Shareholders' Equity Transactions

12 Months Ended

Dec. 31, 2012

Stockholders' Equity Note [Abstract]

Shareholders' Equity Transactions

Shareholders’ Equity Transactions

The company’s Common Shares have a $.25 stated value. The Common Shares and the Class B Common Shares generally have identical rights, terms and conditions and vote together as a single class on most issues, except that the Class B Common Shares have ten votes per share, carry a 10% lower cash dividend rate and, in general, can only be transferred to family members. Holders of Class B Common Shares are entitled to convert their shares into Common Shares at any time on a share-for-share basis.

The 2003 Performance Plan, as amended (the “2003 Plan”), allows the Compensation and Management Development Committee of the Board of Directors (the “Committee”) to grant up to 6,800,000 Common Shares in connection with incentive stock options, non-qualified stock options, stock appreciation rights and stock awards (including the use of restricted stock), which includes the addition of 3,000,000 Common Shares authorized for issuance under the 2003 Plan, as approved by the company’s shareholders on May 21, 2009. The maximum aggregate number of Common Shares that may be granted during the term of the 2003 Plan pursuant to all awards, other than stock options, is 1,300,000 Common Shares. The Committee has the authority to determine which participants will receive awards, the amount of the awards and the other terms and conditions of the awards. During 2012, 2011 and 2010, the Committee granted 761,892, 608,896 and 646,797 non-qualified stock options, respectively, each having a term of ten years and generally granted at the fair market value of the company’s Common Shares on the date of grant under the 2003 Plan. There were no stock appreciation rights outstanding at December 31, 2012, 2011 or 2010.

Restricted stock awards for 118,200, 101,329, and 92,900 shares were granted in years 2012, 2011 and 2010 without cost to the recipients. The 2012 weighted average fair value of the 2012 restricted stock awards was $13.41. The restricted stock awards vest ratably over the four years after the award date. There were 96,520 restricted stock awards with a weighted average fair value of $23.59 that vested in 2012 and 10,631 restricted stock awards were forfeited in 2012.

At December 31, 2012 and 2011, there were 260,548 and 249,499 shares, respectively, for restricted stock awards that were unvested. Unearned restricted stock compensation of $4,323,000 in 2012, $5,227,000 in 2011 and $5,190,000 in 2010, determined as the market value of the shares at the date of grant, is being amortized on a straight-line basis over the vesting period. Compensation expense of $2,241,000, $2,199,000 and $2,022,000 was recognized in 2012, 2011 and 2010, respectively, related to restricted stock awards granted since 2004.

The 2003 Plan and the 1994 Performance Plan have provisions that allow employees to exchange mature shares to pay the exercise price and surrender shares from the options or restricted awards to cover the minimum tax withholding obligation. Under these provisions, the company acquired approximately 35,000 treasury shares for $459,000 in 2012, 31,000 shares for $676,000 in 2011 and 280,000 shares for $7,830,000 in 2010.

The following table summarizes information about stock option activity for the three years ended 2012, 2011 and 2010:

	2012			Weighted Average Exercise Price		2011			Weighted Average Exercise Price		2010			Weighted Average Exercise Price
Options outstanding at January 1	4,455,365			$	28.99	4,484,195			$	29.60	4,619,528			$	29.28
Granted	761,892			13.44		608,896			24.57		646,797			25.22
Exercised	(9,417		)	10.70		(178,744		)	23.15		(399,144		)	23.08
Canceled	(543,206		)	31.52		(458,982		)	31.42		(382,986		)	25.07
Options outstanding at December 31	4,664,634			$	26.21	4,455,365			$	28.99	4,484,195			$	29.60
Options exercise price range at December 31	13.37 to					10.70 to					10.70 to
	$	47.80				$	47.80				$	47.80
Options exercisable at December 31	3,074,275					2,960,317					2,941,772
Options available for grant at December 31*	1,248,033					1,914,574					2,478,905

 ________________________

 * Options available for grant as of December 31, 2012 reduced by net restricted stock award activity of 694,337.

The following table summarizes information about stock options outstanding at December 31, 2012:

	Options Outstanding				Options Exercisable
Exercise Prices	Number Outstanding At 12/31/12	Weighted Average Remaining Contractual Life Years	Weighted Average Exercise Price		Number Exercisable At 12/31/12	Weighted Average Exercise Price
$ 13.37 – $15.00	742,186	9.6	$	13.39	1,986	$	13.37
$ 15.01 – $25.00	1,774,431	6.8	22.50		1,198,832	22.15
$ 25.01 – $35.00	1,064,676	6.8	25.85		790,117	25.98
$ 35.01 – $47.80	1,083,341	1.7	41.45		1,083,340	41.45
Total	4,664,634	5.8	$	26.21	3,074,275	$	29.93

The plans provide that shares granted come from the company’s authorized but un-issued Common Shares or treasury shares. In addition, the company’s stock-based compensation plans allow participants to exchange mature shares for the exercise price and surrender shares for minimum withholding taxes, which results in the company acquiring treasury shares. Pursuant to the plans, the Committee has established that the majority of the 2012 grants may not be exercised within one year from the date granted and options must be exercised within ten years from the date granted. Accordingly, for the stock options issued in 2012, 2011 and 2010, 25% of such options vested in the year following issuance. The stock options awarded during such years provided a four-year vesting period whereby options vest equally in each year. The 2012, 2011 and 2010 expense has been adjusted for estimated forfeitures of awards that will not vest because service or employment requirements have not been met.

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions:

	2012		2011		2010
Expected dividend yield	0.4	%	0.2	%	0.21	%
Expected stock price volatility	41.0	%	37.3	%	39.6	%
Risk-free interest rate	0.94	%	1.11	%	1.57	%
Expected life in years	6.0		5.9		3.9
Forfeiture percentage	7.6	%	6.9	%	10.5	%

Expected stock price volatility is calculated at each date of grant based on historical stock prices for a period of time commensurate with the expected life of the option. The weighted-average fair value of options granted during 2012, 2011 and 2010 was $5.14, $8.88 and $7.83, respectively. The weighted-average remaining contractual life of options outstanding at December 31, 2012, 2011 and 2010 was 5.8, 5.7 and 5.8 years, respectively. The weighted-average contractual life of options exercisable at December 31, 2012 was 4.3 years. The total intrinsic value of stock awards exercised in 2012, 2011 and 2010 was $41,000, $1,429,000 and $1,928,000, respectively. As of December 31, 2012, the intrinsic value of all options outstanding and of all options exercisable was $2,161,000 and $6,000, respectively.

The exercise of stock awards in 2012, 2011 and 2010 resulted in cash received by the company totaling $0, $4,139,000 and $2,912,000 for each period, respectively with no tax benefits for any period. The total fair value of awards vested during 2012, 2011 and 2010 was $4,398,000, $4,362,000 and $5,261,000, respectively.

As of December 31, 2012, there was $14,021,000 of total unrecognized compensation cost from stock-based compensation arrangements granted under the plans, which is related to non-vested options and shares, which includes $4,323,000 related to restricted stock awards. The company expects the compensation expense to be recognized over a weighted-average period of approximately two years. Prior to the adoption of ASC 718, Compensation—Stock Compensation, the company presented all tax benefit deductions resulting from the exercise of stock options as a component of operating cash flows in the Consolidated Statement of Cash Flows. In accordance with ASC 718, any tax benefits resulting from tax deductions in excess of the compensation expense recognized for those options is classified as a component of financing cash flows.

Effective July 8, 2005, the company adopted a new Rights Agreement to replace the company’s previous shareholder rights plan, which expired on July 7, 2005. In order to implement the new Rights Agreement, the Board of Directors declared a dividend of one Right for each outstanding share of the company’s Common Shares and Class B Common Shares to shareholders of record at the close of business on July 19, 2005. Each Right entitles the registered holder to purchase from the company one one-thousandth of a Series A Participating Serial Preferred Share, without par value, at a Purchase Price of $180.00 in cash, subject to adjustment. The Rights will not become exercisable until after a person (an “Acquiring ”) has acquired, or obtained the right to acquire, or commences a tender offer to acquire, shares representing 30% or more of the company’s outstanding voting power, subject to deferral by the Board of Directors. After the Rights become exercisable, under certain circumstances, the Rights may be exercisable to purchase Common Shares of the company, or common shares of an acquiring company, at a price equal to the exercise price of the Right divided by 50% of the then current market price per Common Share or acquiring company common share, as the case may be. The Rights will expire on July 18, 2015 unless previously redeemed or exchanged by the company. The company may redeem and terminate the Rights in whole, but not in part, at a price of $0.001 per Right at any time prior to 10 days following a public announcement that an Acquiring Party has acquired beneficial ownership of shares representing 30% or more of the company’s outstanding voting power, and in certain other circumstances described in the Rights Agreement.