The total intrinsic value of SARs exercised during the years ended December 31, 2011, 2010 and
2009 was $2.9 million, $0.6 million and $0.4 million, respectively. The weighted average grant date fair
value per share for SARs granted in 2011, 2010 and 2009 was $13.65, $11.08 and $6.44, respectively.
We estimate the fair value of SARs granted using the Black-Scholes valuation model. The
following assumptions are as of December 31, 2011, 2010 and 2009:
2011
2010
2009
Expected life (in years) . . . . . . . . . . . . . . . . .
1 - 4
1 - 4
1 - 4
Volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.4% - 52.2% 45.3% - 56.3% 41.7% - 78.1%
Risk-free interest rate . . . . . . . . . . . . . . . . . . 0.1% - 0.6% 0.3% - 1.5% 0.5% - 2.2%
Dividend yield . . . . . . . . . . . . . . . . . . . . . . . .
0%
0%
0%
The expected life represents the period of time that SARs granted are expected to be outstanding.
We use historical experience with exercise and post-vesting exercise behavior to determine the
expected life of the SARs granted. Expected volatility is based on the historical volatility of our common
stock and other factors. The risk-free interest rate is based on the U.S. Treasury rate with a maturity
date corresponding to the SARs’ expected life.
Restricted Stock and RSUs
Our stock compensation plans allow grants of restricted stock and RSUs. Restricted stock is
issued on the grant date but is restricted as to transferability. RSU awards represent the right to
receive common stock when vesting occurs.
Restricted stock and RSU grants generally vest over periods ranging from one to five years of
service. Compensation cost for these awards is based on the closing market price of our common
stock on the date of grant. Stock-based compensation expense is based on the awards ultimately
expected to vest, and has been reduced for estimated forfeitures.
The following table summarizes the status of our restricted stock and RSUs at December 31, 2011
and the changes during the year then ended:
Equity
Instruments
(thousands)
Weighted
Average
Grant Date
Fair
Value Price
Aggregate Intrinsic
Value
($ thousands)
Weighted
Average
Remaining
Contractual
Life (years)
Nonvested at January 1, 2011 . . . . . . . . . . . . . .
6,306 $ 40.50
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,630
37.18
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1,279)
35.44
Vested and deferred . . . . . . . . . . . . . . . . . . . . . .
(323)
39.95
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(50)
33.54
Nonvested at December 31, 2011 . . . . . . . . . .
6,284
40.97 $
230,714
4.2
The total intrinsic value of restricted stock and RSUs vested in 2011, 2010 and 2009 was $54.0
million, $41.0 million and $24.6 million, respectively. The intrinsic value was based upon the closing
price of common stock on the date restricted stock and RSUs vested. The weighted average grant date
fair value of RSUs granted during the years ended December 31, 2010 and 2009 was $31.23 per
share and $22.27 per share, respectively.
In 2006, we granted 300,000 RSUs to certain executives that will vest only upon a change of
control (as defined). Because, in our assessment, a change of control is not probable, no
compensation cost has been recognized for these awards.
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