Equity Compensation Plans

6 Months Ended

Jun. 30, 2011

Equity Compensation Plans

7. Equity Compensation Plans

As of June 30, 2011, the Company had two stock option plans – the 1992 Stock Incentive Compensation Plan (“1992 Plan”) and the 2003 Stock Incentive Compensation Plan (“2003 Plan”), collectively, the “Plans,” under which incentive and non-qualified stock options and time and performance based restricted shares have been granted to employees and outside directors from authorized but unissued shares of common stock or treasury shares.  The 1992 Plan expired in May 2002, but continues to govern all outstanding awards under that plan until the awards themselves are exercised or terminate in accordance with their terms.  The 2003 Plan authorized 2.5 million share options and restricted shares for employees and outside directors.

With respect to the awards granted under the Plans, the Company recognizes expense on a straight-line basis over the vesting period of the entire award.  Options issued by the Company under its stock option plans have a term of ten years and generally vest ratably over a period of three to four years.  Time-based restricted stock grants are expensed over the vesting period of the award, which is typically four years.  The number of performance based restricted shares that vest or forfeit depend upon achievement of certain targets during the performance period.  Stock-based compensation expense includes the estimated effects of forfeitures.  Stock options issued under the current plan must have an exercise price that may not be less than the fair market value of the Company’s common stock on the date of grant.  The Plans provide for automatic acceleration of vesting in the event of a change in control of the Company.

The Company incurred compensation expense of $0.4 million for each of the quarters ended June 30, 2011 and June 30, 2010 and compensation expense of $0.8 million and $0.7 million for the six month periods ended June 30, 2011 and June 30, 2010, respectively, for all stock-based compensation plans, including restricted stock awards.  No compensation costs were capitalized as part of inventory.

Stock Options

The following table is a summary of option activity of the Company’s plans during the six months ended June 30, 2011:

In thousands except per share amounts and years	Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (years)		Aggregate  Intrinsic Value
Outstanding at December 31, 2010		907		$	8.62
Granted		—		$	—
Exercised		(11	)	$	6.33
Forfeited/Cancelled		(46	)	$	8.21
Outstanding at June 30, 2011		850		$	8.68		6.0	$	2,909
Options exercisable at June 30, 2011		522		$	9.66		4.3	$	1,320

There were no options granted during the quarter and six months ended June 30, 2011.  There were 7,325 options exercised during the quarter and 11,424 options exercised during the six months ended June 30, 2011.  The amount of cash received from the exercise of stock options and the related intrinsic value during the quarter ended June 30, 2011 was minimal.  The amount of cash received from the exercise of stock options during the six months ended June 30, 2011 was $0.1 million and the intrinsic value of options exercised during the six months was minimal.  There were 23,275 options granted during the quarter and six months ended June 30, 2010.  There were 12,350 options exercised during the quarter and 13,650 options exercised during the six months ended June 30, 2010.  The amount of cash received from the exercise of stock options was $0.1 million during the quarter and six months ended June 30, 2010 and the intrinsic value of options exercised during the quarter and six months was minimal.   At June 30, 2011, the total unrecognized compensation cost related to nonvested stock option awards was approximately $0.9 million, with a weighted average expected amortization period of 2.8 years.

Restricted Stock

Restricted stock includes both performance-based and time-based awards. At June 30, 2011, the total unrecognized compensation cost related to unvested restricted stock awards was approximately $1.7 million, with a weighted average expected amortization period of 2.4 years.  The following is a summary of the status of the Company’s unvested restricted shares as of June 30, 2011:

In thousands except per share amounts	Shares			Weighted-Average Grant-Date         Fair Value
Unvested at December 31, 2010		430		$	6.27
Granted		22		$	5.54
Vested		—		$	—
Forfeited/Cancelled		(54	)	$	5.89
Unvested at June 30, 2011		398		$	6.28