Stock Incentive Plans

6 Months Ended

Jun. 30, 2011

Stock Incentive Plans

Stock Incentive Plans

Note 11 — Stock Incentive Plans

The Company’s 2007 (adopted in 2006) Stock Incentive Plan provides for the issuance of up to 6,000,000 shares of common stock to certain employees.  The plan expires 10 years after its inception, at which point no further stock options or performance units (commonly referred to as stock awards) may be granted.  As of June 30, 2011 and December 31, 2010, 4,381,014 and 4,541,522 shares were available for future grants under the plan.  Shares forfeited by an employee become available for future grants.

Stock Options

Stock options have not been granted since 2003, and all stock options outstanding at June 30, 2011 are fully vested.  Stock options were granted at prices equal to fair market value on the date of the grant and were exercisable, upon vesting, over varying periods up to ten years from the date of grant.  Stock options for directors vested immediately, while options for Company employees generally vested over three years (one-third per year).  Details of the exercisable stock options are presented in the table below:

	Aggregate				Per Share	Weighted-Average
	Intrinsic Value		Number of		Option Price	Exercise Price
	(in thousands)		Options		Range	Per Option
Exercisable at December 31, 2010	$	1,991	250,946		$22.04 - $26.95	$	24.72
Exercised			(73,448	)	$22.04 - $24.59	$	24.40
Exercisable at June 30, 2011	$	1,584	177,498		$24.59 - $26.95	$	24.86

The weighted-average remaining contractual life of the outstanding and exercisable options at June 30, 2011 was 1.4 years.

Stock Awards

Distribution of stock awards is made in the form of shares of the Company’s common stock on a one for one basis.  Distribution of the shares will normally be made not less than three years, nor more than six years, from the date of the stock award grant.  Stock awards for directors vest immediately.  All other stock awards granted under the plans are subject to restrictions as to continuous employment, except in the case of death, permanent disability, or retirement.  Approximately 47 percent of the stock awards granted in 2011 and 18 percent of stock awards granted in 2010 are also subject to the degree to which specified total shareholder return conditions are satisfied.  In addition, cash payments are made during the vesting period on the outstanding stock awards granted prior to January 1, 2010, equal to the dividend on the Company’s common stock.  Cash payments equal to dividends on awards made on or after January 1, 2010, will be distributed at the same time as the shares of common stock to which they relate.  The cost of the award is based on the fair market value of the stock on the date of grant and is charged to income over the requisite service period.  Total compensation expense related to stock incentive plans was $8.7 million and $9.3 million as of June 30, 2011 and 2010, respectively.

As of June 30, 2011, the unrecorded compensation cost for stock awards was $41.2 million and will be recognized over the remaining vesting period for each grant which ranges between December 31, 2011 and December 31, 2015.  The remaining weighted-average life of all stock awards outstanding as of June 30, 2011, was 2.5 years.  These awards are considered equity-based awards and are therefore classified as a component of additional paid-in capital.

The following table summarizes all stock awards unit activity from December 31, 2010 to June 30, 2011:

	Aggregate
	Intrinsic Value		Number of
	(in thousands)		Stock Awards
Outstanding units granted at December 31, 2010	$	103,053	3,158,335
Units Granted			285,791
Units Paid (in shares)			(307,149	)
Units Canceled			(148,793	)
Outstanding value and units granted at June 30, 2011	$	100,941	2,988,184