Stock Compensation

9 Months Ended

Sep. 30, 2011

Stock Compensation [Abstract]

Stock Compensation

Stock Compensation

The Company’s 2008 Incentive Stock Plan (the “2008 Plan”) authorizes the Compensation Committee of the Board of Directors to issue up to 3,000,000 shares of various types of stock based awards including stock options, restricted stock and stock appreciation rights to key employees and directors. In general, options granted and outstanding vest over a three to five year period and expire ten years from the date of grant.

Stock compensation expense was $0.5 million for the three months ended September 30, 2011 and $0.7 million for the three months ended September 30, 2010. Stock compensation expense was $2.2 million and $1.8 million for the nine months ended September 30, 2011 and 2010, respectively. Stock compensation is included in selling, general and administrative expenses in the accompanying Condensed Consolidated Statements of Income. Total unrecognized compensation costs related to non-vested share based compensation arrangements at September 30, 2011 was approximately $3.2 million which is expected to be recognized over the next three years.

On March 3, 2011, 355,025 stock option shares were granted with a three year vesting period. The fair value of these option shares was estimated using a Trinomial Lattice option pricing model based on assumptions set forth in the following table. The Company uses historical data to estimate employee exercise and departure behavior. The risk free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant and through the expected term. The dividend yield rate is based on the Company’s historical dividend yield, and expected volatility is derived from historical volatility of the Company’s shares and those of similar companies measured against the market as a whole.

Model
Risk free interest rate		3.79	%
Expected dividend yield		2.90	%
Expected life of award (years)		6.00
Expected volatility		50.72	%
Fair value per option share	$	3.69

The following table summarizes the stock option activity for the nine months ended September 30, 2011:

				Average		Weighted
				Exercise		Average
	Shares			Price		Life
Outstanding at January 1, 2011		1,845,210		$	11.65
Options Granted		365,025			10.10
Options Exercised		(8,868	)		9.52
Cancelled or Forfeited		(150,644	)		12.59
Outstanding at September 30, 2011		2,050,723		$	11.32	6.97 years
Exercisable at September 30, 2011		1,329,708		$	11.82

The intrinsic value of a stock option is the amount by which the market value of the underlying stock exceeds the exercise price of the option. The total intrinsic value of all stock options exercised during the nine months ended September 30, 2011 and 2010 was approximately $16 and $13, respectively.

In addition, at September 30, 2011 and December 31, 2010, the Company had outstanding 288,500 and 177,250 shares of restricted stock, respectively, with vesting periods through March 2014. The restricted stock awards are rights to receive shares of common stock subject to forfeiture and other restrictions, which generally vest over a three to four year period.