Stock-Based Compensation

9 Months Ended

Sep. 30, 2012

Stock-Based Compensation

Note 9. Stock-Based Compensation

The following table summarizes the total stock-based compensation expense included in the Condensed Consolidated Statements of Operations and the related tax benefits for the three and nine-month periods ended September 30, 2012 and 2011. Stock-based compensation expenses are presented in “Selling and administrative expenses” in the Condensed Consolidated Statements of Operations.

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Total stock-based compensation expense	$	33		$	1,058		$	4,164		$	5,320
Income tax benefit		(103	)		(279	)		(1,435	)		(1,511	)

Stock-based compensation expense for the three-month period ended September 30, 2012 includes the reversal of $1.5 million in stock-based compensation expense due to the forfeiture of non-vested stock option awards and restricted share awards in connection with the resignation of the Company’s former President and Chief Executive Officer, Barry L. Pennypacker, on July 13, 2012.

Stock Option Awards

A summary of the Company’s stock option activity for the nine-month period ended September 30, 2012 is presented in the following table (underlying shares in thousands):

	Shares			Outstanding Weighted- Average Exercise Price (per share)		Aggregate Intrinsic Value		Weighted- Average Remaining Contractual Life
Outstanding at December 31, 2011		746		$	43.47
Granted		217		$	70.47
Exercised		(195	)	$	30.85
Forfeited		(95	)	$	66.44
Expired or canceled		(4	)	$	71.85
Outstanding at September 30, 2012		669		$	52.46	$	9,215		4.2 years
Exercisable at September 30, 2012		381		$	40.94	$	8,465		3.0 years

The aggregate intrinsic value was calculated as the difference between the exercise price of the underlying stock options and the quoted closing price of the Company’s common stock at September 30, 2012 multiplied by the number of “in-the-money” stock options. The following table presents certain other information about the Company’s stock options:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Weighted-average estimated grant-date fair value of employee stock options granted (per share)	$	16.08			$	25.38
Total pre-tax intrinsic value of stock options exercised	$	3,871	$	1,306	$	6,360	$	8,741
Pre-tax unrecognized compensation expense, net of estimated forfeitures as of September 30, 2012					$	4,073
Weighted-average period (in years) to be recognized as expense						2.0

Valuation Assumptions

The fair value of each stock option grant under the Company’s Amended and Restated Long-Term Incentive Plan was estimated on the date of grant using the Black-Scholes option-pricing model. The weighted-average assumptions used for the periods indicated are noted in the table below:

	Three Months  Ended September 30,						Nine Months  Ended September 30,
	2012			2011			2012			2011
Assumptions:
Risk-free interest rate		0.5	%		1.3	%		0.7	%		1.9	%
Dividend yield		0.4	%		0.2	%		0.3	%		0.3	%
Volatility factor		40			45			46			44
Expected life (in years)		3.5			3.8			4.0			4.3

Restricted Share Awards

A summary of the Company’s restricted share award activity for the nine-month period ended September 30, 2012 is presented in the following table (underlying shares in thousands):

	Shares			Weighted- Average  Grant- Date Fair Value (per share)
Nonvested at December 31, 2011		148		$	48.59
Granted		88		$	66.59
Vested		(59	)	$	26.74
Forfeited		(62	)	$	65.02
Nonvested at September 30, 2012		115		$	64.58

The restricted shares granted in the nine-month period ended September 30, 2012 were valued at the market close price of the Company’s common stock on the date of grant. The following table presents certain other information about the Company’s restricted share awards:

	Nine Months  Ended September 30,
	2012		2011
Total fair value of awards vested during the period	$	3,826	$	3,828
Pre-tax unrecognized compensation expense, net of estimated forfeitures as of September 30, 2012	$	3,845
Weighted-average period (in years) to be recognized as expense		1.8