14.

Share-Based Compensation

We have stock compensation plans (collectively, the “Stock Compensation Plans”) that allow incentive and nonqualified stock options, restricted stock and restricted stock units to be granted to key employees and officers and nonqualified stock options and deferred common stock units to be granted to directors. As of December 31, 2011, there were approximately 2,227,554 and 196,314 shares available for issuance to employees and directors, respectively, pursuant to the Stock Compensation Plans.

The following table summarizes the share-based compensation expense recognized for the periods presented:

	Year Ended December 31,
	2011		2010		2009
Stock option plans	$	5,477	$	5,828	$	6,602
Common, deferred, restricted and restricted unit plans		1,953		1,983		2,525
	$	7,430	$	7,811	$	9,127

Stock Options

The exercise price of all options granted under the Stock Compensation Plans is equal to the fair market value of our common stock on the date of the grant. Options may be exercised at any time after vesting and prior to ten years following the date of grant. Options vest upon terms established by the compensation and benefits committee of our board of directors (the “Committee”). Generally, options vest over a three-year period, with one-third vesting in each year. In addition, all options will vest upon a change of control of the Company, as defined in the Stock Compensation Plans. In the case of employees, if a grantee’s employment terminates (i) for cause, all of the grantee’s options, whether vested or unvested, will be automatically forfeited, (ii) by reason of death, disability or retirement after becoming retirement eligible (age 62 and providing ten consecutive years of service) the grantee’s options will automatically vest and (iii) for any other reason, the grantee’s unvested options will be automatically forfeited. In the case of directors, if a grantee’s membership on our board of directors terminates for any reason, the grantee’s unvested options will be automatically forfeited. We have consistently issued new shares to satisfy share option exercises.

The fair value of each option award is estimated on the date of grant using the Black-Scholes-Merton option-pricing formula that uses the assumptions noted in the following table. Expected volatilities are based on historical changes in the market value of our stock. Separate groups of employees that have similar historical exercise behavior are considered separately to estimate expected lives. Options granted have a maximum term of ten years. We base the risk-free interest rate on the U.S. Treasury rate for the week of the grant having a term equal to the expected life of the option.

2011

2010

2009

Expected volatility

61.7% to 71.9%

59.5% to 67.6%

51.7% to 64.9%

Dividend yield

1.25% to 2.25%

0.90% to 1.20%

1.25% to 1.49%

Expected life

3.5 to 4.6 years

Risk-free interest rate

0.39% to 2.18%

0.68% to 2.30%

1.23% to 1.84%

The following table summarizes activity for our most recent fiscal year with respect to awarded options:

						Weighted-
						Average
				Weighted-		Remaining
	Shares Under			Average		Contractual		Aggregate
	Options			Exercise Price		Term		Intrinsic Value
Outstanding at beginning of year		2,144,357		$	24.70
Granted		830,021			16.98
Exercised		(95,516	)		11.89
Forfeited		(403,788	)		23.26
Outstanding at end of year		2,475,074		$	22.84		7.4	$	67
Exercisable at end of year		1,352,273		$	26.74		6.4	$	12

The weighted-average grant-date fair value of options granted during the years ended December 31, 2011, 2010 and 2009 was $7.30, $10.13 and $5.60 per option. The total intrinsic value of options exercised during the years ended December 31, 2011 and 2010 was $0.4 million and $1.2 million. There were no options exercised during 2009.

As of December 31, 2011, we had $6.5 million of unrecognized compensation cost related to unvested stock options. We expect that cost to be recognized over a weighted-average period of 0.9 years. The total grant-date fair values of stock options that vested in 2011, 2010 and 2009 were $3.7 million, $4.6 million and $5.7 million, respectively.

Restricted Stock

Restricted stock vests upon terms established by the Committee and as specified in the award agreement. In addition, all restricted stock will vest upon a change of control of the Company. If a grantee’s employment terminates for any reason other than death or disability, the grantee’s restricted stock will be automatically forfeited unless otherwise determined by the Committee and specified in the award agreement. If a grantee’s employment terminates by reason of death or disability, or if a grantee becomes retirement eligible, the grantee’s restricted stock will automatically vest. Except as specified by the Committee, a grantee shall be entitled to receive any dividends declared on our common stock. Restricted stock vests generally over a three-year period, with one-third vesting in each year. We recognize compensation expense on a straight-line basis over the vesting period.

The following table summarizes activity for our most recent fiscal year with respect to awarded nonvested restricted stock:

	Nonvested			Weighted-Average
	Restricted			Grant Date
	Stock			Fair Value
Balance at beginning of year		5,957		$	42.27
Vested		(5,957	)		42.27
Balance at end of year		-		$	-

The total grant-date fair values of restricted stock that vested in 2011, 2010 and 2009 were $0.3 million, $0.5 million and $1.3 million, respectively.

Deferred Common Stock Units

A portion of the compensation paid to non-employee members of our board of directors is paid in deferred common stock units. Each deferred common stock unit represents one share of common stock, vests immediately upon issuance, and is available to the holder upon termination or retirement from our board of directors. Deferred common stock units awarded to directors receive all cash or other dividends we pay on shares of our common stock.

The following table summarizes activity for our most recent fiscal year with respect to awarded deferred common stock units:

	Deferred		Weighted-Average
	Common Stock		Grant Date
	Units		Fair Value
Balance at beginning of year		103,256	$	26.76
Granted		105,527		8.31
Balance at end of year		208,783	$	17.34

As of December 31, 2011, 2010 and 2009, shareholders’ equity included deferred compensation obligations of $3.6 million, $2.7 million and $2.4 million, respectively, and corresponding amounts for treasury stock.

Restricted Stock Units

A restricted stock unit entitles the grantee to receive a share of common stock upon the vesting of the restricted stock unit or, at the discretion of the Committee, the cash equivalent of the fair market value of a share of common stock. The Committee determines the time period over which restricted stock units granted to employees and directors will vest. In addition, all restricted stock units will vest upon a change of control of the Company. If an employee’s employment with us or our affiliates terminates for any reason other than death, disability or retirement after becoming retirement eligible, the grantee’s restricted stock units will be automatically forfeited unless, and to the extent, the Committee provides otherwise. Restricted stock units generally vest over a three-year period, with one-third vesting in each year. The Committee, in its discretion, may grant tandem dividend equivalent rights with respect to restricted stock units. A dividend equivalent right is a right to receive an amount in cash equal to, and 30 days after, the cash dividends made with respect to a share of common stock during the period such restricted stock unit is outstanding. Payments of dividend equivalent rights associated with restricted stock units that are expected to vest are recorded as dividends; payments associated with restricted stock units that are not expected to vest are recorded as compensation expense.

The following table summarizes activity for our most recent fiscal year with respect to awarded restricted stock units:

				Weighted-Average
	Restricted Stock			Grant Date
	Units			Fair Value
Balance at beginning of year ¹		72,215		$	18.77
Granted		78,763			17.14
Vested		(51,152	)		18.38
Balance at end of year ¹		99,826		$	18.10

¹ Excludes 61,344 units at both the beginning and end of year that have vested due to retirement eligibility, but have not yet been settled or converted to common shares.

As of December 31, 2011, we had $1.4 million of unrecognized compensation cost attributable to nonvested restricted stock units. We expect that cost to be recognized over a weighted-average period of 0.8 years. The total grant-date fair values of restricted stock units that vested in 2011, 2010 and 2009 were $0.9 million, $0.9 million and $0.6 million, respectively.