8. Share-Based Compensation

The Company recognizes compensation expense based on estimated grant date fair values for all share-based awards issued to employees and directors, including stock options, restricted stock units and performance share units. The total compensation expense related to all share-based compensation plans was $4.0 million and $7.4 million for the three months ended March 31, 2013 and 2012, respectively.

Stock Options

There were no options granted during the three months ended March 31, 2013. The Company granted 1,221,000 stock options, with a grant date fair market value of $2.96, during the three months ended March 31, 2012. The fair market value of each stock option award was estimated based on the assumptions below as of the grant date using the Black-Scholes-Merton option pricing model. The assumptions used to determine the fair market value of the stock options granted during the three months ended March 31, 2012 were as follows:

			2012
Expected volatility			39.71%
Risk-free interest rate			1.18%
Expected life (years)			6.25
Expected dividend yield			5.06%

Stock option awards as of December 31, 2012 and March 31, 2013, and changes during the three months ended March 31, 2013, were as follows:

				Weighted
				Average
		Weighted		Remaining	Aggregate
		Average		Contractual	Intrinsic
	Shares Under Option	Exercise		Term	Value
	(thousands)	Price		(years)	(millions)
Outstanding at December 31, 2012	4,726	$	18.90	6.2	$	2.1
Cancelled/forfeited/expired	(345)		18.42
Outstanding at March 31, 2013	4,381		18.93	6.4		5.4
Vested and expected to vest at March 31, 2013	4,332		19.00	6.4		5.4
Exercisable at March 31, 2013	1,093	$	7.09	5.9	$	5.4

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on March 31, 2013 and December 31, 2012, respectively, and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their in-the-money options on March 31, 2013 and December 31, 2012. This amount will change in future periods based on the fair market value of the Company’s stock and the number of options outstanding. Total intrinsic value of options exercised for the three months ended March 31, 2012 was $1.2 million. There were no options exercised during the three months ended March 31, 2013.

Compensation expense related to stock options for the three months ended March 31, 2013 and 2012 was $0.4 million and $1.1 million, respectively. As of March 31, 2013, $2.8 million of total unrecognized compensation expense related to 1.1 million stock options with a weighted average fair market value of $3.31, is expected to be recognized over a weighted average period of 2.4 years.

Restricted Stock Units

Nonvested restricted stock unit awards as of December 31, 2012 and March 31, 2013, and changes during the three months ended March 31, 2013, were as follows:

	Shares	Weighted Average Grant
	(thousands)	Date Fair Value
Nonvested at December 31, 2012	3,246	$	11.85
Granted	1,175		9.08
Vested	(1,706)		9.69
Forfeited	(34)		11.88
Nonvested at March 31, 2013	2,681	$	12.00

Compensation expense related to restricted stock units for the three months ended March 31, 2013 and 2012 was $3.2 million and $5.8 million, respectively. As of March 31, 2013, there was $23.1 million of unrecognized share-based compensation expense related to approximately 2.5 million of restricted stock unit awards, with a weighted average grant date fair market value of $11.97, that are expected to vest over a weighted average period of 2.5 years. The fair value of these awards was determined based on the Company’s stock price on the grant date reduced by the present value of expected dividends through the vesting period.

Performance Share Units

Nonvested performance share unit awards as of December 31, 2012 and March 31, 2013, and changes during the three months ended March 31, 2013, were as follows:

Shares
(thousands)

Weighted Average
Grant Date
Fair Value

Nonvested at December 31, 2012

468

12.84

Granted

485

8.85

Nonvested at March 31, 2013

953

10.81

During the three months ended March 31, 2013, 485,000 performance share unit awards were granted to certain executive officers, payable upon the achievement of certain established performance targets. The performance period for the shares awarded is January 1, 2013 through December 31, 2015. Distributions under these awards are payable at the end of the performance period in common stock or cash, at the Company’s discretion. The total potential payouts for awards granted during the three months ended March 31, 2013 range from 242,500 to 485,000 shares, should certain performance targets be achieved. The fair value of these awards was determined based on the Company’s stock price on the grant date reduced by the present value of expected dividends through the vesting period. These awards are subject to forfeiture upon termination of employment prior to vesting, subject in some cases to early vesting upon specified events, including death, permanent disability or retirement of the grantee or a change in control of the Company.

Compensation expense for the performance share unit awards granted in 2013 and 2012 is currently being recognized based on the maximum estimated payout of 485,000 and 233,000 shares, for each respective period. Compensation expense for awards granted during 2011 is currently being recognized based on an estimated payout of 50%, or 117,500 shares. Compensation expense related to performance share unit awards for the three months ended March 31, 2013 and 2012 was $0.4 million and $0.5 million, respectively. As of March 31, 2013, there was $5.6 million of unrecognized compensation expense related to performance share unit awards, which is expected to be recognized over a weighted average period of 2.4 years.