Stock Based Compensation

6 Months Ended

Jun. 30, 2013

Stock Based Compensation [Abstract]

Stock Based Compensation

NOTE 13: STOCK BASED COMPENSATION

The Company adopted and, at the annual meeting held on April 29, 2011, its shareholders approved, the Amended and Restated 2008 Long-Term Incentive Plan (the "Amended and Restated LTIP") to assist the Company and its affiliates in attracting, motivating and retaining selected individuals to serve as employees, directors, consultants and advisors of the Company and its affiliates by providing incentives to such individuals through the ownership and performance of the Company's common stock. The Amended and Restated LTIP increased the total number of shares authorized under the Amended and Restated LTIP from 500,000 shares to 1,100,000 shares of common stock. The increases in the number of shares available under the Amended and Restated LTIP required approval from the New York Public Service Commission ("NYPSC") and New Jersey Board of Public Utilities ("NJBPU"). As of March 31, 2012, the Company received approval from both the NYPSC and the NJBPU for the Amended and Restated LTIP. Shares available for grant under the Amended and Restated LTIP may be either authorized but unissued shares or shares that have been reacquired by the Company and designated as treasury shares. As of June 30, 2013 and December 31, 2012, 34,563 and 675,956 shares, respectively, of the Company's common stock were available for grant under the Amended and Restated LTIP. The Amended and Restated LTIP permits the issuance by the Company of awards in the form of stock options, stock appreciation rights, restricted stock and restricted stock units and performance shares. The exercise price per share of the Company's common stock purchasable under any stock option or stock appreciation right may not be less than 100% of the fair market value of one share of common stock on the date of grant. The term of any stock option or stock appreciation may not exceed ten years. The Amended and Restated LTIP also provides plan participants with a cashless mechanism to exercise their stock options. Issued restricted stock, stock options and restricted stock units are subject to vesting restrictions.

Restricted Common Stock Awards

Stock-based compensation expense for restricted stock awards was $0.5 million and $0.2 million for the three months ended June 30, 2013 and 2012, respectively and $0.7 million and $0.3 million for the six months ended June 30, 2013 and 2012, respectively. Restricted stock awards are amortized over their respective vesting periods of two or three years. The Company records stock-based compensation for grants of restricted stock awards on a straight-line basis.

The following table summarizes the restricted common stock activity during the six-month period ended June 30, 2013:

	June 30, 2013
			Weighted
			Average Fair
Unvested Shares	Shares		Value
Balance - nonvested at January 1, 2013	59,078		$	14.10
Granted	420,824			10.19
Vested	(35,846	)		12.09
Forfeited	(19,974	)		14.64
Balance - nonvested at June 30, 2013	424,082		$	10.37

The total fair value of restricted stock vested during the six-month period ended June 30, 2013 and 2012 was $0.4 million. As of June 30, 2013, $3.9 million of total unrecognized compensation expense related to restricted common stock is expected to be recognized over a weighted average period of approximately 3 years.

Stock Options

The following tables summarize stock option activity for the six-month period ended June 30, 2013, along with stock options exercisable at the end of the period:

				For the Six Months Ended
				June 30,2013
					Weighted
				Weighted	Average
				Average	Contractual		Aggregate
Options	Shares			Exercise Price	Life (Years)		Intrinsic Value
Outstanding - Beginning of period	263,554		$	14.02
Stock options granted	476,189			10.86
Exercised	-			-
Forfeited	(224,036	)		12.45
Outstanding - End of period	515,707		$	11.79	9	$	-
Vested and Expected to Vest at June 30	489,922					$	-
Exercisable at June 30	180,425					$	-

The aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between the Company's closing stock price on the last trading day, June 30, 2013, and the exercise price times the number of shares) that would have been received by the option holders had all the option holders exercised in-the-money options on June 30, 2013. This amount changes based on the fair market value of the Company's common stock.

The fair value of the stock-based awards was estimated using the Black-Scholes model with the following weighted-average assumptions for the three and six months ended June 30, 2013:

		Three Months Ended		Six Months Ended
		June 30, 2013
Expected life (in years)		4			6
Interest rate		0.58	%		0.97	%
Volatility		21.56	%		27.89	%
Dividend yield		11.09	%		10.78	%
Weighted-average fair value per share at grant date	$	0.06		$	0.50

The following table sets forth the total stock-based compensation expense resulting from stock options and restricted stock granted to employees that are included in the Company's consolidated statements of income for the three months ended and six months ended June 30, 2013 and 2012:

($ in thousands)		Three Months Ended				Six Months Ended
Stock-Based Compensation Expense		June 30, 2013		June 30, 2012		June 30, 2013		June 30, 2012
Cost of services and products	$	3	$	-	$	6	$	-
Selling, general and administrative expenses		466		206		681		398
	$	469	$	206	$	687	$	398

As of June 30, 2013, $0.2 million of total unrecognized compensation expense related to stock options is expected to be recognized over a weighted average period of approximately 3 years.