5.	Stock-Based Compensation

In October 1999, the Company adopted a long-term equity incentive plan, which provides for grants of stock options, stock appreciation rights, restricted stock and performance awards to directors, officers and employees of PCA, as well as others who engage in services for PCA. Option awards granted to directors, officers and employees have contractual lives of seven or ten years. Options granted to officers and employees vest ratably over a three-year period, and options granted to directors vest immediately. Restricted stock awards granted to officers and employees generally vest at the end of a four-year period, and restricted stock awards granted to directors vest immediately. The plan, which will terminate on October 19, 2014, provides for the issuance of up to 8,550,000 shares of common stock over the life of the plan. As of June 30, 2011, options and restricted stock of 7,660,562 shares have been granted, net of forfeitures. Forfeitures are added back to the pool of shares of common stock available to be granted at a future date.

Compensation expense for both stock options, which were fully vested at June 30, 2010, and restricted stock recognized in the condensed consolidated statements of income for the three- and six-month periods ended June 30, 2011 and 2010 was as follows:


	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
(In thousands)
Stock options	$	—		$	64		$	—		$	221
Restricted stock		2,954			2,488			4,704			3,567

Impact on income before income taxes		2,954			2,552			4,704			3,788
Income tax benefit		(1,149	)		(994	)		(1,830	)		(1,475	)

Impact on net income	$	1,805		$	1,558		$	2,874		$	2,313

The Company uses the Black-Scholes-Merton option-pricing model to estimate the fair value of each option grant as of the date of grant. Expected volatilities are based on historical volatility of the Company's common stock. The expected life of the option is estimated using historical data pertaining to option exercises and employee terminations. Separate groups of employees that have similar historical exercise behavior are considered separately for estimating the expected life. The risk-free interest rate is based on U.S. Treasury yields in effect at the time of grant. The fair value of restricted stock is determined based on the closing price of the Company's common stock on the grant date. There were no option grants during the first six months of 2011.

A summary of the Company's stock option activity and related information follows:


	Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (years)		Aggregate Intrinsic Value
								(In thousands)
Outstanding at December 31, 2010		1,568,384		$	21.38
Exercised		(310,182	)		20.42

Outstanding and exercisable at June 30, 2011		1,258,202		$	21.61		2.0	$	8,024

The total intrinsic value of options exercised during the three months ended June 30, 2011 and 2010 was $1.2 million and $0.5 million, respectively, and during the six months ended June 30, 2011 and 2010 was $2.6 million and $1.3 million, respectively. As of June 30, 2011, there is no unrecognized compensation cost related to stock option awards granted under the Company's equity incentive plan as all outstanding awards have vested.

A summary of the Company's restricted stock activity follows:


	2011						2010
	Shares			Fair Market Value at Date of Grant			Shares			Fair Market Value at Date of Grant
(Dollars in thousands)
Restricted stock at January 1		1,478,000		$	30,600			1,235,505		$	24,718
Granted		574,496			15,975			448,440			9,933
Vested		(214,261	)		(5,498	)		(315,640	)		(6,509	)
Cancellations		(3,465	)		(72	)		(9,440	)		(182	)

Restricted stock at June 30		1,834,770		$	41,005			1,358,865		$	27,960

The Company generally recognizes compensation expense associated with restricted stock awards ratably over their vesting periods. As PCA's Board of Directors has the ability to accelerate vesting of restricted stock upon an employee's retirement, the Company accelerates the recognition of compensation expense for certain employees approaching normal retirement age. As of June 30, 2011, there was $26.6 million of total unrecognized compensation costs related to the above restricted stock awards. The Company expects to recognize the cost of these stock awards over a weighted-average period of 3.0 years.