(7)                     Capital Transactions

Dividends

The declaration of future dividends is subject to the discretion of the Company’s Board of Directors and will depend upon various factors, including the Company’s earnings, financial condition, restrictions imposed by any indebtedness that may be outstanding, cash requirements, future prospects and other factors deemed relevant by its Board of Directors.

On May 7, 2012, the Company announced that its Board of Directors approved a cash dividend of $0.05 per common share in an aggregate amount of $780 that was paid on May 29, 2012 to shareholders of record on May 18, 2012.

Share-based Compensation

Stock option activity for the six months ended June 30, 2012 is as follows:

During the six month period ended June 30, 2012, the Company issued options to purchase 217 shares of common stock under the 2009 Incentive Plan to the Company’s new senior executives. These options were issued with a weighted-average exercise price of $15.65 per share and a weighted-average grant date fair value of $7.66 per share. All of the options issued have an option termination date of ten years from the option grant date.

The fair value of each option grant was estimated on the date of the grant using the Black-Scholes option-pricing model with the following weighted-average assumptions for the six month period ended June 30, 2012:

Expected option lives and volatilities are based on historical data of the Company. The risk free interest rate is calculated as the average U.S. Treasury obligation rate that corresponds with the option life.

The Company’s outstanding stock options include both time-based stock options, which vest over differing periods ranging from the date of issuance up to 36 months from the option grant date, and performance-based stock options, which vest upon achieving operating income margins of six, eight and ten percent as reported in four of five consecutive quarters over the term of the options.

Share-based compensation expense from time-based stock options for the three month periods ended June 30, 2012 and 2011 was approximately $356 and $136, respectively; the related tax benefit was approximately $142 and $54, respectively. Share-based compensation expense from time-based stock options for the six month periods ended June 30, 2012 and 2011 was approximately $669 and $224, respectively; the related tax benefit was approximately $267 and $88, respectively. As of June 30, 2012 and December 31, 2011, the unrecognized share-based compensation expense related to the grants described above was $1,500 and $607, respectively. As of June 30, 2012, the remaining compensation expense is expected to be recognized over the weighted-average period of approximately 2.0 years.

Shared-based compensation expense from performance-based stock options for the three month periods ended June 30, 2012 and 2011was approximately $329 and $920, respectively; the related tax benefit was approximately $127 and $370, respectively. Shared-based compensation expense from performance-based stock options for the six month periods ended June 30, 2012 and 2011was approximately $652 and $920, respectively; the related tax benefit was approximately $255 and $370, respectively. As of June 30, 2012 and December 31, 2011, the unrecognized share-based compensation expense related to these options was approximately $0 and $652, respectively. As of June 30, 2012, there is no remaining compensation expense to be recognized for the performance-based stock options.

At June 30, 2012, the aggregate intrinsic value of outstanding time-based and performance-based stock options to purchase 1,545 shares of common stock, exercisable time-based and performance-based stock options to purchase 1,129 shares of common stock and time-based and performance-based stock options to purchase 392 shares of common stock that are expected to vest (net of expected forfeitures) was $6,943, $5,797 and $1,077, respectively. At December 31, 2011, the aggregate intrinsic value of outstanding options to purchase 1,374 shares of common stock, the exercisable options to purchase 772 shares of common stock, and options to purchase 602 shares of common stock expected to vest (net of expected forfeitures) was $7,757, $4,819 and $2,732, respectively.