Stock-Based Compensation

12 Months Ended

Dec. 31, 2012

Stock-Based Compensation

3. Stock-Based Compensation

Our Second Amended and Restated 2000 Stock Option Plan, as amended, or Stock Plan, provides for the issuance of either incentive stock options or non-qualified stock options to our employees, consultants and non-employee directors. Our Stock Plan also authorizes the award of stock appreciation rights, or SARs, in tandem with stock options or separately. The maximum aggregate number of shares of our common stock for which stock options or SARs may be granted is 1,500,000 shares. The exercise price per share may not be less than the fair market value of the common stock on the date of grant. Generally, stock options and SARs vest ratably over a four year period and expire in ten years.

Total compensation cost recognized for Stock Plan transactions, consisting solely of awards of SARs, for the years ended December 31, 2012, 2011 and 2010 was $4.7 million, $5.0 million and $6.0 million, respectively. Tax benefits recognized for the years ended December 31, 2012, 2011 and 2010 related thereto were $1.6 million, $1.7 million and $2.0 million, respectively.

The fair value of SARs granted under the Stock Plan during each of the years ended December 31, 2012, 2011 and 2010 was estimated using the Black Scholes pricing model.

The following are the weighted average assumptions used in estimating the fair value of our SARs:

	Year Ended December 31,
	2012			2011			2010
Expected life of SARs (in years)		6			5			5
Expected volatility		33.45	%		30.37	%		35.99%
Dividend yield		.78	%		.76	%		.70%
Risk free interest rate		.89	%		1.54	%		1.88%

Expected life of SARs is based on historical data as is the expected volatility. The dividend yield is based on the current approved regular dividend rate in effect and the current market price at the time of grant. Risk free interest rates are determined using the U.S. Treasury yield curve at time of grant with a term equal to the expected life of the SARs.

A summary of activity under the Stock Plan as of December 31, 2012 and changes during the year then ended is as follows:

	Number of Awards		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value (In Thousands)
Awards outstanding at January 1, 2012		998,160	$	85.01
Granted		282,200	$	64.33
Exercised		(9,968)	$	51.57
Forfeited		(4,644)	$	68.73
Expired		(36,268)	$	94.14
Awards outstanding at December 31, 2012		1,229,480	$	80.32		7.0	$	3,515
Awards exercisable at December 31, 2012		810,457	$	86.86		6.0	$	2,141

The weighted-average grant date fair values per share of awards granted during the years ended December 31, 2012, 2011 and 2010 were $19.01, $18.17 and $23.62, respectively. The total intrinsic value of awards exercised during the years ended December 31, 2012, 2011 and 2010 was $147,000, $28,000 and $8,000, respectively. The total fair value of awards vested during the years ended December 31, 2012, 2011 and 2010 was $5.2 million, $5.4 million and $6.6 million, respectively. As of December 31, 2012 there was $6.3 million of total unrecognized compensation cost related to nonvested stock awards granted under the Stock Plan which we expect to recognize over a weighted average period of 2.6 years.