13. Stock-Based Compensation Plans

The Company has one stock-based incentive plan, which incorporates and supersedes its two previous plans (see Note 1 — Accounting for Stock-Based Compensation). Participants are granted stock-based awards only if the applicable Company-wide or profit-center operating goals, or both, or strategic goals, established by the Compensation and Leadership Development Committee of the Board of Directors at the beginning of the year, are met.

The fair value of each restricted stock unit award is estimated on the date of the award based on the closing market price of the underlying stock on the day preceding the date of the award. On February 3, 2014, 342,950 restricted stock units were awarded, including 9,975 awarded to the Company’s independent directors, at an estimated value of $32.60 per share, the closing price on January 31, 2014. The restrictions on these awards generally lapse one quarter on each of the date of the award and the first, second and third anniversaries of the date of the award. Restrictions on awards to three executive officers of the Company lapse three quarters on the third anniversary of the date of the award and one quarter on the fourth anniversary of the date of the award.

The following table summarizes the Company’s unvested restricted stock unit activity for the year ended December 31, 2013:

					Aggregate
			Weighted-		Intrinsic
	Shares		Average		Value *
Unvested Restricted Stock Units (RSUs)	(in thousands)		Price		(in thousands)

Outstanding at January 1, 2013	264		$	33.23
Awarded	359		31.96
Vested	(174	)	32.62
Forfeited	(1	)	32.47
Outstanding at December 31, 2013	448		$	32.48	$	16,447
Outstanding and expected to vest at December 31, 2013	436		$	32.45	$	16,021

* The intrinsic value is calculated using the closing price per share of $36.73 as reported by the New York Stock Exchange on December 31, 2013.

The total intrinsic value of restricted stock units vested during the years ended December 31, 2013 and 2012, was $5.7 million and $3.1 million, respectively, based on the market value on the award date.

The fair value of each stock option award was estimated on the date of grant using the Black-Scholes option pricing model. Expected volatility is based on historical volatilities of the Company’s common stock measured monthly over a term that is equivalent to the expected life of the option. The expected terms of options are estimated based on the Company’s prior exercise experience and future expectations of the exercise and termination behavior of the grantees. The risk-free rate is based on the yield of United States Treasury zero-coupon bonds with maturities comparable to the expected life in effect at the time of grant. The dividend yield is based on the expected dividend rate on the grant date.

The assumptions used in the Black-Scholes option pricing model for options granted in 2011 were as follows:

Number		Risk-
of Options		Free
Granted	Grant	Interest		Dividend		Expected				Fair
(in thousands)	Date	Rate		Yield		Life	Volatility		Exercise Price	Value

1994 Plan
1,362	02/03/11	2.62	%	1.75	%	6.2 years	39.0	%	$29.66 to $32.63	$	10.33

1995 Plan
30	02/15/11	2.92	%	1.76	%	6.6 years	38.0	%	$29.58	$	10.49

No stock options were granted under the 2011 Plan in 2012 or 2013.

The following table summarizes the Company’s stock option activity for the year ended December 31, 2013:

					Weighted-
			Weighted-		Average	Aggregate
			Average		Remaining	Intrinsic
	Shares		Exercise		Contractual	Value*
Non-Qualified Stock Options	(in thousands)		Price		Life	(in thousands)

Outstanding at January 1, 2013	1,907		$	31.58	3.8	$	5,347
Exercised	(512	)	$	29.39
Forfeited	(374	)	$	40.65
Outstanding at December 31, 2013	1,021		$	29.35	4.0	$	7,539
Outstanding and expected to vest at December 31, 2013	1,003		$	29.35	4.0	$	7,404
Exercisable at December 31, 2013	573		$	29.14	3.9	$	4,352

* The intrinsic value represents the amount by which the fair market value of the underlying common stock exceeds the exercise price of the option, using the closing price per share of $36.73 as reported by the New York Stock Exchange on December 31, 2013.

The total intrinsic value of stock options exercised during the three years ended December 31, 2013, 2012 and 2011, was $2.6 million, $1.1 million and $0.1 million, respectively.

A summary of the status of unvested stock options as of December 31, 2013, and changes during the year ended December 31, 2013, is presented below:

			Weighted-
			Average
	Shares		Grant-Date
Unvested Options	(in thousands)		Fair Value

Unvested at January 1, 2013	826		$	10.25
Vested	(377	)	$	10.17
Forfeited	(1	)	$	10.33
Unvested at December 31, 2013	448		$	10.31

As of December 31, 2013, total unrecognized compensation cost of $18.1 million was related to unvested stock-based compensation arrangements expected to be awarded under the 2011 Plan and granted under the 1994 Plan. This cost is expected to be recognized over a weighted-average period of 1.5 years. Stock options granted under the 1995 Plan are fully vested and the associated expense is fully recognized as of the date of grant.

The Company also maintains a Stock Bonus Plan whereby it awards shares to employees, who do not otherwise participate in one of the Company’s stock-based incentive plans. The number of shares awarded, as well as the period of service, is determined by the Compensation and Leadership Development Committee of the Board. In 2013, 2012 and 2011, the Company issued, and committed to issue, 11 thousand, 9 thousand and 12 thousand shares, respectively, which resulted in pre-tax compensation charges of $0.7 million, $0.5 million and $0.7 million for the years ended December 31, 2013, 2012 and 2011, respectively. These employees are also awarded cash bonuses, which are included in these charges, to compensate for their income taxes payable as a result of the stock bonuses. Shares have been issued under this Plan in the year following the year in which the employee reached the tenth anniversary of employment with the Company.