Stock compensation plans

12 Months Ended

Dec. 31, 2012

Stock compensation plans

Note 13 — Stock compensation plans

The Company has two stock-based compensation plans under which equity-based awards may be made. The Company’s 2000 Stock Compensation Plan (the “2000 plan”) provides for the granting of incentive and non-qualified stock options and restricted stock units to directors, officers and key employees. Under the 2000 plan, the Company is authorized to issue up to 4 million shares of common stock, but no more than 800,000 of those shares may be issued as restricted stock. Options granted under the 2000 plan have an exercise price equal to the average of the high and low sales prices of the Company’s common stock on the date of the grant, rounded to the nearest $0.25. Generally, options granted under the 2000 plan are exercisable three to five years after the date of the grant and expire no more than ten years from the grant date. Outstanding restricted stock units generally vest in one to three years. In 2012, the Company granted incentive and non-qualified options to purchase 32,076 shares of common stock and granted restricted stock units representing 9,960 shares of common stock under the 2000 plan. The unrecognized compensation expense for these awards as of the grant date was $1.0 million, which will be recognized over the vesting period of the awards. As of December 31, 2012, 789,538 shares were available for future grants under the 2000 plan.

The Company’s 2008 Stock Incentive Plan (the “2008 plan”) provides for the granting of various types of equity-based awards to directors, officers and key employees. These awards include incentive and non-qualified stock options, stock appreciation rights, stock awards and other stock-based awards. Under the 2008 plan, the Company is authorized to issue up to 2.5 million shares of common stock, but grants of awards other than stock options and stock appreciation rights may not exceed 875,000 shares. Options granted under the 2008 plan have an exercise price equal to the closing price of the Company’s common stock on the date of grant. In 2012, the Company granted incentive and non-qualified options to purchase 399,591 shares of common stock and granted restricted stock units representing 168,730 shares of common stock under the 2008 plan. The unrecognized compensation expense for these awards as of the grant date was $14.3 million, which will be recognized over the vesting period of the awards. As of December 31, 2012, 1,252,050 shares were available for future grants under the 2008 plan.

The fair value for options granted in 2012, 2011 and 2010 was estimated at the date of grant using a multiple point Black-Scholes option pricing model. The following weighted-average assumptions were used:

	2012			2011			2010
Risk-free interest rate		0.81	%		1.92	%		2.12	%
Expected life of option		4.85 yrs.			4.70 yrs.			4.66 yrs.
Expected dividend yield		2.28	%		2.34	%		2.22	%
Expected volatility		28.46	%		26.82	%		26.42	%

The fair value for non-vested shares granted in 2012, 2011 and 2010 was estimated at the date of grant based on the market price for the underlying stock on the grant date discounted for the risk free interest rate and the present value of expected dividends over the vesting period. The following weighted-average assumptions were used:

	2012			2011			2010
Risk-free interest rate		0.37	%		1.04	%		1.25	%
Expected dividend yield		2.24	%		2.34	%		2.24	%

The Company applied a simplified method to establish the beginning balance of the additional paid-in capital pool (“APIC Pool”) related to the tax effects of employee stock-based compensation and to determine the subsequent impact on the APIC Pool and consolidated statements of cash flows of the tax effects of employee stock-based compensation awards that are outstanding.

The following table summarizes the option activity during 2012:

	Shares Subject to Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life In Years		Aggregate Intrinsic Value
								(Dollars in thousands)
Outstanding, beginning of the year		1,132,546		$	57.17
Granted		431,667			59.85
Exercised		(204,082	)		51.66
Forfeited or expired		(275,938	)		60.50
Outstanding, end of the year		1,084,193		$	58.43		7.0	$	14,037
Exercisable, end of the year		558,768		$	57.53		5.4	$	7,772

The weighted average grant date fair value was $11.78, $11.45 and $12.29 for options granted during 2012, 2011 and 2010, respectively. The total intrinsic value of options exercised was $2.7 million, $6.9 million and $2.3 million during 2012, 2011 and 2010, respectively.

The Company recorded $2.9 million of expense related to the portion of the shares underlying options that vested during 2012, which is included in selling, general and administrative expenses.

The following table summarizes the non-vested restricted stock unit activity during 2012:

	Number of Non-Vested Shares			Weighted Average Grant- Date Fair Value		Weighted Average Remaining Contractual Life  In Years		Aggregate Intrinsic Value
								(Dollars in thousands)
Outstanding, beginning of the year		334,459		$	56.60
Granted		178,690			56.95
Vested		(78,753	)		45.54
Forfeited		(69,608	)		54.92
Outstanding, end of the year		364,788		$	55.77		1.3	$	26,013

The weighted average grant-date fair value for non-vested restricted stock units granted during 2012, 2011 and 2010 was $56.95, $54.33 and $57.09, respectively.

The Company recorded $5.7 million of expense related to the portion of the restricted stock units that vested during 2012, which is included in selling, general and administrative expenses.