STOCK-BASED COMPENSATION

In 2000, the Company adopted a stock incentive plan (the "2000 Plan"), which provided for awards in the form of incentive stock options, non-qualified stock options, restricted stock awards, performance stock awards and common stock awards. The 2000 Plan expired on April 15, 2010, but there were outstanding on December 31, 2012 options granted under the 2000 Plan for an aggregate of 97,200 shares which will remain in effect until such options are either exercised or expire in accordance with their terms.

In 2010, the Company adopted an equity incentive plan (the "2010 Plan"), which provides for awards of up to 6,000,000 shares of Common Stock (subject to certain anti-dilution adjustments) in the form of (i) stock options, (ii) stock appreciation rights, (iii) restricted stock, (iv) restricted stock units, and (v) certain other stock-based awards. The Company ceased issuing stock options in 2008, and all awards issued to date under the 2010 Plan have been in the form of restricted stock awards and performance stock awards as described below.

As of December 31, 2012 and 2011, the Company had the following types of stock-based compensation awards outstanding under the 2000 Plan and the 2010 Plan: stock options, restricted stock awards and performance stock awards. The stock options generally become exercisable up to five years from the date of grant, subject to certain employment requirements, and terminate ten years from the date of grant. The restricted stock awards generally vest over three to five years subject to continued employment. The performance stock awards vest depending on the satisfaction of certain performance criteria as described below.

Total stock-based compensation cost charged to income from operations for the years ended December 31, 2012, 2011 and 2010 was $7.5 million, $8.2 million and $7.2 million, respectively. The total income tax benefit recognized in the consolidated statements of income from stock-based compensation was $2.9 million, $2.4 million and $2.7 million for the years ended December 31, 2012, 2011 and 2010, respectively.

Stock Option Awards

The Company uses the Black-Scholes option pricing model to value the compensation expense associated with its stock option awards based on the assumptions in the following table. In addition, the Company estimates forfeitures when recognizing compensation expense, and adjusts its estimate of forfeitures over the requisite service period based on the extent to which actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures are recognized through a cumulative catch-up adjustment in the period of change and also impact the amount of compensation expense to be recognized in future periods. The expected forfeiture rates used to calculate compensation expense were 4% for non-executive employees, executives and directors.

The Company ceased issuing stock option awards in May 2008 and as of December 31, 2012, all remaining options then outstanding had vested.

The following table summarizes activity under the Plans relating to stock options:



Stock Options	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value as of 12/31/12 (in thousands)
Outstanding at January 1, 2012	144,698		$	12.12	2.32	$	7,469
Exercised	(47,498	)	6.01
Outstanding, exercisable and vested at December 31, 2012	97,200		$	15.10	1.96	$	3,880

As of December 31, 2012, there was no unrecognized compensation cost related to stock option awards under the Company's stock incentive plans. The total intrinsic value of options exercised during 2012, 2011 and 2010 was $2.3 million, $2.1 million, and $2.8 million, respectively.

Restricted Stock Awards

The following information relates to restricted stock awards that have been granted to employees and directors under the Company's stock incentive plans. The restricted stock awards are not transferable until vested and the restrictions generally lapse upon the achievement of continued employment over a three-to-five-year period or service as a director until the following annual meeting of shareholders.

The fair value of each restricted stock grant is based on the closing price of the Company's stock on the date of grant and is amortized to expense over its vesting period. The expected forfeiture rate used to calculate compensation expense was 4% for non-executive employees, executives and directors.

The following table summarizes information about restricted stock awards for the year ended December 31, 2012:



Restricted Stock	Number of Shares		Weighted Average Grant-Date Fair Value
Unvested at January 1, 2012	309,051		$	43.36
Granted	165,261		58.12
Vested	(60,177	)	38.83
Forfeited	(61,308	)	48.82
Unvested at December 31, 2012	352,827		$	50.10

As of December 31, 2012, there was $15.6 million of total unrecognized compensation cost arising from restricted stock awards under the Company's stock incentive plans. This cost is expected to be recognized over a weighted average period of 3.6 years. The total fair value of restricted stock vested during 2012, 2011 and 2010 was $3.3 million, $3.7 million and $1.4 million, respectively.

Performance Stock Awards

The following information relates to performance stock awards that have been granted to employees under the Company's stock incentive plans. Performance stock awards are subject to performance criteria established by the Compensation Committee of the Company's Board of Directors prior to or at the date of grant. The vesting of the performance stock awards is based on achieving such targets typically based on revenue and Adjusted EBITDA margin and also includes continued service conditions. For the 2012 performance awards, the Company added a performance metric related to Total Recordable Incident Rate.

The fair value of each performance stock award is based on the closing price of the Company's stock on the date of grant and is amortized to expense over the service period if achievement of performance measures is then considered probable. The expected forfeiture rate used to calculate compensation expense was 4% for non-executive employees, executives and directors.

For the performance stock awards granted in 2012, the Compensation Committee of the Company's Board of Directors established two-year performance targets which could potentially be achieved in either 2012 or 2013. Management determined that one of the three performance criteria was considered probable to be achieved and recognized stock-based compensation expense through sales, general and administrative expenses for the year ended December 31, 2012 with respect to the performance stock awards.

For the performance stock awards granted in 2011, the Compensation Committee of the Company's Board of Directors established two-year performance targets which could potentially be achieved in either 2011 or 2012. Based on the Company's performance during 2011, management determined that those performance targets had been achieved and the Company therefore recognized cumulative expense through sales, general and administrative expenses for the years ended December 31, 2012 and 2011 with respect to the performance stock awards granted in 2011.

For the performance stock awards granted in 2010, the Compensation Committee of the Company's Board of Directors established two-year performance targets which could potentially be achieved in either 2010 or 2011. Based on the Company's performance during 2010, management determined that those performance targets had been achieved and the Company therefore recognized cumulative expense through sales, general and administrative expenses for the year ended December 31, 2011 and 2010 with respect to the performance stock awards granted in 2010.

The following table summarizes information about performance stock awards for the year ended December 31, 2012:



Performance Stock	Number of Shares		Weighted Average Grant-Date Fair Value
Unvested at January 1, 2012	112,923		$	41.09
Granted	70,511		66.98
Vested	(108,306	)	41.12
Forfeited	(9,792	)	54.58
Unvested at December 31, 2012	65,336		$	66.96

As of December 31, 2012, there was $2.0 million of total unrecognized compensation cost arising from non-vested compensation related to performance stock awards then deemed probable of vesting under the Company's stock incentive plans that will be recognized over the next two years. The total fair value of performance awards vested during 2012, 2011 and 2010 was $6.0 million, $16.8 million and $0.6 million, respectively.

Employee Stock Purchase Plan

In May of 1995, the Company's stockholders approved an Employee Stock Purchase Plan (the "ESPP"), which is a qualified employee stock purchase plan under Section 423 of the Internal Revenue Code of 1986, as amended, through which employees of the Company are given the opportunity to purchase shares of common stock. Under the ESPP, a total of 2.0 million shares of common stock were originally reserved for offering to employees, in quarterly offerings of 100,000 shares each plus any shares not issued in any previous quarter, commencing on July 1, 1995 and on the first day of each quarter thereafter. In 2005, the Company's stockholders approved an increase of 1.0 million in the maximum number of shares which can be issued under the ESPP. As of December 31, 2012, the Company had reserved 517,140 shares of common stock available for purchase under the ESPP. Employees who elect to participate in an offering may utilize up to 10% of their payroll for the purchase of common stock at 85% of the closing price of the stock on the first day of such quarterly offering or, if lower, 85% of the closing price on the last day of the offering. Due to the discount of 15% offered to employees for purchase of shares under the ESPP, the Company considers such plan as compensatory. The weighted average per share fair values of the purchase rights granted under the ESPP during the years ended December 31, 2012 and 2011 was $10.29 and $8.45, respectively.

Common Stock Awards

In the years ended December 31, 2012 and 2011, the Company did not issue any shares of common stock without restrictions under the Company's 2010 Plan.