6. Stock-Based Compensation
The Company maintains two award plans under which stock-based compensation has been granted, the 2006 Stock Option Plan (the "2006 Plan") and the 2007 Long-Term Incentive Plan (Amended and Restated as of May 5, 2011) (the "LTIP"). Upon the adoption of the LTIP, awards were no longer granted under the 2006 Plan. The LTIP provides for grants of (a) incentive stock options qualified as such under U.S. federal income tax laws, (b) stock options that do not qualify as incentive stock options, (c) stock appreciation rights, (d) restricted stock awards, (e) performance awards, (f) phantom stock, (g) stock bonuses, (h) dividend equivalents, and (i) any combination of such awards.
All awards are made with an exercise price or base price, as the case may be, that is not less than the fair market value per share. The Company uses the Black-Scholes-Merton option-pricing model to estimate the fair value of each stock option grant as of the date of grant. The grant date fair value of restricted stock and performance awards is equal to the closing market price of the Company's common stock on the date of grant.
Stock Options
The following summarizes the stock option activity for the nine months ended September 30, 2012:
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Options |
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Weighted-Average
Exercise Price |
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Aggregate
Intrinsic Value |
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(in thousands)
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|
Outstanding at January 1, 2012 |
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|
1,514,884 |
|
$ |
8.82 |
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|
|
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Granted |
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|
169,088 |
|
$ |
17.76 |
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|
|
|
Exercised |
|
|
(144,265 |
) |
$ |
6.74 |
|
$ |
1,727 |
|
Forfeited |
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|
(4,680 |
) |
$ |
19.19 |
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|
|
|
Expired |
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|
(1,549 |
) |
$ |
18.13 |
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|
|
|
|
|
|
|
|
Outstanding at September 30, 2012 |
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|
1,533,478 |
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$ |
9.96 |
|
$ |
15,693 |
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Restricted Stock
The following summarizes restricted stock activity for the nine months ended September 30, 2012:
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Shares |
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Weighted-Average
Grant Date
Fair Value |
|
Outstanding at January 1, 2012 |
|
|
106,838 |
|
$ |
21.47 |
|
Granted |
|
|
106,289 |
|
$ |
17.95 |
|
Vested |
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|
(25,248 |
) |
$ |
21.07 |
|
Forfeited |
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|
(2,115 |
) |
$ |
18.91 |
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|
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Outstanding at September 30, 2012 |
|
|
185,764 |
|
$ |
19.54 |
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|
On March 24, 2012, a total of 25,248 shares of restricted stock from prior grants became vested and taxable to the individual holder of the restricted stock awards. The Company received 6,186 of those shares as payment for withholding taxes due by holders of the restricted stock awards. The withheld shares were returned to authorized but unissued stock.
Performance Awards
The following summarizes performance awards activity for the nine months ended September 30, 2012:
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Shares |
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Weighted-Average
Grant Date
Fair Value |
|
Outstanding at January 1, 2012 |
|
|
74,435 |
|
$ |
20.39 |
|
Granted |
|
|
41,755 |
|
$ |
17.48 |
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Forfeited |
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|
(1,011 |
) |
$ |
19.76 |
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|
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Outstanding at September 30, 2012 |
|
|
115,179 |
|
$ |
19.34 |
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|
|
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|
Performance stock awards cliff vest on the third anniversary of the performance period, subject to achievement of certain specified levels of the Company's average return-on-equity over the performance period.
Stock-based Compensation Expense
The Company recognizes stock-based compensation expense on a straight-line basis over the vesting period. Stock-based compensation expense is adjusted for changes in estimated and actual forfeitures and also for changes in estimated number of performance shares that will be earned. The Company recognized stock-based compensation expense of approximately $2.0 million and $1.6 million for the nine months ended September 30, 2012 and 2011, respectively, which was included in selling, general and administrative expenses in the accompanying consolidated statements of operations. As of September 30, 2012, there was approximately $5.8 million of total unrecognized stock-based compensation cost related to awards granted under the LTIP, net of estimated forfeitures. Total unrecognized compensation cost will be adjusted for any future changes in estimated and actual forfeitures. |