Note 8—Stock Plans

The 2008 Management Equity Incentive Plan provides for various forms of stock-based compensation for eligible key employees through May 2018. Management stock-based compensation includes stock options, restricted stock and performance stock units. The 2008 Non-Employee Directors' Equity Incentive Plan provides for grants of stock options and restricted stock to non-employee directors through May 2018. Stock options are granted at market value option prices and expire after ten years. Stock options are exercisable beginning three years after the grant date. Restricted stock is granted without payment to the company and generally vests three years after the grant date. Unvested stock options, restricted stock and performance stock units are forfeited if the grantee's employment with the company terminates for any reason other than retirement, death or disability. Certain restricted stock for management retention vests in three equal tranches four, five and six years after the grant date. Unvested restricted stock for management retention is forfeited if the grantee's employment with the company terminates for any reason other than death or disability. Restricted stock and performance stock units are valued at the market value of the stock on the grant date. The final number of shares to be issued for performance stock units may range from zero to 200% of the target award based on achieving targeted performance conditions over a three year performance period. We issue Stock Compensation Trust shares or new shares for stock option exercises and grants of restricted stock and performance stock. As of December 31, 2011, there were 355,002 and 236,489 shares, respectively, reserved for future grants under the management and non-employee directors' equity incentive plans.

Stock-based compensation expense was as follows:


(In thousands)	2011		2010		2009
Restricted stock	$	4,370	$	4,063	$	3,027
Stock options		2,343		2,748		2,465
Performance stock		1,019		524		368

Total compensation expense before income taxes		7,732		7,335		5,860
Income tax benefit		2,825		2,653		2,084

Total compensation expense, net of income tax benefit		4,907		4,682		3,776

We did not capitalize any stock-based compensation expense in 2011, 2010, or 2009.

Stock option expense is based on the fair value of stock option grants estimated on the grant dates using the Black-Scholes option pricing model and the following weighted average assumptions for options granted in 2011, 2010 and 2009.


	2011			2010			2009
Fair value per option	$	9.94		$	7.21		$	5.80
Risk-free interest rate		2.6	%		3.0	%		2.2	%
Expected dividend yield		3.6	%		3.9	%		3.0	%
Expected volatility		40	%		40	%		42	%
Expected life (years)		6.1			6.1			6.1

The risk-free interest rate is based on the U.S. Treasury Constant Maturity rates as of the grant date converted into an implied spot rate yield curve. Expected dividend yield is based on the most recent annualized dividend divided by the one year average closing share price. Expected volatility is based on the ten year historical volatility using daily stock prices. Expected life is based on historical stock option exercise data.

A summary of option activity follows:


	Shares			Weighted Average Exercise Price		Exercisable at Year-end
Outstanding January 1, 2009		1,706,439		$	26.65		1,229,907
Granted		438,110			18.17
Exercised		(25,566	)		10.00
Forfeited		(33,908	)		30.16

Outstanding December 31, 2009		2,085,075			25.01		1,323,549
Granted		323,978			25.06
Exercised		(650,565	)		12.00
Expired		(9,485	)		46.73

Outstanding December 31, 2010		1,749,003			29.74		791,759
Granted		166,247			34.09
Exercised		(94,115	)		13.99
Expired		(2,495	)		44.08

Outstanding December 31, 2011		1,818,640			30.94		907,598

For various exercise price ranges, characteristics of outstanding and exercisable stock options at December 31, 2011 were as follows:


	Stock Options Outstanding
	Shares		Weighted-Average
Range of Exercise Prices	Shares		Exercise Price		Remaining Life
$10.65 – $21.71		486,670	$	17.23	6.4 Years
$24.63 – $37.33		604,371		27.58	7.3
$40.08 – $50.25		727,599		42.89	4.2

$10.65 – $50.25		1,818,640		30.94	5.8


	Stock Options Exercisable
	Shares		Weighted-Average
Range of Exercise Prices	Shares		Exercise Price		Remaining Life
$10.65 – $13.57		65,853	$	11.11		1.1 Years
$25.07 – $28.06		114,146		25.27		2.2
$40.08 – $50.25		727,599		42.89		4.2

$10.65 – $50.25		907,598		38.37		3.7

Cash received from the exercise of stock options was $1.3 million, $7.8 million and $0.3 million for the years ended December 31, 2011, 2010 and 2009, respectively. The tax benefit we realized from these exercises was $0.7 million, $4.3 million and $0.1 million for the years ended December 31, 2011, 2010 and 2009, respectively.

The aggregate intrinsic value of stock options exercisable at December 31, 2011 was zero because a significant number of the options were out-of-the money. The aggregate intrinsic value of all stock options outstanding at December 31, 2011 was $4.0 million.

A summary of restricted stock activity follows:


	Shares			Weighted Average Grant Date Fair Value
Unvested at January 1, 2009		189,062		$	42.56
Granted		197,464			18.25
Vested		(39,319	)		40.57
Forfeited		(9,001	)		27.64

Unvested at December 31, 2009		338,206			28.99
Granted		185,216			25.38
Vested		(46,125	)		39.88
Forfeited		(3,660	)		23.93

Unvested at December 31, 2010		473,637			26.56
Granted		125,603			33.61
Vested		(76,505	)		44.39
Forfeited		(10,481	)		24.87

Unvested at December 31, 2011		512,254			25.66

A summary of performance stock unit activity follows:


	Shares			Weighted Average Grant Date Fair Value
Granted		64,780		$	17.83
Forfeited		(2,806	)		17.83

Unvested at December 31, 2009		61,974			17.83
Granted		41,984			24.63
Performance adjustments		(18,329	)		20.75

Unvested at December 31, 2010		85,629			20.53
Granted		48,820			33.09
Performance adjustments		(7,506	)		21.14
Forfeited		(1,500	)		30.53

Unvested at December 31, 2011		125,443			25.27

During the years ended December 31, 2011, 2010 and 2009, the total intrinsic value of stock options exercised (the difference between the market price on the date of exercise and the option price paid to exercise the option) was $1.8 million, $10.9 million and $0.4 million, respectively. The fair values of restricted stock vested during the years ended December 31, 2011, 2010, and 2009 were $3.4 million, $1.2 million and $0.7 million, respectively.

On December 31, 2011, there was $6.3 million of unrecognized stock-based compensation expense. The weighted average period over which this expense is expected to be recognized was approximately one year.