Note 6 - Stockholders' Equity and Equity Compensation

9 Months Ended

Sep. 30, 2012

Shareholders' Equity and Share-based Payments [Text Block]

6.     STOCKHOLDERS’ EQUITY AND EQUITY COMPENSATION

Share Repurchase Plan

During 2011, the Company’s Board of Directors authorized the repurchase of up to $10.0 million of the Company’s common stock. The authorization allowed the Company to purchase up to $5.0 million during 2011 and an additional $5.0 million during 2012. These amounts constituted the maximum open market repurchases currently authorized in any calendar year under the terms of the Credit Facility.

In addition to the open market repurchases, the Company also is authorized to purchase up to $5.0 million of the Company’s common stock in each calendar year in connection with the Company’s equity compensation programs for employees and directors. The participants in the Company’s equity plans may surrender shares of previously issued common stock in satisfaction of tax obligations arising from the vesting of restricted stock awards under such plans and in connection with the exercise of stock option awards. The deemed price paid is the closing price of the Company’s common stock on the Nasdaq Global Select Market on the date that the restricted stock vests or the shares of the Company’s common stock are surrendered in exchange for stock option exercises.

During the first nine months of 2012, the Company acquired 310,035 shares of the Company’s common stock for $5.0 million ($16.13 average price per share) through the open market repurchase program and 64,122 shares of the Company’s common stock for $1.2 million ($18.10 average price per share) in connection with the satisfaction of tax obligations in connection with the vesting of restricted stock and distribution of deferred stock units. In addition, the Company issued 2,769 common shares in exchange for 13,500 stock options (via a stock swap). Once repurchased, the Company immediately retired all such shares.

Equity-Based Compensation Plans

At September 30, 2012, the Company had two active equity-based compensation plans under which awards may be made, including stock appreciation rights, restricted shares of common stock, performance awards, stock options and stock units. The Company’s 2009 Employee Equity Incentive Plan (the “2009 Employee Plan”) has 2,500,000 shares of the Company’s common stock registered for issuance and, at September 30, 2012, 826,188 shares of common stock were available for issuance. In order to determine shares available for issuance, the Company assumed the issuance of shares pursuant to outstanding restricted stock unit awards were issued at the target level. The Company’s 2011 Non-Employee Director Equity Incentive Plan (“2011 Director Plan”) has 250,000 shares of the Company’s common stock registered for issuance, and at September 30, 2012, 208,266 shares of common stock were available for issuance.

Stock Awards

Stock awards, which include shares of restricted stock and restricted stock units, are awarded from time to time to executive officers and certain key employees of the Company. Stock award compensation is recorded based on the award date fair value and charged to expense ratably through the requisite service period. The forfeiture of unvested restricted stock awards and units causes the reversal of all previous expense recorded as a reduction of current period expense.

A summary of stock award activity during the nine-month period ended September 30, 2012 follows:

	Stock Awards			Weighted Average Award Date Fair Value
Outstanding at January 1, 2012		643,117		$	17.44
Restricted shares awarded		266,715			18.08
Restricted stock units awarded		195,187			18.11
Restricted shares distributed		(285,443	)		13.28
Restricted stock units distributed		(14,446	)		13.70
Restricted shares forfeited		(30,599	)		20.32
Restricted stock units forfeited		(65,062	)		18.11
Outstanding at September 30, 2012		709,469		$	19.37

Expense associated with stock awards was $3.0 million and $3.2 million in the nine months ended September 30, 2012 and 2011, respectively. Unrecognized pre-tax expense of $7.2 million related to stock awards is expected to be recognized over the weighted average remaining service period of 1.5 years for awards outstanding at September 30, 2012.

Expense associated with stock awards was $0.8 million and $1.1 million for the quarters ended September 30, 2012 and 2011, respectively.

Deferred Stock Unit Awards

Deferred stock units generally are awarded to directors of the Company and represent the Company’s obligation to transfer one share of the Company’s common stock to the grantee at a future date and generally are fully vested on the date of grant. The expense related to the issuance of deferred stock units is recorded as of the date of the award.

A summary of deferred stock unit activity during the nine-month period ended September 30, 2012 follows:

	Deferred Stock Units			Weighted Average Award Date Fair Value
Outstanding at January 1, 2012		173,916		$	20.12
Awarded		41,734			17.78
Shares distributed		(34,132	)		22.90
Forfeited		–			–
Outstanding at September 30, 2012		181,518		$	19.06

There was no expense associated with awards of deferred stock units in the quarter ended September 30, 2012. Expense associated with awards of deferred stock units in the nine months ended September 30, 2012 and 2011 was $0.7 million.

Stock Options

Stock options on the Company’s common stock are awarded from time to time to executive officers and certain key employees of the Company. Stock options granted generally have a term of seven to ten years and an exercise price equal to the market value of the underlying common stock on the date of grant.

A summary of stock option activity during the nine-month period ended September 30, 2012 follows:

	Shares			Weighted Average Exercise Price
Outstanding at January 1, 2012		1,107,712		$	18.98
Granted		281,696			17.22
Exercised		(26,776	)		13.99
Canceled/Expired		(106,332	)		23.66
Outstanding at September 30, 2012		1,256,300		$	18.29
Exercisable at September 30, 2012		787,082		$	16.92

Expense associated with stock option grants was $0.5 million and $0.4 million in the quarters ended September 30, 2012 and 2011, respectively. In the nine months ended September 30, 2012 and 2011, the Company recorded expense of $1.6 million related to stock option grants. Unrecognized pre-tax expense of $2.8 million related to stock option grants is expected to be recognized over the weighted average remaining contractual term of 1.9 years for awards outstanding at September 30, 2012.

Financial data for stock option exercises for the nine-month periods ended September 30, 2012 and 2011 are summarized in the following table (in millions):

	2012		2011
	(in millions)
Amount collected from stock option exercises	$	0.4	$	2.1
Total intrinsic value of stock option exercises		0.1		1.0
Tax benefit of stock option exercises recorded in additional paid-in-capital	<	0.1	<	0.1
Aggregate intrinsic value of outstanding stock options at September 30, 2012		3.3		–
Aggregate intrinsic value of exercisable stock options at September 30, 2012		3.0		–

The intrinsic value calculations are based on the Company’s closing stock price of $19.16 and $11.58 on September 30, 2012 and 2011, respectively.

The Company uses a binomial option-pricing model for valuation purposes to reflect the features of stock options granted. The fair value of stock options awarded during the nine-month periods ended September 30, 2012 and 2011 were estimated at the date of grant based on the assumptions presented in the table below. Volatility, expected term and dividend yield assumptions were based on the Company’s historical experience. The risk-free rate was based on a U.S. treasury note with a maturity similar to the option grant’s expected term.

	For the Nine Months Ended September 30,
	2012							2011
	Range				Weighted Average			Range					Weighted Average
Weighted average grant-date fair value		8.14	-	8.19	$	8.19				n/a			$	11.61
Volatility		43.0	-	45.2%		45.1	%		47.0	-	50.6	%		50.4	%
Expected term (years)			7.0			7.0				7.0				7.0
Dividend yield			0.0%			0.0	%			0.0%				0.0	%
Risk-free rate		1.0	-	1.5%		1.5	%		2.3	-	3.0	%		2.8	%