Stock-Based Compensation

12 Months Ended

Dec. 31, 2011

Stock-Based Compensation

Stock-Based Compensation

9.   Stock-Based Compensation 

Stock Option Plans

The Company made various stock option and award grants under the 1999 Stock Option/Stock Issuance Plan (the "1999 Plan") prior to May 2009.  In April 2009, the Company's stockholders approved the 2009 Long-Term Incentive Plan (the "Incentive Plan"), which had been previously approved by the Company's Board of Directors.  The Incentive Plan allows for the granting of various types of stock awards, not to exceed a total of 1.5 million shares, to eligible individuals.  The Compensation Committee of the Board of Directors will administer the Incentive Plan and determine the terms of all stock awards made under the Incentive Plan.

A summary of changes in stock options during 2011, 2010, and 2009 is as follows (in thousands, except exercise price information): 

	Shares			Range of Exercise Prices		Weighted-Average Exercise Price		Aggregate Intrinsic Value
Options outstanding at January 1, 2009		2,030		$	0.03 – 16.94	$	4.81
Options granted		--			--		--
Options exercised		(279	)		0.10 –   7.48		3.04	$	1,043
Options canceled		(47	)		0.03 – 13.25		5.35
Options outstanding at December 31, 2009		1,704		$	0.03 – 16.94	$	5.08
Options granted		--			--		--
Options exercised		(369	)		0.03 – 10.00		3.66	$	2,480
Options canceled		(136	)		1.01 – 16.94		13.53
Options outstanding at December 31, 2010		1,199		$	0.03 –  9.19	$	4.56
Options granted		--			--		--
Options exercised		(802	)		0.03 –  9.19		4.49	$	5,598
Options canceled		(39	)		1.41 –  7.48		5.58
Options outstanding at December 31, 2011		358		$	0.03 –  9.19	$	4.61	$	1,932
Options vested, December 31, 2009		1,532		$	0.03 – 16.94	$	4.95
Options vested, December 31, 2010		1,113		$	0.03 –  9.19	$	4.43
Options vested, December 31, 2011		358		$	0.03 –  9.19	$	4.61	$	1,932

The following is additional information related to stock options outstanding at December 31, 2011: 

		Options Outstanding						Options Exercisable
Range of Exercise Prices		Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Options		Weighted Average Exercise Price
$	0.03 – 2.28		106,018	$	1.68		1.54		106,018	$	1.68
$	3.10 – 4.72		60,394	$	3.38		2.47		60,394	$	3.38
$	6.31 – 9.19		191,276	$	6.62		3.03		191,276	$	6.62
$	0.03 – 9.19		357,688	$	4.61		2.50		357,688	$	4.61

At December 31, 2011, 2010, and 2009, the weighted-average remaining contractual life of outstanding options was 2.50, 1.54, and 3.40 years, respectively.  Generally stock options have a maximum contractual term of ten years.

Restricted stock activity for the year ended December 31, 2011 was as follows (in thousands, except fair value information): 

	Shares			Weighted-Average Grant Date Fair Value
Restricted stock awards outstanding at January 1, 2011		2,606		$	8.97
Awards granted (1)		720		$	10.31
Awards vested		(822	)	$	10.07
Awards canceled or forfeited		(461	)	$	8.76
Restricted stock awards outstanding at December 31, 2011		2,043		$	9.16

(1)   Includes the issuance of 97,800 shares of restricted stock to former JCB employees. The grants vest in 20% increments annually over a 5-year period. If the recipient is not employed by the Company for any reason during the 5-year period, then any unvested shares will be forfeited.

The weighted average grant date fair value of shares granted during 2010 and 2009 was $10.42 and $6.92, respectively. The total fair value of restricted shares vesting during the years ended December 31, 2011, 2010 and 2009 was $7.8 million, $9.3 million and $6.7 million, respectively.

The Company recognized $9.2 million, $10.8 million and $9.8 million of share-based compensation expense during 2011, 2010 and 2009, respectively, which included $1.1 million, $0.9 million and $0.9 million of expense for retirement savings plan contributions, respectively.  The associated current and future income tax benefit recognized during 2011, 2010 and 2009 was $3.1 million, $3.8 million and $3.4 million, respectively. As of December 31, 2011, there was $15.1 million of total unrecognized compensation cost related to non-vested share-based awards. This cost is expected to be recognized over a weighted-average period of three years. The Company's average estimated forfeiture rate for share based awards for the year ended December 31, 2011 was 7%, which was calculated using historical forfeiture experience.  Generally restricted stock awards vest over a three to five year requisite service period.

At December 31, 2011, 0.4 million shares were reserved for future issuance upon exercise of outstanding options. At December 31, 2011, there were 2.0 million shares of restricted stock outstanding under the 1999 Plan and the Incentive Plan.

Employee Stock Purchase Plan

The Employee Stock Purchase Plan (the "ESPP") was initiated January 1, 2006 and is a broadly-based stock purchase plan in which any eligible employee may elect to participate by authorizing the Company to make payroll deductions in a specific amount or designated percentage to pay the exercise price of an option. In no event will an employee be granted ability under the ESPP that would permit the purchase of common stock with a fair market value in excess of $25,000 in any calendar year and the Compensation Committee of the Company has set the current annual participation limit at $12,500. During the year ended December 31, 2011, approximately 11,400 shares were purchased under the ESPP.

There are four three-month offering periods in each calendar year beginning on January 1, April 1, July 1, and October 1, respectively. The purchase price of shares offered under the ESPP is an amount equal to 95% of the fair market value of the common stock on the date of purchase (occurring on, respectively, March 31, June 30, September 30, and December 31). The ESPP is designed to comply with Section 423 of the Code and thus is eligible for the favorable tax treatment afforded by Section 423.