COMMON STOCK

Stock-Based Compensation Plans

The following table provides a summary of the impact of our outstanding stock-based compensation plans on the results of operations for the periods presented.



	Three Months Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011 (1)			2010
	(in thousands)

Total stock-based compensation expense	$	1,693		$	1,624		$	7,242		$	3,845
Income tax benefit	(643		)	(617		)	(2,751		)	(1,461		)
Net income impact	$	1,050		$	1,007		$	4,491		$	2,384

__________


(1)	Includes a total of $2.5 million, pretax, related to a separation agreement with our former chief executive officer.

Stock Appreciation Rights ("SARs")

In March 2011, the Compensation Committee of our Board of Directors (the "Compensation Committee") awarded 31,552 SARs to our executive officers. The SARs will vest ratably over a three-year period and may be exercised at any point after vesting through March 2021. Pursuant to the terms of the awards, upon exercise, the executives will receive, in shares of common stock, the excess of the market price of the award on the date of exercise over the market price of the award on the date of issuance.

The fair value of each SAR award was estimated on the date of grant using a Black-Scholes pricing model using the assumptions presented in the table below. The expected life of the award was estimated using historical stock option exercise behavior data. The risk-free interest rate was based on the U.S. Treasury yields approximating the expected life of the award in effect at the time of grant. Expected volatilities were based on our historical volatility. We do not expect to pay dividends, nor do we expect to declare dividends in the foreseeable future.



	Nine Months Ended
	September 30, 2011

Expected term of the award	6 years
Risk-free interest rate	2.5		%
Volatility	60.2		%
Weighted average grant date fair value per share	$	25.22

The following table presents the changes in our SARs for the nine months ended 2011.



	Number of Shares Underlying SARs		Grant Date Market Price Per Share		Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)

Outstanding at December 31, 2010	57,282		$	24.44	9.3	$	—
Awarded	31,552		43.95		9.7	—
Exercised	(2,814	)	24.44
Forfeited	(35,549	)	31.57
Outstanding at September 30, 2011	50,471		31.61		8.9	—
Vested and expected to vest at September 30, 2011	46,488		31.45		8.9	—
Exercisable at September 30, 2011	10,636		24.44		8.6	—

Pursuant to a separation agreement with our former chief executive officer and the original terms of the award, during the nine months ended 2011, 29,906 SARs were accelerated to vest, resulting in the acceleration of $0.6 million in stock-based compensation expense. The total compensation cost related to SARs granted and not yet recognized in our statement of operations as of September 30, 2011, was $0.5 million. The cost is expected to be recognized over a weighted average period of 1.5 years.

Restricted Stock Awards

Time-Based Awards. For the nine months ended 2011, the Compensation Committee awarded a total of 101,378 time-based restricted shares to our executive officers that primarily vest ratably over three years from date of grant and 23,360 time-based restricted shares to our non-employee directors also vesting ratably over three years from date of grant.

Pursuant to a separation agreement with our former chief executive officer and the original terms of the award, during the nine months ended 2011, the vesting of 64,442 time-based restricted shares was accelerated, resulting in the acceleration of $1.9 million in stock-based compensation expense. The total compensation cost related to non-vested time-based awards expected to vest and not yet recognized in our statements of operations as of September 30, 2011, was $11.6 million. This cost is expected to be recognized over a weighted average period of 2.5 years.

The following table presents the changes in non-vested time-based awards for the nine months ended 2011.



	Shares		Weighted Average Grant-Date Fair Value per Share

Non-vested at December 31, 2010	525,715		$	25.53
Granted	267,748		34.14
Vested	(235,495	)	27.02
Forfeited	(31,146	)	26.93
Non-vested at September 30, 2011	526,822		29.16



	As of / Nine Months Ended
	September 30, 2011
	(in thousands, except per share data)

Total intrinsic value of time-based awards vested	$	8,615
Total intrinsic value of time-based awards non-vested	10,215
Market price per common share	19.39

Market-Based Awards. The fair value of the market-based restricted shares is amortized ratably over the requisite service period, primarily three years. Generally, the market-based shares vest if the participant is continuously employed throughout the performance period and the market-based performance measure is achieved, with a maximum vesting period of five years. All compensation cost related to the market-based awards will be recognized if the requisite service period is fulfilled, even if the market condition is not achieved.

In March 2011, the Compensation Committee awarded a total of 13,531 market-based restricted shares to our executive officers. In addition to continuous employment, the vesting of these shares is contingent on the Company's total shareholder return ("TSR"), which is essentially the Company’s stock price change including any dividends, as compared to the TSR of a set group of 11 peer companies. The shares are measured over a three-year period ending on December 31, 2013, and can result in a payout between zero and 200% of the total shares awarded. The weighted average grant date fair value per market-based share for these awards granted was computed using the Monte Carlo pricing model using the weighted average assumptions presented in the table below.



	Nine Months Ended
	September 30, 2011

Expected term of award	3 years
Risk-free interest rate	1.1		%
Volatility	74.2		%
Weighted average grant date fair value per share	$	58.53

Expected volatility was based on a blend of our historical and implied volatility. The expected lives of the awards were based on the requisite service period. The risk-free interest rate was based on the U.S. Treasury yields in effect at the time of grant or modification and extrapolated to approximate the life of the award. We do not expect to pay dividends, nor do we expect to declare dividends in the foreseeable future.

The following table presents the change in non-vested market-based awards for the nine months ended 2011.



	Shares		Weighted Average Grant-Date Fair Value per Share

Non-vested at December 31, 2010	79,550		$	32.52
Granted	13,531		58.53
Vested	(4,109	)	6.47
Forfeited	(21,927	)	34.32
Non-vested at September 30, 2011	67,045		38.78

Pursuant to a separation agreement with our former chief executive officer and the original terms of the award, during the nine months ended 2011, the vesting of 4,109 market-based restricted shares was accelerated and 21,927 market-based restricted shares were forfeited. The impact on stock-based compensation for the vesting and forfeiture of these market-based restricted shares was immaterial. The total compensation cost related to non-vested market-based awards expected to vest and not yet recognized in our statement of operations as of September 30, 2011, was $0.3 million. This cost is expected to be recognized over a weighted average period of 2.2 years.

Treasury Share Purchases

In accordance with our stock-based compensation plans, employees and directors may surrender shares of the Company's common stock to cover tax withholding obligations upon the vesting and exercise of share-based awards. The shares acquired may be retired or reissued to service awards under our 2010 Long-Term Equity Compensation Plan (the "2010 Plan"). For shares that are retired, we first charge any excess of cost over the par value to additional paid-in-capital ("APIC") to the extent we have amounts in APIC, with any remaining excess cost charged to retained earnings. For shares reissued to service awards under the 2010 Plan, shares are recorded at cost and upon reissuance, we reduce the carrying value of shares acquired and held pursuant to the 2010 Plan by the weighted average cost per share with an offsetting charge to APIC. During the nine months ended September 30, 2011, we acquired 81,051 shares pursuant to our stock-based compensation plans for payment of tax liabilities, of which 8,760 shares were reissued pursuant to our 2010 Plan and the remaining 67,558 shares retired.