16. Stock-Based Compensation

Stock Options and Non-vested Restricted Stock

The Company previously offered a stock incentive plan whereby awards were granted to certain employees and non-employee directors of the Company in various forms including restricted shares of Company common stock and options to purchase Company common stock. Awards were discretionary and were determined by the Compensation Committee of the Board of Directors. Awards vested based upon service conditions. Option and share awards provided for accelerated vesting if there was a change in control (as defined in the award agreements). Non-vested restricted shares generally vested over requisite service periods of four years and were considered to be outstanding shares, beginning on the date of each grant. Stock option awards were granted with an exercise price equal to market price of the Company’s stock on the date of grant. No stock options were granted in 2012, 2011 or 2010. As of December 31, 2012, 1.5 million shares remained available for issuance under the 2009 Equity Incentive Plan.

The changes to the composition of the Company’s board of directors which occurred during the first quarter of 2011 constituted a “change in control event” under the terms of certain of the Company’s incentive plans. As a result, the Company accelerated the vesting of approximately 300,000 restricted stock units resulting in $6.2 million in accelerated stock compensation expense recognized in the first quarter of 2011.

Stock-based compensation cost is measured at the grant date based on the fair value of the award and is typically recognized as expense on a straight-line basis over the requisite service period, which is the vesting period. Upon exercise of stock options or vesting of restricted stock, the Company will issue new common stock.

Total stock-based compensation recorded in Corporate expense, net, on the Consolidated Statements of Operations for the three years ended December 31, 2012 is as follows:


	2012		2011		2010
Stock compensation expense before tax benefit	$	998	$	8,452	$	5,159
Income tax benefit		384		3,254		2,060

	$	614	$	5,198	$	3,099

The following table sets forth the summary of option activity outstanding under the stock option program for 2012:


	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value ($000)
Balance at December 31, 2011		147,525	$	48.00		3.5		—
Forfeited or expired		42,425	$	35.72		—		—

Balance at December 31, 2012		105,100	$	52.96		3.7		—

Vested or expected to vest at December 31, 2012		105,100	$	52.96		3.7		—

Exercisable at December 31, 2012		105,100	$	52.96		3.7		—

The total intrinsic value of options exercised during both 2011 and 2010 was less than $0.1 million. The intrinsic value is calculated as the difference between the market value as of the exercise date and the exercise price of the shares. Shares of Company stock issued upon the exercise of stock options in 2011 and 2010 were 4,000 and 178,886 shares, respectively. No options were exercised during 2012.

Cash received for strike prices from options exercised under stock-based payment arrangements for 2011 and 2010 was $0.1 million and $5.1 million, respectively. The actual tax benefit realized for the tax deductions from options exercised under stock-based arrangements totaled zero and $0.4 million, respectively, for 2011 and 2010.

The following table sets forth the summary of restricted stock unit activity outstanding under the restricted stock unit program for 2012:


Nonvested Service Based Restricted Stock Units	Number of Units			Weighted Average Grant Date Fair Value
Balance at December 31, 2011		37,815		$	26.99
Granted		59,891		$	16.30
Vested		(83,967	)	$	17.80
Forfeited		(2,352	)	$	21.52

Balance at December 31, 2012		11,387		$	21.52

The weighted average grant date fair value of restricted stock units during 2012, 2011 and 2010 was $16.30, $28.01 and $27.86, respectively. In 2012, less than 0.1 million of vested restricted stock awards were granted to the Company’s Chief Executive Officer in lieu of a cash bonus and to certain of the Company’s directors as fees for services rendered.

As of December 31, 2012, there was less than $0.1 million of unrecognized compensation cost that will be recognized in the first quarter of 2013. The total fair values of restricted stock units and stock options which vested during the years ended December 31, 2012, 2011 and 2010 was $1.5 million, $9.7 million, and $6.7 million, respectively.

Market Condition Grants

From time to time the Company has granted to select executives and other key employees restricted stock units whose vesting is based upon the achievement of certain market conditions, which are defined as the Company’s total shareholder return as compared to the total shareholder return of certain peer groups during a three year performance period. The Company used a Monte Carlo simulation pricing model to determine the fair value of its market condition awards. The determination of the fair value of market condition-based awards was affected by the stock price as well as assumptions regarding a number of other variables. These variables include expected stock price volatility over the requisite performance term of the awards, the relative performance of the Company’s stock price and shareholder returns compared to those companies in its peer groups and a risk-free interest rate assumption. Compensation cost is recognized regardless of the achievement of the market condition, provided the requisite service period is met.

At December 31, 2011, there were 23,192 restricted stock units granted with market conditions outstanding with a weighted average grant date fair value of $15.69 that vested, forfeited or were cancelled in the first quarter of 2012.