Equity- Based Compensation
|12 Months Ended|
Dec. 31, 2011
|Equity-Based Compensation [Abstract]|
NOTE L – EQUITY-BASED COMPENSATION
Equity-based compensation expense for fiscal years 2009, 2010, and 2011 was $8,925, $10,406, and $10,549, respectively. The related tax benefit for these periods was $3,255, $3,992, and $3,852, respectively.
The following table shows the remaining unrecognized compensation expense on a pre-tax basis for all types of unvested equity awards outstanding as of December 31, 2011. This table does not include an estimate for future grants that may be issued.
The cost above is expected to be recognized over a weighted-average period of 2.1 years.
The Company's 2006 Equity Incentive Award Plan (the "2006 Plan") is currently the only plan under which equity awards are issued. This plan allows for the grant of various equity awards, including stock-settled stock appreciation rights, stock options, deferred stock units, and other types of equity-based awards, to the Company's officers, key employees, and non-employee directors.
During the year ended December 31, 2011, the Company's shareholders approved a 5,000 share increase in the number of new shares authorized for issuance under the 2006 Plan. This increase brings the total shares authorized under the 2006 Plan to 10,000. As of December 31, 2011, a total of 5,442 awards had been granted under the 2006 Plan, of which 5,320 were stock-settled stock appreciation rights, 8 were stock options, and 114 were deferred stock units. Also, as of December 31, 2011, a total of 836 awards had been canceled and added back to the number of units available for issuance under the 2006 Plan.
The Company's Compensation Committee has initially determined that awards to be granted to officers and key employees under the 2006 Plan will generally vest 20% each year on the anniversary of the grant date and expire five to five and one-half years from the date of grant. Awards of stock options and stock-settled stock appreciation rights to be granted to non-employee directors will generally vest 25% each quarter, commencing on the last day of the fiscal quarter in which the awards are granted, and will expire five years to five and one-half years from the date of grant. Awards of deferred stock units are full-value shares at the date of grant, vesting over the periods of service, and do not have expiration dates.
The Company uses the Black-Scholes option pricing model to estimate the fair value of its equity awards. The weighted-average fair value of stock-settled stock appreciation rights that were granted in 2009, 2010, and 2011, was $10.30, $17.09, and $12.40, respectively. Following is a table that includes the weighted-average assumptions that the Company used to calculate fair value of equity awards that were granted during the periods indicated. Deferred stock units are full-value shares at the date of grant and have been excluded from the table below.
(1) Expected volatility is a weighted-average of historical volatility and implied volatility of the Company.
(2) Risk-free interest rate is based on the U.S. Treasury yield curve with respect to the expected life of the award.
(3) Expected life is a weighted-average that includes historical settlement data of the Company's equity awards and a hypothetical holding period for outstanding awards.
(4) The Company historically has not paid dividends.
(5) Grant price is the closing price of the Company's common stock on the date of grant.
A summary of the Company's stock option and stock-settled stock appreciation right activity is as follows:
* Aggregate intrinsic value is defined as the difference between the current market value at the reporting date (the closing price of the Company's common stock on the last trading day of the period) and the exercise price of awards that were in-the-money. The closing price of the Company's common stock at January 1, 2011 and December 31, 2011, was $43.45 and $30.37, respectively.
The total intrinsic value of stock options and stock-settled stock appreciation rights exercised was $222 in 2009, $16,977 in 2010, and $925 in 2011.
A summary of the Company's deferred stock unit activity for is as follows:
The total fair value of equity awards that vested during fiscal years 2009, 2010, and 2011 was $10,386, $7,835, and $10,993, respectively. This total fair value includes equity-based awards issued in the form of stock options, stock-settled stock appreciation rights, and deferred stock units.
The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.
Reference 1: http://www.xbrl.org/2003/role/presentationRef