Quarterly report pursuant to Section 13 or 15(d)

Stock-Based Compensation

v2.3.0.15
Stock-Based Compensation
 9 Months Ended
Sep. 30, 2011
Stock-Based Compensation [Abstract]  
Stock-Based Compensation

 

NOTE 6 – STOCK-BASED COMPENSATION

1997 Stock Incentive Plan

The Company's 1997 Stock Incentive Plan (the "Plan") allows for grants of incentive stock options, non-statutory stock options, restricted stock awards, restricted stock units and other stock-based awards. The majority of all stock option and restricted stock unit grants outstanding under the 1997 Stock Incentive Plan were granted in the first quarter of each fiscal year.

The following table summarizes the Company's total stock-based compensation expense (in thousands):

 

     Three Months Ended
September 30,		      Nine Months Ended
September 30,		  
     2011      2010      2011      2010  

Stock options

    $ 906       $ 826       $ 2,633       $ 2,477   

Restricted stock units

      1,145         906         3,222         2,527   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total

    $ 2,051       $ 1,732       $ 5,855       $ 5,004   
  

 

 

     

 

 

     

 

 

     

 

 

  

Stock Options

The Company estimates the fair value of stock options using the Black-Scholes model. Key inputs and assumptions used to estimate the fair value of stock options include the exercise price of the award, the expected option term, the expected volatility of the Company's stock over the option's expected term, the risk-free interest rate over the option's expected term, and the Company's estimated annual dividend yield.

The following table shows the weighted average assumptions:

 

     Three Months  Ended
September 30, 		   Nine Months Ended
September 30,
     2011   2010(1)    2011(2)   2010

Expected term

    4.49 years   —    5.12 years   4.53 years

Expected stock price volatility

    31.21%   —    30.76%   28.79%

Risk-free interest rate

    0.95%   —    1.84%   1.91%

Expected dividend yield

    1.53%   —    1.31%   1.64%

Weighted average grant date fair value

    $ 13.39   —    $ 16.09   $ 10.08

(1 ) 

During the three months ended September 30, 2010, the Company did not grant any stock options.

( 2 ) 

During the nine months ended September 30, 2011, the Company granted two stock option awards totaling 53,720 shares that vest 100% on the fifth anniversary of the grant date. Given that the Company did not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term for these grants, the Company utilized the simplified method in developing an estimate of the expected term of these options.

During the nine months ended September 30, 2011 and 2010, the Company granted a total of 340,973 and 385,924 stock options, respectively. At September 30, 2011, unrecognized costs related to outstanding stock options totaled approximately $6,856,000, before any related tax benefit. The unrecognized costs related to stock options are amortized over the related vesting period using the straight-line attribution method. Unrecognized costs related to stock options at September 30, 2011 are expected to be recognized over a weighted average period of 2.51 years.

 

Restricted Stock Units

The Company estimates the fair value of service-based and performance-based restricted stock units using the Black-Scholes model. Key inputs and assumptions used to estimate the fair value of restricted stock units include the vesting period, dividend yield and closing price of the Company's common stock on the date of grant.

The following table presents the weighted average assumptions:

 

     Three Months  Ended
September 30, 		  Nine Months Ended
September 30,
     2011   2010   2011   2010

Vesting period

    4.00 years   4.00 years   3.96 years   3.75 years

Expected dividend yield

    1.84%   1.37%   1.33%   1.57%

Estimated average grant date fair value per restricted stock unit

    $ 44.82   $ 55.33   $ 58.37   $ 43.89

During the nine months ended September 30, 2011 and 2010, the Company granted 145,768 and 127,960 restricted stock units, respectively. At September 30, 2011, unrecognized costs related to outstanding restricted stock units totaled approximately $9,880,000, before any related tax benefit. The unrecognized costs related to restricted stock units are amortized over the related vesting period using the straight-line attribution method. Unrecognized costs at September 30, 2011 are expected to be recognized over a weighted average period of 2.44 years.