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Compensation Plans
 12 Months Ended
Dec. 31, 2011
Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]  
Compensation Plans
13. Compensation Plans
 
In 1998, the Company adopted, and in May 1999 the shareholders approved, the 1998 Stock Incentive Plan (the “1998 Plan”) under which employees were granted options to purchase shares of the Company’s Common Stock and stock appreciation rights. The Company reserved 2,000,000 shares for issuance under the 1998 Plan. These options have an exercise price equal to the fair market value of the shares of the Company at the date of grant, become vested ratably over five years, and expire ten years from the date of grant. In April 2007, all reserved shares for which a stock option had not been granted under the 1998 Plan were deregistered. No further stock options or stock will be granted under the 1998 Plan.
 
On December 18, 2000, the Company adopted, and in May 2001 the shareholders approved, the 2001 Stock Option Plan for Non-Employee Directors (the “2001 Plan”) under which non-employee directors were granted options to purchase shares of the Company’s authorized but unissued stock. The Company reserved 200,000 shares for issuance under the 2001 Plan. Options granted under the 2001 Plan have an exercise price equal to the fair market value of the shares of the Company at the date of grant and expire ten years from the date of grant. Twenty-five percent of the options vest immediately upon grant and the remaining options vest ratably over three years. In April 2007, all reserved shares for which a stock option had not been granted under the 2001 Plan were deregistered. No further stock options or stock will be granted under the 2001 Plan.
 
In April 2007, the Company adopted and the shareholders approved the 2007 Stock Incentive Plan (the “2007 SIP”) under which employees, independent contractors, and non-employee directors may be granted stock options, restricted stock, deferred stock awards, restricted stock units, and stock appreciation rights, any of which may or may not require the achievement of performance objectives. Vesting requirements are determined by the Compensation Committee or the Board of Directors. The Company reserved 2,550,000 shares for issuance under the 2007 SIP. At December 31, 2011, an aggregate of 984,000 shares remain available for grant under the Plan.
 
Compensation expense related to stock options is recognized based on the grant-date fair value of the awards estimated using the Black-Scholes option pricing model. Compensation expense related to deferred stock, restricted stock, and restricted stock units is recognized based on the grant-date fair value of the Company’s common stock. The total stock-based compensation cost included in the Statements of Income was $3.0 million, $2.6 million and $4.2 million in 2011, 2010 and 2009, respectively. The 2009 expense was unusually high because performance based stock options and restricted stock units that had been granted over several years vested in 2009 as a result of the operating performance in that year.
 
Stock Options
 
There were no stock options granted in 2011.
 
For purposes of determining the fair value of stock option awards granted in 2010 and 2009, the Company used the Black-Scholes option pricing model and the assumptions set forth in the table below.
 
   
2010
    
2009
  
Dividend yield
 0.0 % 0.0 %
Expected volatility
 40.0 % 41.0 %
Risk free rate of return
 4.0 % 4.0 %
Expected lives
  
6.7 years
  
8.0 years
 
The estimated fair value of options granted is subject to the assumptions made and if the assumptions changed, the estimated fair value amounts could be significantly different.
 
The following table summarizes the stock option activity of the Plans:
 
   
 
 
 
Shares
    
Weighted Average Exercise Price
    
Weighted Average Grant Date
Fair Value
    
Weighted Average Remaining
Contractual
Life (Years)
  
Outstanding at December 31, 2008
 1,420,250 9.02 3.99 7.0
Granted
 115,900 8.69 4.57 9.3
Exercised
 (38,000 ) 8.73 2.56 4.1
Canceled
    -        -         -        -  
Outstanding at December 31, 2009
 1,498,150 9.00 4.13 7.1
Granted
 40,000 9.70 4.80 9.0
Exercised
 (366,000 ) 8.11 3.15 4.5
Canceled
     -       -        -        -  
Outstanding at December 31, 2010
 1,172,150 9.30 4.46 6.7
Granted
Exercised
 (843,450 ) 9.58 4.48 5.0
Canceled
                                  
Outstanding at December 31, 2011
     328,700       8.58       4.42       6.2  
Exercisable Options Outstanding at December 31, 2011
     223,700       8.37       4.28       6.0  
Non-Vested Options Outstanding at December 31, 2011
     105,000     $ 9.05     $ 4.71       6.7  
 
At December 31, 2011, the aggregate intrinsic value of all options, including exercisable options, was $8.2 million.
 
At December 31, 2011, there was $0.4 million of unrecognized compensation cost related to stock options that is expected to be recognized over a weighted-average period of 2.0 years.
 
Deferred Stock
 
Deferred stock awards vest based on the passage of time or the Company’s attainment of performance objectives. Upon vesting, these awards convert one-for-one to common stock.
 
In 2011, 9,487 deferred stock awards were issued to non-employee directors that will vest in April 2012 and 12,744 deferred stock awards were issued to non-employee directors that will vest in April 2014.
 
In 2010, 12,902 deferred stock awards were issued to non-employee directors that will vest in April 2011 and 17,331 deferred stock awards were issued to non-employee directors that will vest in April 2013.
 
In 2009, 13,360 deferred stock awards were issued to non-employee directors that vested in April 2010.
 
Compensation expense related to these awards is amortized ratably over the vesting period. Compensation expense related to these awards was $0.5 million, $0.3 million and $0.2 million in 2011, 2010 and 2009, respectively.
 
Restricted Stock Units
 
Beginning in the second quarter of 2009, the Company began granting restricted stock units in lieu of incentive stock options to senior employees. The vesting of these RSU’s is dependent on the achievement of various corporate objectives established by the Compensation Committee of the Board of Directors, as well as, in certain instances, the passage of time.
 
During 2011, 524,000 restricted stock units were issued. Compensation costs related to these restricted stock units was $10.7 million, of which $1.8 was recognized in 2011. The remaining costs will be recognized ratably over the remaining period required before the units to vest, which ranges from three to five years.
 
During 2010, 76,000 restricted stock units were issued. Compensation costs related to these restricted stock units was $1.1 million, all of which was recognized in 2010 because the performance objectives were attained and the awards became fully vested.
 
During 2009, 60,100 restricted stock units were issued. Compensation costs related to these restricted stock units was $0.7 million, all of which was recognized in 2009 because the performance objectives were attained and the awards became fully vested.