STOCK-BASED COMPENSATION

6 Months Ended

Jun. 30, 2011

STOCK-BASED COMPENSATION

5.  STOCK-BASED COMPENSATION

The Company recognizes all stock-based payments to its directors, officers and other eligible employees, including grants of stock options, restricted stock, stock appreciation rights and performance units based upon their fair value.  The Company uses a binomial option-pricing model, which incorporates various assumptions, including expected volatility, expected term, dividend yield and risk-free interest rates, to value new stock option awards it grants.  The expected volatility is based upon the Company’s historical experience.  The expected term represents the period of time that options granted are expected to be outstanding.  The risk-free interest rate utilized for periods throughout the contractual life of the options are based upon U.S. Treasury security yields at the time of grant.

The Company’s policy is to recognize expense for all stock-based awards using the straight-line attribution method.  The amount of compensation costs related to stock options, nonvested restricted stock, stock appreciation rights and performance units not yet recognized was $7.0 million at June 30, 2011, for which the expense will be recognized through 2014.