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 March 31,
	2012			2011
	(in thousands)

Total stock-based compensation expense	$	1,946		$	1,545
Income tax benefit	(741		)	(587		)
Net expense	$	1,205		$	958

Stock Appreciation Rights ("SARs")

The SARs will vest ratably over a three-year period and may be exercised at any point after vesting through 10 years from the date of issuance. Pursuant to the terms of the awards, upon exercise, the executive officers 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.

In March 2012, the Compensation Committee of our Board of Directors (the "Committee") awarded 68,361 SARs to our executive officers. 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.



	Three Months Ended March 31,
	2012			2011

Expected term of the award	6 years			6 years
Risk-free interest rate	1.1		%	2.5		%
Volatility	64.3		%	60.2		%
Weighted average grant date fair value per share	$	17.61		$	25.22

The following table presents the changes in our SARs.



	Three Months Ended March 31,
	2012						2011
	Number of SARs	Weighted Average Exercise Price		Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)		Number of SARs	Weighted Average Exercise Price		Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)

Outstanding beginning of year, January 1	50,471	$	31.61	8.6	$	341	57,282	$	24.44	9.3	$	1,020
Awarded	68,361	30.19		9.8	—		31,552	43.95		10.0	—
Outstanding at March 31,	118,832	30.80		9.2	875		88,834	31.37		9.4	1,478
Vested and expected to vest at March 31,	111,137	30.76		9.2	825		79,951	31.37		9.4	1,330
Exercisable at March 31,	16,822	31.61		8.4	135		—	—		—	—

The total compensation cost related to SARs granted and not yet recognized in our statement of operations as of March 31, 2012 was $1.5 million. The cost is expected to be recognized over a weighted average period of 2.5 years.

Restricted Stock Awards

Time-Based Awards. In January 2012, the Committee awarded a total of 79,889 time-based restricted shares to our executive officers that vest ratably over a three-year period ending on January 16, 2015.

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 March 31, 2012 was $12 million. This cost is expected to be recognized over a weighted average period of 2.4 years.

The following table presents the changes in non-vested time-based awards for the three months ended 2012.



	Shares		Weighted Average Grant-Date Fair Value per Share

Non-vested at December 31, 2011	527,801		$	29.29
Granted	101,252		31.23
Vested	(30,543	)	31.74
Forfeited	(7,576	)	26.47
Non-vested at March 31, 2012	590,934		29.58



	As of / Three Months Ended March 31,
	2012		2011
	(in thousands, except per share data)

Total intrinsic value of time-based awards vested	$	1,104	$	1,400
Total intrinsic value of time-based awards non-vested	21,918		25,629
Market price per common share as of March 31	37.09		48.01
Weighted average grant date fair value per share	31.23		43.95

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 2012, the Committee awarded a total of 30,541 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 15 peer companies. The shares are measured over a three-year period ending on December 31, 2014, 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.



	Three Months Ended March 31,
	2012			2011

Expected term of award	3 years			3 years
Risk-free interest rate	0.3		%	1.1		%
Volatility	65.3		%	74.2		%
Weighted average grant date fair value per share	$	36.54		$	58.53

Expected volatility was based on our historical 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 three months ended 2012.



	Shares	Weighted Average Grant-Date Fair Value per Share

Non-vested at December 31, 2011	43,081	$	42.05
Granted	30,541	36.54
Non-vested at March 31, 2012	73,622	41.87

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 March 31, 2012, was $1.2 million. This cost is expected to be recognized over a weighted average period of 2.5 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 three months ended March 31, 2012, we acquired 10,035 shares pursuant to our stock-based compensation plans for payment of tax liabilities, of which 6,162 shares were retired and the remaining 3,873 shares are available for reissuance pursuant to our 2010 Plan