Stock-Based Compensation

12 Months Ended

Dec. 31, 2011

Stock-Based Compensation

Stock-Based Compensation

(11)Stock-Based Compensation

Our shareholders approved the 2011 Stock Incentive Plan (the “2011 Plan”) at our Annual Meeting of Shareholders on December 14, 2011. The 2011 Plan replaced the 1973 Non-Qualified Stock Option Plan, as amended, and the 2003 Incentive Stock Plan (the “Prior Plans”).  No new awards will be made under the Prior Plans and outstanding awards will remain outstanding under the Prior Plans until settled.  Under the 2011 Plan, we may grant awards of non-qualified stock options, incentive stock options, restricted stock, stock units, performance shares, performance units and other incentives payable in cash or in shares of our common stock to officers, employees or members of the Board of Directors. We are authorized to grant an aggregate of 1,360,534 shares under the 2011 Plan. As of December 31, 2011, there were 1,544,337 shares representing outstanding awards under the Prior Plans. We may issue new shares or use shares held in treasury to deliver shares to employees for our equity grants or upon exercise of non-qualified stock options.

The following table summarizes the pre-tax stock-based compensation expense included in reported net income (in thousands):

	Years ended December 31,
	2011		2010		2009
Non-qualified stock options	$	963	$	794	$	477
Restricted stock units	650		584		771
Board of Director stock grants	379		279		191
Total	$	1,992	$	1,657	$	1,439

We recognized a deferred income tax benefit of $645,000, $551,000 and $499,000, respectively, during the years ended December 31, 2011, 2010, and 2009 associated with the compensation expense recognized in our consolidated financial statements.  As of December 31, 2011, we had non-qualified stock options and restricted stock units outstanding under these plans as discussed below.

Non-Qualified Stock Options

Non-qualified stock options are granted with an exercise price not less than the fair market value of our common stock at the date of grant, vest over a period up to ten years, and expire at various terms up to ten years from the date of grant.

Summarized information for our non-qualified stock options is as follows:

					Weighted
					average
			Weighted		remaining	Aggregate
	Number of		average		contractual	intrinsic
Stock Options	options		exercise price		term	value
Outstanding at December 31, 2010	1,377,770		$	9.56
Granted	157,500		13.18
Exercised	(46,220	)	10.28
Forfeited	(35,875	)	11.18
Expired	(11,805	)	4.50
Outstanding at December 31, 2011	1,441,370		$	9.93	2.74	$	5,118,000
Stock options expected to vest	1,395,820		$	9.97	2.67	$	4,905,000
Exercisable at December 31, 2011	659,870		$	10.24	1.82	$	2,140,000

Summarized weighted average information for non-qualified stock options granted to certain key personnel during the years ended December 31, 2011 and 2010 is as follows (no stock options were granted during the year ended December 31, 2009):

	2011		2010
Number of options granted	157,500		500,000
Exercise price	$13.18		$7.52
Vesting term	5 years		5 years
Contractual term	6 years		6 years
Grant-date fair value	$4.63		$3.15
Black-Scholes assumptions:
Expected term	4.5 years		4.6 years
Expected stock price volatility	39.3	%	47.6	%
Risk-free interest rate	1.82	%	2.15	%
Expected dividend yield	—	%	—	%

As of December 31, 2011, we had approximately $1,250,000 of unrecognized compensation cost related to the unvested portion of outstanding stock options to be recognized on a straight-line basis over a weighted average remaining service period of approximately 3.2 years.

We received cash for the exercise price associated with stock options exercised of $355,000, $39,000, and $51,000 during the years ended December 31, 2011, 2010 and 2009, respectively. During the year ended December 31, 2010, we settled 24,425 outstanding stock options held by our employees for cash payments totaling $83,000, which represented the fair value of those stock options upon settlement. The total intrinsic value realized by participants on stock options exercised and/or settled was $123,000, $130,000, and $37,000 during the years ended December 31, 2011, 2010 and 2009, respectively. During the years ended December 31, 2011 and 2010, we realized income tax benefits of $131,000 and $129,000, respectively, related to stock option exercises and restricted stock vesting, which are reflected as an increase to additional paid-in capital on the consolidated statements of stockholders’ equity.

Restricted Stock Units

In addition to stock options, we issue restricted stock units to key employees and members of the Board of Directors based on meeting certain service goals. The stock units vest to the recipients at various dates, up to five years, based on fulfilling service requirements. We recognize the value of the market price of the underlying stock on the date of grant to compensation expense over the requisite service period. Upon vesting, the stock units are settled in shares of our common stock. Summarized share information for our restricted stock units is as follows:

			Weighted
	Year ended		average
	December 31,		grant date
	2011		fair value
	(In shares)		(In dollars)
Outstanding and unvested, beginning of period	195,616		$	6.45
Granted	1,500		10.36
Vested	(89,729	)	6.55
Forfeited	(4,420	)	6.25
Outstanding and unvested, end of period	102,967		$	6.43
Restricted stock units expected to vest	95,940		$	6.80

The total intrinsic value realized by participants upon the vesting of restricted stock units was $1,024,000, $1,071,000 and $796,000 during the years ended December 31, 2011, 2010 and 2009, respectively. As of December 31, 2011, we had unrecognized compensation cost of $520,000 related to the unvested portion of our outstanding restricted stock units to be recognized over a weighted average remaining service period of 1.4 years.