Equity-Based Compensation

9 Months Ended

Sep. 30, 2011

As of September 30, 2011, we had three stock incentive plans under which stock option, performance share or restricted stock unit, or RSU, grants were outstanding, with approximately 451,000 shares authorized for future use under the 2005 Stock Incentive Plan.

The following table details our compensation expense for the quarters and nine months ended September 30:



	Quarter Ended						Nine Months Ended
	September 30,						September 30,
(Dollars in thousands)	2011			2010			2011		2010
Employee equity-based compensation expense:
Performance shares	$	942		$	832		$	2,707	$	2,393
Restricted stock units	155			149			437		451
Total employee equity-based compensation expense	$	1,097		$	981		$	3,144	$	2,844
Related net income tax benefit	$	—		$	—		$	—	$	—

Director deferred compensation expense (income)	$	(373	)	$	(12	)	$	484	$	917

For the nine months ended September 30, 2011 and 2010, there were no realized tax benefits related to the excess of the deductible amount over the compensation cost recognized in the Consolidated Condensed Statements of Cash Flows.

STOCK OPTIONS

The following table summarizes outstanding stock options as of September 30, 2011, and changes during the nine months ended September 30, 2011:



(Dollars in thousands, except exercise prices)	Shares		Weighted Avg. Exercise Price		Aggregate Intrinsic Value
Outstanding at January 1	222,130		$	21.64
Shares exercised	(65,382	)	18.81		$	1,316
Shares canceled or expired	—		—
Outstanding and exercisable at September 30	156,748		22.82		1,363

There were no unvested stock options outstanding during the nine months ended September 30, 2011. The aggregate intrinsic value of stock options exercised during the nine months ended September 30, 2010 was $1.2 million.

The following table summarizes outstanding stock options as of September 30, 2011:



	Options Outstanding and Exercisable
Range of Exercise Prices	Outstanding	Weighted Avg. Remaining Contractual Life		Weighted Avg. Exercise Price
$13.8594 to $16.6452	47,908	0.93	years	$	14.89
$19.2569	42,995	2.17	years	19.26
$30.9204	65,845	3.17	years	30.92
$13.8594 to $30.9204	156,748	2.21	years	22.82

Cash received from stock option exercises for the nine months ended September 30, 2011 and 2010 was $1.2 million and $1.7 million, respectively. No actual tax benefits were realized for tax deductions from option exercises for the nine months ended September 30, 2011 and 2010.

PERFORMANCE SHARES

The following table presents the key inputs used in the Monte Carlo simulation method to calculate the fair value of the performance share awards in 2011 and 2010, and the resulting fair values:



	2011			2010
Shares granted	77,767			81,162
Stock price as of valuation date	$	39.10		$	31.88
Risk-free rate	1.26		%	1.29		%
Fair value of a performance share	$	55.84		$	45.30

The following table summarizes outstanding performance share awards as of September 30, 2011, and changes during the nine months ended September 30, 2011:



(Dollars in thousands, except grant date fair value)	Shares		Weighted Avg. Grant Date Fair Value		Aggregate Intrinsic Value
Unvested shares outstanding at January 1	184,601		$	38.45
Granted	77,767		55.84
Forfeited	(3,814	)	42.77
Unvested shares outstanding at September 30	258,554		43.62		$	7,923

As of September 30, 2011, there was $5.0 million of unrecognized compensation cost related to non-vested performance share awards, which is expected to be recognized over a weighted average period of 1.2 years.

RESTRICTED STOCK UNITS

The following table summarizes outstanding RSU awards as of September 30, 2011, and changes during the nine months ended September 30, 2011:



(Dollars in thousands, except grant date fair value)	Shares		Weighted Avg. Grant Date Fair Value		Aggregate Intrinsic Value
Unvested shares outstanding at January 1	41,715		$	29.37
Granted	18,053		38.57
Vested	(1,404	)	39.17
Forfeited	(1,619	)	32.00
Unvested shares outstanding at September 30	56,745		31.98		$	1,789

For RSU awards granted during the period, the fair value of each share was determined on the date of grant using the grant date market price. The total fair value of RSU awards vested during the nine months ended September 30, 2011 was less than $0.1 million.

As of September 30, 2011, there was $0.8 million of total unrecognized compensation cost related to non-vested RSU awards, which is expected to be recognized over a weighted average period of 1.3 years.

- Definition

Tabular disclosure of components of a stock option or other award plan under which equity-based compensation is awarded to employees, typically comprised of the amount of unearned compensation (deferred compensation cost), compensation expense, and changes in the quantity and fair value of the shares (or other type of equity) granted, exercised, forfeited, and issued and outstanding pertaining to that plan. Disclosure may also include nature and general terms of such arrangements that existed during the period and potential effects of those arrangements on shareholders, effect of compensation cost arising from equity-based payment arrangements on the income statement, method of estimating the fair value of the goods or services received, or the fair value of the equity instruments granted, during the period, cash flow effects resulting from equity-based payment arrangements and, for registrants that accelerate vesting of out of the money share options, reasons for the decision to accelerate.

+ References+ Details