Share-Based Compensation

6 Months Ended

Jun. 30, 2011

Share-Based Compensation

Share-Based Compensation

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 and restricted stock units. The total compensation expense related to all share-based compensation plans was $9.9 million and $16.4 million for the three and six months ended June 30, 2011, respectively. The total compensation expense related to all share-based compensation plans was $7.8 million and $16.0 million for the three and six months ended June 30, 2010, respectively.

Stock Options

The Company granted 200,000 and 540,000 stock options during the six months ended June 30, 2011 and 2010, respectively. The fair market value of each stock option award is estimated on the date of grant using the Black-Scholes-Merton option pricing model. The fair market value of these stock options was determined using the following assumptions:

	2011			2010
Expected volatility		36.69	%		35.61	%
Risk-free interest rate		2.54	%		2.75	%
Expected life (years)		6.25			6.25
Expected dividend yield		4.57	%		4.19	%

The grant date fair market value of these options was $4.39 and $4.81 per stock option for the six months ended June 30, 2011 and 2010, respectively.

Stock options as of June 30, 2011 and December 31, 2010 and changes during the six months ended June 30, 2011 were as follows:

	Shares Under Option (thousands)			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (millions)
Outstanding at December 31, 2010		4,155		$	20.80		6.3	$	14.4
Granted		200			18.62		9.7
Exercised		(108	)		9.25
Cancelled/forfeited/expired		(202	)		24.96
Outstanding at June 30, 2011		4,045			20.73		6.3	$	16.9
Exercisable at June 30, 2011		1,056		$	11.48		5.3	$	8.6

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 June 30, 2011 and December 31, 2010, 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 options on June 30, 2011 and December 31, 2010. 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 and six months ended June 30, 2011 was less than $0.1 million and $1.0 million, respectively. Total intrinsic value of options exercised for the three and six months ended June 30, 2010 was $0.1 million and $2.1 million, respectively.

Compensation expense related to stock options for the three and six months ended June 30, 2011 was $0.6 million and $1.4 million, respectively. Compensation expense related to stock options for the three and six months ended June 30, 2010 was $0.8 million and $1.5 million, respectively. As of June 30, 2011, $4.2 million of total unrecognized share-based compensation expense related to stock options is expected to be recognized over a weighted average period of 2.3 years.

Restricted Stock Units

Nonvested restricted stock unit awards as of June 30, 2011 and December 31, 2010 and changes during the six months ended June 30, 2011 were as follows:

	Shares (thousands)			Weighted Average Grant Date Fair Value
Nonvested at December 31, 2010		5,430		$	12.96
Granted		1,524			16.37
Vested		(1,858	)		12.93
Forfeited		(49	)		15.42
Nonvested at June 30, 2011		5,047		$	13.97

Compensation expense related to restricted stock units for the three and six months ended June 30, 2011 was $9.0 million and $14.4 million, respectively. Compensation expense related to restricted stock units for the three and six months ended June 30, 2010 was $7.0 million and $14.5 million, respectively. As of June 30, 2011, there was $37.6 million of unrecognized share-based compensation expense related to approximately 4.8 million restricted stock unit awards, with a weighted-average grant date fair market value of $13.87, which are expected to vest over a weighted-average period of 2.3 years.

Performance Share Units

During the six months ended June 30, 2011, a total of 235,000 performance share unit awards were granted to certain executive officers, payable upon the achievement of certain established performance targets for the three years ending December 31, 2013. Distributions under these awards are payable at the end of the performance period, which is January 1, 2011 through December 31, 2013, in common stock or cash, at the Company's discretion. The total potential payouts range from 117,500 shares to 235,000 shares should certain performance targets be achieved. 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 or permanent disability of the grantee or a change in control of the Company.

Compensation expense is currently being recognized based on an estimated payout of 235,000 shares. Compensation expense related to performance share unit awards for the three and six months ended June 30, 2011 was $0.3 million and $0.6 million, respectively. As of June 30, 2011, there was $3.0 million of unrecognized share-based compensation expense related to performance share unit awards, which is expected to be recognized over a period of 2.5 years.