Note 15 - Stock-Based Compensation

The Company’s incentive compensation plans allow the Company to grant awards to key employees in the form of stock options, stock awards, RSUs, stock appreciation rights, PSUs, dividend equivalents and other awards. Compensation related to these awards is determined based on the fair value on the date of grant and is amortized to expense over the vesting period. For RSUs and PSUs, the Company recognizes compensation expense based on the earlier of the vesting date or the date when the employee becomes eligible to retire. If awards can be settled in cash, these awards are recorded as liabilities and marked to market.

The following table discloses the amount of stock-based compensation expense:


	Stock Based Compensation
	2010		2011		2012
Stock options	$	1,414	$	2,553	$	3,388
Stock awards		—		—		67
Restricted stock units		745		1,214		1,169
Performance stock units		4,686		366		3,412

Total stock-based compensation	$	6,845	$	4,133	$	8,036

Stock Options

The 2001, 2006 and 2010 incentive compensation plans provide for granting options to key employees to purchase common shares at prices not less than market at the date of grant. Options under these plans may have terms of up to ten years becoming exercisable in whole or in consecutive installments, cumulative or otherwise. The plans allow the granting of nonqualified stock options which are not intended to qualify for the tax treatment applicable to incentive stock options under provisions of the Internal Revenue Code.

The Company’s 2002 nonqualified stock option plan provides for granting options to directors who are not current or former employees of the Company to purchase common shares at prices not less than market at the date of grant. Options granted under this plan have a term of ten years and become exercisable one year after the date of grant.

In April 2009, executives participating in the 2009 – 2011 Long-Term Incentive Plan were granted 1,155,000 stock options which vested one third each year through April 2012. This plan does not contain any performance-based criteria. In March 2010, executives participating in the 2010 – 2012 Long-Term Incentive Plan were granted 303,120 stock options which will vest one third each year through March 2013. During 2011, executives participating in the 2011 – 2013 Long-Term Incentive Plan were granted 311,670 stock options, which will vest one-third each year through 2014. In February 2012, executives participating in the 2012 – 2014 Long-Term Incentive Plan were granted 589,934 stock options which will vest one-third each year through February 2015. The fair value of these options was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions:


	2010			2011			2012
Risk-free interest rate		2.8	%		2.7	%		1.2	%
Dividend yield		2.2	%		1.8	%		2.7	%
Expected volatility of the Company’s common stock		0.604			0.615			0.644
Expected life in years		6.0			6.0			6.0

The weighted average fair value of options granted in 2010, 2011 and 2012 was $9.01, $11.57 and $7.33 respectively. Compensation expense for these options is recorded over the vesting period.

Summarized information for the plans follows:


	Number of Shares			Weighted Average Exercise Price (per share)		Aggregate Intrinsic Value (thousands)
Outstanding at January 1, 2012		1,737,881		$	13.95
Granted		589,934			15.63
Exercised		(798,967	)		20.97
Expired		(32,800	)		17.16
Cancelled		(9,697	)		21.93

Outstanding at December 31, 2012		1,486,351			17.63	$	11,503

Exercisable at December 31, 2012		600,144			17.54		4,693

Available for Grant at December 31, 2012		2,516,117


	Year ended December 31
	2010		2011		2012
Weighted average grant-date fair value of options granted (per share)	$	9.01	$	11.57	$	7.33

Aggregate intrinsic value of options exercised (thousands)	$	5,279	$	3,515	$	10,256

Total fair value of shares vested (thousands)	$	899	$	1,655	$	2,641

The weighted average remaining contractual life of options outstanding at December 31, 2012 is 7.2 years. Approximately 375,270 stock options will become exercisable over the next twelve months.

Segregated disclosure of options outstanding at December 31, 2012 was as follows:


	Range of Exercise Prices
	Less than or equal to $15.63		Greater than $15.63

Options outstanding		745,875		740,476

Weighted average exercise price	$	14.28	$	20.99

Remaining contractual life		8.2		6.2

Options exercisable		158,206		441,938

Weighted average exercise price	$	9.29	$	20.50

At December 31, 2012, the Company had $4,627 of unvested compensation cost related to stock options, and this cost will be recognized as expense over a weighted average period of 21 months.

Restricted Stock Units

Under the 1998, 2001, 2006 and 2010 Incentive Compensation Plans, RSUs may be granted to officers and other key employees. Compensation related to the RSUs is determined based on the fair value of the Company’s stock on the date of grant and is amortized to expense over the vesting period. The RSUs granted in 2011 and 2012 have vesting periods ranging from three to four years. No RSUs were granted in 2010. The Company recognizes compensation expense based on the earlier of the vesting date or the date when the employee becomes eligible to retire. The following table provides details of the nonvested RSUs for 2012:


	Number of Restricted Units			Weighted Average Grant-Date Fair Value (per share)
Nonvested at January 1, 2012		186,805		$	20.70
Granted		6,000			15.54
Vested		(80,347	)		18.61
Cancelled		(5,067	)		18.71
Accrued dividend equivalents		3,480			17.36

Nonvested at December 31, 2012		110,871		$	21.93


	Year ended December 31
	2010		2011		2012
Weighted average grant-date fair value of restricted shares granted (per share)	$	—	$	23.68	$	15.54

Total fair value of shares vested (thousands)	$	5,117	$	811	$	1,495

The number of vested RSUs at December 31, 2011 and 2012 was 103,834 and 96,500, respectively. At December 31, 2012, the Company has $1,738 of unvested compensation cost related to RSUs and this cost will be recognized as expense over a weighted average period of 21 months.

Performance Stock Units

Compensation related to the PSUs is determined based on the fair value of the Company’s stock on the date of grant combined with performance metrics and is amortized to expense over the vesting period. During 2007, executives participating in the Company’s Long-Term Incentive Plan earned 283,254 PSUs based on the Company’s financial performance in 2007. These units vested in February 2010. No PSUs were earned in 2008. During 2009, executives participating in the Company’s Long-Term Incentive Plan earned 545,930 PSUs based on the Company’s financial performance in 2009 and all of these units vested in 2010. During 2010, executives participating in the Company’s Long-Term Incentive Plan earned 244,043 PSUs based on the Company’s financial performance in 2010. Of these units, 183,961 vested in 2010 and 60,082 vested in 2012. No PSUs were earned in 2011. During 2012, executives participating in the Company’s Long-Term Incentive Plan earned 307,813 PSUs based on the Company’s financial performance in 2012. Of these units, 91,190 vested in 2012 and 84,401and 132,222 will vest in 2013 and 2014, respectively. Similar to RSUs, the Company recognizes compensation expense based on the earlier of the vesting date or the date when the employee becomes eligible to retire.

The following table provides details of the nonvested PSUs earned under the Company’s Long-Term Incentive Plan:


	Number of Restricted Units			Weighted Average Grant-Date Fair Value (per share)
Nonvested at January 1, 2012		61,450		$	18.60
Earned		307,813			15.63
Vested		(154,129	)		16.84
Accrued dividend equivalents		1,489			17.74


Nonvested at December 31, 2012		216,623		$	15.63

The weighted average fair value of PSUs granted in 2010, 2011 and 2012 was $18.71, $22.97 and $15.63, respectively.

At December 31, 2012, the Company has $1,743 of unvested compensation cost related to PSUs and this cost will be recognized as expense over a weighted average period of 20 months.

The Company’s RSUs and PSUs are not participating securities. These units will be converted into shares of Company common stock in accordance with the distribution date indicated in the agreements. RSUs earn dividend equivalents from the time of the award until distribution is made in common shares. PSUs earn dividend equivalents from the time the units have been earned based upon Company performance metrics until distribution is made in common shares. Dividend equivalents are only earned subject to vesting of the underlying RSUs or PSUs, accordingly, such units do not represent participating securities.

The Company recognized $3,294, $349 and $2,469 of excess tax benefits as a financing cash inflow for the years ended December 31, 2010, 2011 and 2012, respectively.