Stock-Based Compensation

6 Months Ended

Jun. 30, 2013

Stock Based Compensation [Abstract]

Stock-Based Compensation

9. STOCK-BASED COMPENSATION

Options granted generally vest over four years with the first year vesting on a cliff basis followed by monthly vesting for the remaining three years. Restricted stock awards (“RSA”) and restricted stock units (“RSU”) granted generally vest over three or four years depending on the terms of the grant. Stock-based compensation expense is recognized on a straight-line basis over the applicable vesting period and is recognized in the ‘Cost of sales’ and ‘Selling, general and administrative expenses’ line items in the condensed consolidated statements of income. During the three months ended June 30, 2013 and 2012, $4.0 million and $4.0 million, respectively, of stock-based compensation expense was recorded of which $0.2 million and $0.6 million, respectively, was recorded in ‘Cost of sales’, with the remaining amounts recorded in ‘Selling, general and administrative expenses’ in the condensed consolidated statements of income. During the six months ended June 30, 2013 and 2012, $7.5 million and $6.1 million, respectively, of stock-based compensation expense was recorded of which $0.1 million and $1.0 million, respectively, was recorded in ‘Cost of sales’, with the remaining amounts recorded in ‘Selling, general and administrative expenses’ in the condensed consolidated statements of income.

Stock Options

The following table summarizes the stock option activity for the three and six months ended June 30, 2013 and 2012:

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Options	Options		Weighted Average Exercise Price	Options		Weighted Average Exercise Price	Options		Weighted Average Exercise Price	Options		Weighted Average Exercise Price
Outstanding at March 31, 2013 and 2012, respectively, and December 31, 2012 and 2011, respectively	2,540,677	$	13.24	3,150,144	$	12.07	2,621,686	$	13.03	3,331,031	$	11.91
Granted	77,500		16.52	72,500		16.16	157,000		15.90	113,900		17.17
Exercised	(106,781)		7.82	(179,250)		4.88	(204,090)		7.05	(285,444)		5.36
Forfeited or expired	(141,311)		16.00	(68,781)		17.63	(204,511)		16.81	(184,874)		16.20
Outstanding at June 30	2,370,085	$	13.42	2,974,613	$	12.48	2,370,085	$	13.42	2,974,613	$	12.48

Restricted Stock Awards and Units

From time to time, we grant RSAs and RSUs to our employees. Unvested RSAs have the same rights as those of common shares including voting rights and non-forfeitable dividend rights. However, ownership of unvested RSAs cannot be transferred until they are vested. An unvested RSU is a contractual right to receive a share of common stock only upon its vesting. RSUs have dividend equivalent rights which accrue over the term of the award and are paid if and when the RSUs vest, but they have no voting rights.

During the three months ended June 30, 2013 and 2012, the Board of Directors approved RSU grants of 0.2 million and an immaterial amount of shares, respectively, of which immaterial amounts were granted to certain executives as part of our performance incentive program. During the six months ended June 30, 2013 and 2012, the Board of Directors approved RSU grants of 1.6 million and 0.9 million, respectively, of which 0.7 million and 0.4 million, respectively, were granted to certain executives as part of our performance incentive program. Half of these performance incentive program grants vest ratably on each of the first three anniversaries of the grant date; 25% will vest upon achievement of certain performance metrics; and the remaining 25% will vest one year from the date upon which certain performance metrics are achieved. If actual performance metrics exceed the targeted performance metrics by a predetermined amount, the executives are eligible to receive up to 200% of the performance-based portion of their award. During the three months ended June 30, 2013 and 2012, $3.0 million and $2.1 million, respectively, of stock-based compensation expense related to RSUs were recorded. During the six months ended June 30, 2013 and 2012, $6.0 million and $3.3 million, respectively, of stock-based compensation expense related to RSUs were recorded.

The following table summarizes the RSA activity for the three and six months ended June 30, 2013 and 2012:

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Restricted Stock Awards	Shares		Weighted Average Grant Date Fair Value	Shares		Weighted Average Grant Date Fair Value	Shares		Weighted Average Grant Date Fair Value	Shares		Weighted Average Grant Date Fair Value
Outstanding at March 31, 2013 and 2012, respectively, and December 31, 2012 and 2011, respectively	327,503	$	13.22	518,346	$	12.00	355,509	$	13.37	571,175	$	11.87
Granted	21,590		16.56	18,813		16.48	21,590		16.56	18,813		16.48
Vested	(61,006)		12.68	(144,499)		8.48	(78,212)		14.57	(179,478)		8.71
Forfeited or expired	-		-	(9,250)		12.51	(10,800)		12.51	(27,100)		12.51
Outstanding at June 30	288,087	$	13.32	383,410	$	13.53	288,087	$	13.32	383,410	$	13.53

The following table summarizes the RSU activity for the three and six months ended June 30, 2013 and 2012:

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Restricted Stock Units	Units		Weighted Average Grant Date Fair Value	Units		Weighted Average Grant Date Fair Value	Units		Weighted Average Grant Date Fair Value	Units		Weighted Average Grant Date Fair Value
Outstanding at March 31, 2013 and 2012, respectively, and December 31, 2012 and 2011, respectively	2,449,544	$	17.06	1,576,561	$	21.28	1,414,661	$	20.61	711,980	$	23.43
Granted	157,097		15.88	13,500		16.10	1,563,114		15.04	888,559		19.42
Vested	(92,297)		25.35	(105,241)		24.48	(286,984)		22.53	(105,241)		24.48
Forfeited or expired	(58,330)		16.89	(19,105)		21.82	(234,777)		22.27	(29,583)		21.27
Outstanding at June 30	2,456,014	$	16.72	1,465,715	$	21.00	2,456,014	$	16.72	1,465,715	$	21.00