Stock Option Plans

12 Months Ended

Dec. 31, 2011

Stock Option Plans [Abstract]

Stock Compensation Plans

(11) Stock Option Plans

The Company currently has two stock compensation plans. The 1996 Nonemployee Director Stock Option Plan and the 2000 Incentive Stock Compensation Plan provide for the granting of stock options to officers, employees and non-employee directors at an exercise price equal to the fair market value of the stock at the date of grant. Unrestricted options granted to employees vest over two to four years and are exercisable up to ten years from the grant date. Upon retirement, any unvested options become exercisable immediately. Options granted to directors vest at the grant date and are exercisable up to ten years from the grant date.  The 2000 Incentive Stock Compensation Plan also provides for other forms of stock-based compensation such as restricted stock.  The Company granted 57,300 shares of restricted stock to employees which vest over a three year period and had a fair value of $57.40 on date of issuance.  As of December 31, 2011, there was $2.9 million of total unrecognized compensation expense related to restricted stock.  The cost is expected to be recognized over a weighted-average period of 2.7 years. 

The following table is a summary of the stock-based compensation expense recognized for the years ended December 31, 2011, 2010 and 2009:

(Thousands of dollars)	2011			2010			2009
Stock-based compensation expense	$	5,310		$	4,627		$	2,943
Tax benefit		(1,964	)		(1,712	)		(1,089	)
Stock-based compensation expense, net of tax	$	3,346		$	2,915		$	1,854

The fair value of each option grant during the years ended December 31, 2011, 2010 and 2009 was estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions:

	2011			2010			2009
Expected dividend yield		0.60% - .80	%		0.94% - 1.60	%		0.87% - 1.40	%
Expected stock price volatility		48.10% - 57.90	%		51.20% - 57.80	%		23.40% - 28.15	%
Risk free interest rate		0.28% - 2.39	%		0.53% - 2.96	%		0.55% - 1.37	%
Expected life of options	3 - 4 years			2 - 6 years			3 - 7 years
Weighted-average fair value per share at grant date	$	26.29		$	17.05		$	10.13

The expected life of options was determined based on the exercise history of employees and directors since the inception of the plans. The expected volatility is based upon the historical weekly and daily stock price for the prior number of year's equivalent to the expected life of the stock option. The expected dividend yield was based on the dividend yield of the Company's common stock at the date of the grant. The risk free interest rate was based upon the yield of U.S. Treasuries which terms were equivalent to the expected life of the stock option.

A summary of stock option activity under the plans during the year ended December 31, 2011, is presented below:

					Weighted-
				Weighted-	Average		Aggregate
				Average	Remaining		Intrinsic
				Exercise	Contractual		Value
Options	Shares			Price	Term		($000's)
Outstanding at January 1, 2011	1,321,637		$	33.26
Granted	434,948			62.69
Exercised	(188,649	)		27.37
Forfeited or expired	(63,625	)		39.36
Outstanding at December 31, 2011	1,504,311		$	42.26		7.9	$	38,733
Exercisable at December 31, 2011	666,613		$	34.53		6.8	$	22,419

As of December 31, 2011, there was $12.7 million of total unrecognized compensation expense related to non-vested stock options. That cost is expected to be recognized over a weighted-average period of 2.3 years.  The intrinsic value of stock options exercised in 2011, 2010 and 2009 was $9.2 million, $11.4 million and $1.0 million, respectively.