11. Equity Compensation Plans

As of December 31, 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 may 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; however, the 1992 Plan 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 and will expire in October 2012.

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. Upon the exercise of a stock option under its stock option plans, shares are issued from authorized shares or treasury shares held by the Company.

The Company incurred compensation expense of $1.3 million, $1.4 million, and $1.4 million for the years ended December 31, 2011, 2010 and 2009, respectively, for all stock-based compensation plans, including restricted stock awards. No compensation costs were capitalized as part of inventory. The associated tax benefit realized was $0.3 million, $0.1 million, and $0.1 million for the years ended December 31, 2011, 2010 and 2009, respectively.

Stock Options

The fair value of each option granted was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions for the years ended December 31:

	2011			2010			2009
Risk-free interest rate		2.6	%		2.2	%		2.6	%
Expected life		5.5 years			5.3 years			5.5 years
Expected volatility		69	%		65	%		61	%
Expected dividend yield		0	%		0	%		0	%

The following is a summary of the option activity as of December 31, 2011 and changes during the year then ended:

In thousands except per share amounts and years
Outstanding Stock Options	Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (years)		Aggregate Intrinsic Value
Outstanding at December 31, 2010		907		$	8.62
Granted		178		$	8.94
Exercised		(36	)	$	8.34
Forfeited/Cancelled		(87	)	$	8.75
Outstanding at December 31, 2011		962		$	8.68		6.7	$	1,328
Options exercisable at December 31, 2011		559		$	9.25		4.9	$	671

The Company granted 177,500, 200,775 and 173,000 stock options during 2011, 2010 and 2009, respectively. The weighted-average grant-date fair value of options granted during the years 2011, 2010 and 2009 was $5.43 $4.48 and $2.95, respectively. There were 35,874 options exercised in 2011, 15,700 options exercised in 2010, and no options exercised in 2009. The total intrinsic value for options exercised during 2011 was $0.1 million and the associated tax benefit realized from stock options exercised was minimal. The total intrinsic value and associated tax benefit realized for options exercised in 2010 were minimal. The amount of cash received from the exercise of stock options was $0.1 million during both of the years 2011 and 2010. At December 31, 2011, the total unrecognized compensation cost related to non-vested stock option awards was approximately $1.4 million, with a weighted average expected amortization period of 3.2 years.

Restricted Stock

Restricted stock includes both performance-based and time-based awards. Compensation for restricted stock is recorded based on the market value of the stock on the grant date and amortized to expense over the vesting period of the award. The Company granted 22,000, 116,000 and 333,000 shares of restricted stock during 2011, 2010 and 2009, respectively. The weighted average fair value per share of restricted stock granted was $5.54, $7.80 and $5.48 during 2011, 2010 and 2009, respectively. During 2011, 2010 and 2009, respectively, there were 59,440 shares, 83,000 shares and 13,050 shares of restricted stock forfeited. The fair value of awards for which restrictions lapsed during the years ended December 31, 2011, 2010, and 2009 was $0.6 million, $0.4 million and $0.4 million, respectively. At December 31, 2011, the total unrecognized compensation cost related to non-vested restricted stock awards was approximately $1.2 million, with a weighted average expected amortization period of 2.2 years.

The following is a summary of the Company’s unvested restricted shares as of December 31, 2011 and changes during the year ended December 31, 2011:

In thousands except per share amounts
Unvested Restricted Shares	Shares			Weighted- Average Grant-Date Fair Value
Unvested at December 31, 2010		430		$	6.27
Granted		22		$	5.54
Vested		(122	)	$	6.23
Forfeited/Cancelled		(59	)	$	5.89
Unvested at December 31, 2011		271		$	6.31

Stock Repurchase Program

In August 2003, the Company’s Board of Directors approved a Stock Repurchase Program (the “Repurchase Program”) to mitigate the potentially dilutive effects of stock options and shares of restricted and unrestricted stock granted by the Company. Under the Repurchase Program, shares may be purchased by the Company up to the quantity of shares underlying options and other equity-based awards granted under shareholder approved plans.

As of December 31, 2011, there were 2,501,830 shares remaining available for purchase under the Repurchase Program. There was no repurchase activity under the Repurchase Program during 2011. The 22,371 shares acquired by the Company during the year ended December 31, 2011 represent shares withheld by the Company pursuant to provisions in agreements with recipients of restricted stock granted under the Company’s equity compensation plans allowing the Company to withhold the number of shares having fair value equal to each recipient’s tax withholding due.