Annual report pursuant to Section 13 and 15(d)

Stockholders' Equity

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Stockholders' Equity
12 Months Ended
Dec. 31, 2011
Stockholders' Equity [Abstract]  
Stockholders' Equity

7. Stockholders' Equity

Stock Repurchase Program

In October 2010, the Company's Board of Directors authorized a program to repurchase shares of the Company's common stock, par value $0.01 per share, from time to time, in an amount not to exceed $50.0 million ("Stock Repurchase Program"). The Company anticipates that it will finance the Stock Repurchase Program with cash from general corporate funds, or draws under the Credit Facility. The Company may repurchase shares of common stock in open market purchase or in privately negotiated transactions in accordance with applicable securities laws, rules and regulations. The timing and extent to which the Company repurchases its shares will depend upon market conditions and other corporate considerations.

The Company uses the cost method to account for the repurchase of common stock and the average cost method to account for reissuance of treasury shares. During the twelve months ended December 31, 2011, the Company repurchased 24,159 shares of common stock at an aggregate cost of $577,000, including commissions, or an average cost per share of $23.93. The remaining dollar value of shares authorized to be purchased under the share repurchase program is $49.4 million at December 31, 2011.

Equity Based Awards

At the Company's 2010 Annual Meeting of Stockholders, the stockholders of the Company approved the Company's 2010 Long Term Incentive Plan (the "2010 Incentive Plan"). The 2010 Incentive Plan is administered by the Compensation Committee of the Company's Board of Directors (the "Compensation Committee"). A total of 1,500,000 shares of the Company's common stock are reserved and available for issuance pursuant to awards granted under the 2010 Incentive Plan. A variety of discretionary awards for employees, officers, directors and consultants are authorized under the 2010 Incentive Plan, including incentive or non-qualified statutory stock options and nonvested stock. All awards must be evidenced by a written award certificate which will include the provisions specified by the Compensation Committee. The Compensation Committee will determine the exercise price for non-statutory stock options, which cannot be less than the fair market value of our common stock as of the date of grant.

In the event of a change of control as defined in the 2010 Incentive Plan, all restricted periods and restrictions imposed on non-performance based restricted stock awards will lapse and outstanding options will become immediately exercisable in full.

Share Based Compensation

Stock Options

The following table represents stock options activity for the year ended December 31, 2011:

 

     Number of
Shares
     Weighted
Average
Exercise Price
     Average
Remaining
Contractual
Term
     Aggregate
Intrinsic
Value
 

Options outstanding at January 1, 2011

     15,000       $ 16.88         5.0 years       $ 196,875   

Options granted

     —           —           —           —     

Options exercised

     —           —           —           —     

Options forfeited or expired

     —           —           —           —     

Options outstanding at December 31, 2011

     15,000       $ 16.88         4.0 years       $ —     

Options exercisable at December 31, 2011

     15,000       $ 16.88         4.0 years       $ —     

All options are fully vested and exercisable at December 31, 2011. There were no options granted and no compensation expense related to stock options grants recorded in the years ended December 31, 2011, 2010 or 2009.

Non-vested Stock

The Company issues stock-based compensation to employees in the form of non-vested stock, which is an award of common stock subject to certain restrictions. The awards, which the Company calls non-vested shares, generally vest over a five year period, conditioned on continued employment for the full incentive period. Compensation expense for the non-vested stock is recognized for the awards that are expected to vest. The expense is based on the fair value of the awards on the date of grant recognized on a straight-line basis over the requisite service period, which generally relates to the vesting period.

During 2011 and 2010, respectively, 139,470 and 20,000 non-vested shares were granted to employees pursuant to the 2010 Incentive Plan. During 2010 and 2009, respectively, 130,755 and 238,028 non-vested shares were granted to employees pursuant to the 2005 Long-Term Incentive Plan. No further awards can be granted under the 2005 Long-Term Incentive Plan. All shares granted vest over a five year period.

The Company also issues non-vested stock to its independent directors of the Company's Board of Directors. During 2011, 2010 and 2009, respectively, 15,200, 18,700 and 14,000 non-vested shares of stock were granted to the independent directors under the 2005 Director Compensation Plan. The shares issued under the 2005 Director Compensation Plan were drawn from the 1,500,000 shares reserved and available for issuance under the 2010 Incentive Plan. The shares fully vest one year from the date of the grant.

 

The fair value of non-vested shares is determined based on the closing trading price of the Company's shares on the grant date. The weighted average grant date fair values of non-vested shares granted during the years ended December 31, 2011, 2010 and 2009 were $26.37, $30.01 and $20.49, respectively.

The following table represents the non-vested stock activity for the year ended December 31, 2011:

 

     Number of
Shares
    Weighted Average
Grant Date Fair Value
 

Non-vested shares outstanding at January 1, 2011

     502,304      $ 23.79   

Granted

     154,670      $ 26.37   

Vested

     (161,979   $ 23.51   

Forfeited

     —        $ —     
  

 

 

   

 

 

 

Non-vested shares outstanding at December 31, 2011

     494,995      $ 24.17   
  

 

 

   

 

 

 

As of December 31, 2011, there was $8.5 million of total unrecognized compensation cost related to non-vested shares granted. That cost is expected to be recognized over the weighted average period of 2.0 years. The total fair value of shares vested in the years ended December 31, 2011, 2010 and 2009 were $3.9 million, $2.8 million and $1.9 million, respectively. The Company records compensation expense related to non-vested share awards at the grant date for shares that are awarded fully vested and over the vesting term on a straight line basis for shares that vest over time. The Company has recorded $4.1 million, $3.7 million and $2.4 million in compensation expense related to non-vested stock grants in the years ended December 31, 2011, 2010 and 2009, respectively.

Employee Stock Purchase Plan

In 2006, the Company adopted the Employee Stock Purchase Plan allowing eligible employees to purchase the Company's common stock at 95% of the market price on the last day of each calendar quarter. There were 250,000 shares reserved for the plan. The table below details the shares issued during 2011, 2010 and 2009 under the Employee Stock Purchase Plan.

 

     Number of
Shares
     Weighted Average
Per Share Price
 

Shares available as of January 1, 2008

     203,023      

Shares issued in 2009

     24,792       $ 24.97   

Shares issued in 2010

     28,508       $ 28.04   

Shares issued in 2011

     38,291       $ 23.40   
  

 

 

    

Shares available as of December 31, 2011

     111,432      
  

 

 

    

Treasury Stock

In conjunction with the vesting of the non-vested shares of stock, recipients incur personal income tax obligations. The Company allows the recipients to turn in shares of common stock to satisfy those personal tax obligations. The Company redeemed 43,182, 31,531 and 19,102 shares of common stock related to these tax obligations during the years ended December 31, 2011, 2010 and 2009, respectively.

Issuance of Common Stock

During the year ending December 31, 2010, the Company issued 29,988 shares of the Company's common stock, valued at $950,000, as settlement of contingent consideration on one of the Company's 2008 acquisitions. The shares were contingent upon the acquired company achieving certain financial measurements in the year after acquisition. The acquired company achieved the financial measurements and the Company remitted the contingent consideration to the seller.

The Company also issued 20,162 shares, valued at $600,000 during the year ending December 31, 2010 as consideration for one of the Company's acquisitions.