Note 10: Share-based compensation plans

Our employee share-based compensation plans consist of our employee stock purchase plan and our stock incentive plan. Effective April 30, 2008, our shareholders approved a new stock incentive plan, simultaneously terminating our previous plan. Under this plan, 4,000 shares of common stock are reserved for issuance, with 1,476 shares remaining available for issuance as of December 31, 2011. Full value awards such as restricted stock, restricted stock units and share-based performance awards reduce the number of shares available for issuance by a factor of 2.29, or if such an award were forfeited or terminated without delivery of the shares, the number of shares that again become eligible for issuance would be multiplied by a factor of 2.29. We currently have non-qualified stock options, restricted stock units and restricted share awards outstanding under our current and previous plans. See the employee share-based compensation policy in Note 1 for our policies regarding the recognition of compensation expense for employee share-based awards.

The following amounts were recognized in our consolidated statements of income for share-based compensation awards:

	2011			2010			2009
Stock options	$	3,633		$	2,967		$	3,213
Restricted shares and restricted stock units		1,799			2,866			3,135
Employee stock purchase plan		301			317			315
Total share-based compensation expense	$	5,733		$	6,150		$	6,663
Income tax benefit	$	(1,930	)	$	(2,123	)	$	(2,375	)

As of December 31, 2011, the total compensation expense for unvested awards not yet recognized in our consolidated statements of income was $5,383, net of the effect of estimated forfeitures. This amount is expected to be recognized over a weighted-average period of 1.7 years.

Non-qualified stock options – All options allow for the purchase of shares of common stock at prices equal to the stock's market value at the date of grant. Options become exercisable beginning one year after the grant date, with one-third vesting each year over three years. Options may be exercised up to seven years following the date of grant. In the case of qualified retirement, death, disability or involuntary termination without cause, options vest immediately and the period over which the options can be exercised is shortened. Employees forfeit unvested options when they voluntarily terminate their employment with the company, and they have up to three months to exercise vested options before they are cancelled. In the case of involuntary termination with cause, the entire unexercised portion of the award is cancelled. All options may vest immediately upon a change of control, as defined in the award agreement. The following weighted-average assumptions were used in the Black-Scholes option pricing model in determining the fair value of stock options granted:

	2011		2010		2009
Risk-free interest rate (%)		2.0		2.2		1.6
Dividend yield (%)		3.9		3.2		3.4
Expected volatility (%)		58.6		54.0		44.2
Weighted-average option life (years)		4.3		4.8		4.6

The risk-free interest rate for periods within the expected option life is based on the U.S. Treasury yield curve in effect at the grant date. Expected volatility is based on the historical volatility of our stock.

Each option is convertible into one share of common stock upon exercise. Information regarding options issued under the current and all previous plans was as follows:

(options in thousands)	Number of options			Weighted- average exercise price per option		Aggregate intrinsic value		Weighted- average remaining contractual term (in years)
Outstanding at December 31, 2008		3,105		$	33.50
Granted		790			9.75
Exercised		(3	)		9.73
Forfeited or expired		(1,051	)		39.68
Outstanding at December 31, 2009		2,841			24.64
Granted		695			18.37
Exercised		(185	)		11.08
Forfeited or expired		(438	)		33.94
Outstanding at December 31, 2010		2,913			22.60
Granted		598			25.56
Exercised		(383	)		16.56
Forfeited or expired		(362	)		28.87
Outstanding at December 31, 2011		2,766			23.26	$	7,519		3.7

Exercisable at December 31, 2009		1,643		$	30.60
Exercisable at December 31, 2010		1,675			27.66
Exercisable at December 31, 2011		1,685			25.18	$	3,378		2.6

The weighted-average grant-date fair value of options granted was $9.37 per option for 2011, $6.86 per option for 2010 and $2.82 per option for 2009. The intrinsic value of a stock award is the amount by which the fair value of the underlying stock exceeds the exercise price of the award. The total intrinsic value of options exercised was $3,452 for 2011, $1,834 for 2010 and $16 for 2009.

Restricted stock units – Certain management employees have the option to receive a portion of their bonus payment in the form of restricted stock units. When employees elect this payment method, we provide an additional matching amount of restricted stock units equal to one-half of the restricted stock units earned under the bonus plan. These awards vest two years from the date of grant. In the case of approved retirement, death, disability or change of control, the units vest immediately. In the case of involuntary termination without cause or voluntary termination, employees receive a cash payment for the units earned under the bonus plan, but forfeit the company-provided matching amount.

In addition to awards granted to employees, non-employee members of our board of directors can elect to receive all or a portion of their fees in the form of restricted stock units. Directors are issued shares in exchange for the units upon the earlier of the tenth anniversary of February 1st of the year following the year in which the non-employee director ceases to serve on the board or such other objectively determinable date pre-elected by the director.

Each restricted stock unit is convertible into one share of common stock upon completion of the vesting period. Information regarding our restricted stock units was as follows:

(units in thousands)	Number of units			Weighted- average grant date fair value per unit		Aggregate intrinsic value		Weighted- average remaining contractual term (in years)
Outstanding at December 31, 2008		145		$	26.65
Granted		17			12.27
Vested		(40	)		24.04
Forfeited		(2	)		25.57
Outstanding at December 31, 2009		120			25.48
Granted		34			19.85
Vested		(68	)		25.57
Outstanding at December 31, 2010		86			23.58
Granted		26			24.70
Vested		(5	)		16.84
Forfeited		(6	)		20.61
Outstanding at December 31, 2011		101			24.26	$	2,305		4.4

Of the awards outstanding as of December 31, 2011, 15 restricted stock units with a value of $338 were liability awards. As of December 31, 2011, these units had a fair value of $22.76 per unit and a weighted-average remaining contractual term of 0.6 year.

The total fair value of restricted stock units that vested was $132 for 2011, $1,090 for 2010 and $589 for 2009. We did not settle any share-based liabilities in cash in 2011, 2010 or 2009.

Restricted shares – Our restricted share awards have a set vesting period at which time the restrictions on the shares lapse. The vesting period on these awards currently ranges from one to three years. The restrictions lapse immediately in the case of qualified retirement, death or disability. In the case of involuntary termination without cause or a change of control, restrictions on a pro-rata portion of the shares lapse based on how much of the vesting period has passed. In the case of voluntary termination of employment or termination with cause, the unvested restricted shares are forfeited.

Information regarding unvested restricted shares was as follows:

	Number of shares			Weighted- average grant date fair value per share
Unvested at December 31, 2008		453		$	25.53
Granted		44			14.81
Vested		(206	)		25.19
Forfeited		(23	)		25.82
Unvested at December 31, 2009		268			24.00
Granted		52			20.00
Vested		(131	)		26.01
Forfeited		(7	)		21.83
Unvested at December 31, 2010		182			21.48
Granted		25			26.58
Vested		(166	)		21.72
Forfeited		(1	)		18.14
Unvested at December 31, 2011		40			23.71

The total fair value of restricted shares that vested was $4,305 for 2011, $2,557 for 2010 and $2,484 for 2009.

Employee stock purchase plan – During 2011, 85 shares were issued under this plan at prices of $20.78 and $20.01. During 2010, 109 shares were issued under this plan at prices of $15.82 and $17.49. During 2009, 174 shares were issued under this plan at prices of $9.80 and $13.30.