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Employee Benefits
12 Months Ended
Dec. 31, 2011
Employee Benefits [Abstract]  
Employee Benefits

9. Employee Benefits

Savings Plan

We sponsor a savings plan under Internal Revenue Code Section 401(k) to provide an opportunity for eligible employees to save for retirement on a tax-deferred basis. Under this plan, we may make discretionary contributions to the participants' accounts. We have not made any employer contributions since 2008.

Stock Incentive Plans

We have five stock incentive plans, the 1995 Long-Term Stock Incentive Plan ("1995 Plan"), the 1998 Long-Term Stock Incentive Plan ("1998 Plan"), the 2001 Long-Term Stock Incentive Plan ("2001 Plan"), the 2006 Stock Incentive Plan ("2006 Plan") and the 2011 Stock Incentive Plan ("2011 Plan"). With the adoption of the 2011 Plan, we froze all prior plans, and we have not made any new grants from prior plans. Under the stock incentive plans, at December 31, 2011, we reserved approximately 796,000 shares of our common stock for issuance upon the exercise of outstanding stock options and the vesting of outstanding restricted stock units, including 20,000 shares under the 1995 Plan, 124,000 shares under the 1998 Plan, 60,000 shares under the 2001 Plan, 546,000 shares under the 2006 Plan and 46,000 shares under the 2011 Plan. At December 31, 2011, a total of 1.5 million shares were available for future awards under the 2011 Plan. The Compensation Committee of the Board of Directors administers all of our stock incentive plans.

The 2011 Plan permits us to issue incentive or non-qualified stock options to purchase shares of common stock, stock appreciation rights, restricted and unrestricted stock awards, performance awards, and cash awards to employees and non-employee directors.

The components of our pre-tax stock-based compensation expense, net of forfeitures, and associated income tax benefits are as follows (dollars in thousands):

 

     Years Ended December 31,  
     2011      2010      2009  

Stock options

   $ 71       $ 36       $ 18   

Restricted stock

     1,605         1,236         772   
  

 

 

    

 

 

    

 

 

 
   $ 1,676       $ 1,272       $ 790   
  

 

 

    

 

 

    

 

 

 

Income tax benefit

   $ 650       $ 491       $ 325   
  

 

 

    

 

 

    

 

 

 

Stock Options

Our stock incentive plans permit certain employees to receive grants of fixed-price stock options. The option price is equal to the fair value of a share of the underlying stock at the date of grant. Option terms are generally 10 years, with options generally becoming exercisable between one and five years from the date of grant.

We estimated the fair value of each stock option on the date of the grant using a Black-Scholes option pricing model that used assumptions noted below. We based expected volatility on a blend of implied and historical volatility of our common stock. We used historical data on exercises of stock options and other factors to estimate the expected term of the share-based payments granted. We based the risk-free rate on the U.S. Treasury yield curve in effect at the date of grant. We based the expected life of the options on historical data and it is not necessarily indicative of exercise patterns that may occur. The dividend yield reflected the assumption that the current dividend payout in effect at the time of grant.

 

We granted stock options of 14,704 shares of our common stock for 2009. No stock options were issued in 2011 or 2010. We estimated the fair value of each common stock option granted during 2009 using the following weighted-average assumptions:

 

     2009  

Dividend yield

     0

Expected volatility

     92

Risk-free interest rate

     0.97

Expected lives (in years)

     0   

The following table summarizes the status of options granted under the stock incentive plans:

 

     Stock Options     Weighted
Average
Exercise Price
 

Outstanding at January 1, 2009

     478,194      $ 19.13   

Granted

     14,704        6.43   

Exercised

     (3,187     3.55   

Cancelled/forfeited

     (139,985     16.87   
  

 

 

   

Outstanding at December 31, 2009

     349,726        19.64   

Granted

     —          —     

Exercised

     (3,750     3.55   

Cancelled/forfeited

     (88,260     25.08   
  

 

 

   

Outstanding at December 31, 2010

     257,716        18.01   

Granted

     —          —     

Exercised

     (6,375     3.63   

Cancelled/forfeited

     (7,629     22.43   
  

 

 

   

Outstanding at December 31, 2011

     243,712        18.25   

Options exercisable, December 31, 2011

     227,696      $ 18.58   

Options expected to vest, December 31, 2011

     243,155        18.26   

The total intrinsic value (market value on date of exercise less exercise price) of options exercised during 2011, 2010 and 2009 was approximately $24,000, $17,000 and $9,000, respectively. As of December 31, 2011, outstanding stock options, options vested and expected to vest, and options exercisable had no intrinsic value because the exercise price was greater than the stock price.

We received approximately $24,000 for 2011, $13,000 for 2010 and $18,000 for 2009 in cash from option exercises under all share-based payment arrangements. We recognized actual tax expense for the tax deductions from option exercises under all share-based payment arrangements for 2011, 2010 and 2009 of approximately $81,000, $153,000 and $592,000, respectively. U.S. GAAP requires the cash flows resulting from income tax deductions in excess of compensation costs to be classified as financing cash flows.

At December 31, 2011, there was $65,000 of total unrecognized, pre-tax compensation cost related to non-vested stock options. We expect to recognize this cost over a weighted-average period of approximately 1.17 years.

 

The following table summarizes information about the stock options granted under the stock incentive plans that were outstanding at December 31, 2011:

 

                   Stock Options Outstanding      Stock Options Exercisable  
     Range of exercise prices      Number
outstanding as of
December 31,
2011
     Weighted-
average
remaining
contractual
term
     Weighted-
average
exercise price
     Number
exercisable as of
December 31,
2011
     Weighted-
average
exercise price
 
   $ 3.55       $ 5.92         28,590         1.26       $ 5.52         28,590       $ 5.52   
     10.65         11.84         26,250         1.88         11.50         26,250         11.50   
     12.19         12.19         34,401         1.94         12.19         34,401         12.19   
     12.94         14.28         40,044         6.22         13.56         24,028         13.56   
     14.31         22.38         26,751         2.79         17.97         26,751         17.97   
     22.81         22.81         7,500         3.05         22.81         7,500         22.81   
     27.05         27.05         61,342         3.15         27.05         61,342         27.05   
     28.59         37.72         13,334         3.59         35.26         13,334         35.26   
     42.56         42.56         500         3.62         42.56         500         42.56   
     44.60         44.60         5,000         3.56         44.60         5,000         44.60   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
Cumulative    $ 3.55       $ 44.60         243,712         3.12       $ 18.25         227,696       $ 18.58   

The weighted-average fair value of options granted was $6.43 per share during 2009.

Restricted Stock

Our stock incentive plans permit certain employees and non-employee directors to be granted restricted share unit awards in common stock. We value awards of restricted share units by reference to shares of common stock. Awards entitle a participant to receive, upon the settlement of the unit, one share of common stock for each unit. The awards vest annually, over either a two or three year period from the date of the award, and do not have voting rights. Our restricted stock unit awards include both time-based awards that vest ratably over three years and restricted stock units that are tied to the achievement of certain financial targets and stock performance criteria and cliff-vest in three years. The financial targets include revenue and operating income measurements. Total stockholder return is considered a market condition and the fair value of those awards was calculated using a Monte Carlo simulation valuation model.

We granted 334,485 restricted stock awards to employees and non-employee directors during 2011, of which 119,805 related to performance-based restricted stock units ("PRSUs"). We did not grant any restricted stock awards prior to January 1, 2006. We expense the fair value of the time-based awards at the grant date over the applicable vesting periods. We recognize stock-based compensation associated with all non-market-condition PRSUs, if it is probable that the performance condition will be satisfied. For market-condition PRSUs, we recognize expense whether the market condition is satisfied or not. We recognize the stock-based compensation expense for PRSUs over the requisite service period for each vesting tranche. Actual payment under the PRSUs granted in 2011 was dependent upon achievement of various financial targets and total stockholder return goals. Some of the various financial targets were achieved at December 31, 2011. The total stockholder return goal was not met. Actual payment under the PRSUs granted in 2010 were dependent upon achievement of certain cash flow goals which were achieved at December 31, 2010. No PRSUs were granted in 2009.

 

The following table summarizes the restricted stock award activity for the years ended December 31, 2011, 2010 and 2009:

 

     Number of
Share Unit
Awards
    Weighted
Average
Grant Date
Fair Value
 

Outstanding at January 1, 2009

     98,395      $ 27.86   

Granted

     253,319        3.47   

Released

     (75,901     22.87   

Forfeited

     (49,110     8.81   
  

 

 

   

Outstanding at December 31, 2009

     226,703        6.40   

Granted

     411,130        8.60   

Released

     (110,485     9.31   

Forfeited

     (73,773     6.49   
  

 

 

   

Outstanding at December 31, 2010

     453,575        7.67   

Granted

     334,485        5.73   

Released

     (181,599     6.51   

Forfeited

     (54,487     7.44   
  

 

 

   

Outstanding at December 31, 2011

     551,974        6.90   

As of December 31, 2011, there was $1.9 million of total unrecognized pre-tax compensation cost related to non-vested restricted stock. We expect this cost to be recognized over a weighted-average period of approximately 1.54 years. The aggregate intrinsic value of RSUs and PRSUs outstanding at December 31, 2011 was $1.6 million.