 1.6 years as follows (in thousands):

Year Ended December 31,
    

2012

   $8,843

2013

   7,036

2014

   4,281

2015

   2,047

2016

   942
 

 

   $23,149