Stock-Based Compensation

12 Months Ended

Dec. 31, 2012

Stock-Based Compensation [Abstract]

STOCK-BASED COMPENSATION

(11) STOCK-BASED COMPENSATION

The Company currently has three stock-based compensation plans under which awards have been granted: (1) the Stock Incentive Plan (“SIP”), (2) the 2006 Management Incentive Plan (“2006 MIP”), and (3) the 2008 Equity Incentive Plan (“2008 EIP”) (collectively, the “Plans”). The Company generally issues authorized but previously unissued shares to satisfy stock option exercises, grants of restricted stock awards and vesting of restricted stock units and settlements of 2006 MIP Performance Units.

SIP Awards

The SIP, as amended, authorized the grant of options or other stock-based awards, with respect to up to 1,237,500 shares of the Company’s common stock to key employees, directors, consultants and advisors. The majority of options granted pursuant to the SIP had five to seven year terms and vested and became fully exercisable on a ratable basis over one to five years of continued employment or service. The SIP expired in June 2008.

2008 EIP Awards

During the first quarter of 2008, the Board of Directors of the Company adopted the 2008 EIP, which was approved by the shareholders at the annual meeting of the shareholders on May 29, 2008. The 2008 EIP authorizes the grant of incentive and non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units and other incentive awards. Two million shares of the Company’s common stock initially were reserved for issuance under the 2008 EIP pursuant to award grants to key employees, directors and service providers. The options granted pursuant to the 2008 EIP have seven year terms.

An amendment to the 2008 EIP was adopted by the Company’s Board of Directors in April 2010 and approved at the Company’s annual meeting of shareholders held on June 15, 2010. This amendment, among other things, increased the number of shares reserved for issuance under the 2008 EIP by 3,400,000 shares to a total of 5,400,000 shares and provides that restricted stock awards and other full value awards will count as 1.41 shares against the available pool of shares under the plan. Another amendment to the 2008 EIP was adopted by the Company’s Board of Directors in April 2012 and approved at the Company’s annual meeting of shareholders held on June 19, 2012. This amendment increased the number of shares reserved for issuance under the 2008 EIP by 2,200,000 shares to a total of 7,600,000 shares. As of December 31, 2012, there were 2,125,164 shares available for future grants under the 2008 EIP.

Stock options granted under the 2008 EIP generally have a term of seven years and vest in equal annual increments over the vesting period, which typically is three years for employees and one year for directors. The following table summarizes stock option grants during the years ended December 31, 2012, 2011 and 2010:

	Grantee Type	# of Options Granted		Vesting Period	Weighted Average Exercise Price		Weighted Average Grant Date Fair Value
2012
	Director group		56,261	1 year or less	$	7.55	$	3.89
	Director		8,546	3 years		7.72		4.25
	Employee group		597,250	3 years		7.54		4.12
	Employee inducement		45,000	3 years (1)		8.54		4.58
2011
	Director group		65,801	1 year or less	$	7.23	$	4.06
	Director group		16,237	3 years		6.32		3.98
	Employee group		140,000	2 years		6.09		3.72
	Employee group		475,064	3 years		7.38		4.33
	Employee inducement		200,000	3-4 years (2)		5.37		3.13
2010
	Director group		51,276	1 year or less	$	4.20	$	2.53
	Director		8,546	3 years		5.39		4.00
	Employee group		649,010	3 years		4.14		2.68

(1) The Company granted non-qualified stock options outside its existing stock-based compensation plans in the third quarter of 2012 to one employee in connection with the employee joining the company.

(2) The Company granted non-qualified stock options outside its existing stock-based compensation plans in the fourth quarter of 2011 to three employees in connection with their joining the company, which included 100,000 performance-based options. These options were forfeited in 2012.

Nonvested stock awards, including both restricted stock and restricted stock units, generally are nontransferable until vesting and the holders are entitled to receive dividends with respect to the nonvested shares. Prior to vesting, the grantees of restricted stock are entitled to vote the shares, but the grantees of restricted stock units are not entitled to vote the shares. Generally, nonvested stock awards vest in equal annual increments over the vesting period, which typically is three years for employees and one year for directors. The following table summarizes nonvested stock awards (restricted stock and restricted stock units) grants during the years ended December 31, 2012, 2011 and 2010:

	Grantee Type	# of Shares Granted		Vesting Period	Weighted Average Grant Date Fair Value
2012
	Director group		56,261	1 year or less	$	7.55
	Director		8,546	3 years		7.72
	Employee group		426,286	3 years		7.55
	Employee inducement		45,000	3 years (1)		8.54
2011
	Director group		65,801	1 year or less	$	7.23
	Director group		17,237	3 years		6.34
	Employee group		60,000	2 years		6.09
	Employee group		455,064	3 years		7.41
	Employee inducement		120,000	3-4 years (2)		5.66
2010
	Director group		51,276	1 year or less	$	4.20
	Director		8,546	3 years		5.39
	Employee group		600,010	3 years		4.02

(1) The Company granted nonvested stock awards (restricted stock) outside its existing stock-based compensation plans in the third quarter of 2012 to one employee in connection with the employee joining the company.

The Company granted performance-based nonvested stock awards (restricted stock) outside its existing stock-based compensation plans in the fourth quarter of 2011 to two employees in connection with their joining the company. These restricted stock awards were forfeited in 2012.

A summary of option activity as of December 31, 2012, and changes during the year then ended is presented below:

Options	Shares			Weighted- Average Exercise Price (Per Share)		Weighted- Average Remaining Contractual Term	Aggregate Intrinsic Value ($ 000’s)
Outstanding at January 1, 2012		2,860,890		$	6.61
Granted		707,057			7.60
Exercised		(141,849	)		3.93		$	467
Forfeited		(411,938	)		6.66
Expired		(30,000	)		31.60
Outstanding at December 31, 2012		2,984,160		$	6.70	3.33 years	$	3,147
Exercisable at December 31, 2012		1,691,200		$	6.78	1.53 years	$	2,347

The weighted-average grant date fair value of options granted was $4.13 per share in 2012, $3.94 per share in 2011 and $2.69 per share in 2010. The total intrinsic value of options exercised was $0.5 million in 2012, $0.4 million in 2011 and less than $0.1 million in 2010.

A summary of nonvested stock awards (restricted stock and restricted stock units) activity as of December 31, 2012, and changes during the year then ended is presented below:

Nonvested Stock	Shares			Weighted Average Grant Date Fair Value (Per Share)
Nonvested at January 1, 2012		1,418,494		$	5.37
Granted		536,093			7.64
Vested		(685,740	)		5.16
Forfeited		(200,839	)		5.93
Nonvested at December 31, 2012		1,068,008		$	6.54

The weighted-average grant date fair value of nonvested stock awards (restricted stock and restricted stock units) granted was $7.64 per share in 2012, $6.96 per share in 2011 and $4.05 per share in 2010. The total vest date fair value of stock awards vested during the year was $4.9 million in 2012, $3.6 million in 2011, and $1.5 million in 2010.

2006 MIP Performance Units

At the annual meeting of shareholders held on August 11, 2006, the shareholders of the Company approved a proposal granting authorization to issue up to 2.1 million shares of the Company’s common stock under the 2006 MIP. At Performance Unit settlement dates, participants were issued that number of shares of Company common stock equal to 60% of the number of Performance Units being settled, and were paid in cash an amount equal to 40% of the fair market value of that number of shares of common stock equal to the number of Performance Units being settled. Prior to 2012, Performance Units were only granted in 2006 and 2007, and the last of such units were settled in May 2011. No Performance Units were outstanding as of December 31, 2011.

On June 19, 2012, seven senior officers of the Company were granted 154,264 Performance Units under the 2006 MIP, comprising all remaining available awards under the plan. The awards had an aggregate grant date fair value of $1.2 million and vest ratably over three years. On vesting, the Performance Units will be settled by the issuance of Company common stock equal to 60% of the number of Performance Units being settled and the payment of cash in an amount equal to 40% of the fair market value of that number of shares of common stock equal to the number of Performance Units being settled.

All Performance Units must be settled before April 30, 2016. We recognized compensation expense of $0.2 million in 2012 and less than $0.1 million in both 2011 and 2010 related to these 2006 MIP Performance Unit awards. We determined the amount of compensation expense recognized on the assumption that none of the Performance Unit awards would be forfeited.

There was no settlement of Performance Units during 2012. During 2011, one current executive officer settled 44,831 Performance Units, resulting in the issuance of 26,898 shares of common stock and a cash payment of $0.1 million. During 2010, three current and former executive officers settled an aggregate of 224,158 Performance Units resulting in the issuance of 134,490 shares of common stock and cash payments totaling $0.6 million.

Stock-based compensation charges aggregated $6.3 million in 2012, $5.1 million in 2011 and $4.0 million in 2010. We include these charges in “Selling, general and administrative expenses” in the accompanying Consolidated Statements of Income. As of December 31, 2012, there was $8.7 million of unrecognized stock-based compensation expense related to stock options and nonvested stock which we expect to be recognized over a weighted average period of 1.60 years.