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Share-Based Compensation Plans
3 Months Ended
Mar. 31, 2012
Share-Based Compensation Plans [Abstract]  
Share-Based Compensation Plans

Note 10: Share-Based Compensation Plans

The Corporation maintains a share-based compensation plan, under which it periodically grants share-based awards, which consists of stock options and restricted stock units, for a fixed number of shares to certain officers of the Corporation. The fair value of share-based awards is recognized as compensation expense over the requisite service or performance period. During the three-month periods ended March 31, 2012 and 2011, share-based compensation expense related to stock options and restricted stock units totaled $0.3 million and $0.2 million, respectively.

During the three-month period ended March 31, 2012, the Corporation granted options to purchase 229,763 shares of common stock and 68,427 restricted stock units to certain officers. At March 31, 2012, there were 987,440 shares of common stock available for future grants under share-based compensation plans.

 

Stock Options

A summary of activity for the Corporation’s stock options as of and for the three months ended March 31, 2012 is presented below:

 

                                         
    Non-Vested Stock Options Outstanding     Stock Options Outstanding  
    Number of
Options
    Weighted-
Average
Exercise
Price
Per Share
    Weighted-
Average
Grant Date
Fair Value
Per Share
    Number of
Options
    Weighted-
Average
Exercise
Price
Per Share
 

Outstanding at January 1, 2012

    162,883     $ 21.27     $ 6.55       815,119     $ 28.29  

Granted

    229,763       23.78       7.08       229,763       23.78  

Exercised

    —         —         —         —         —    

Vested

    (19,754     24.56       7.65       —         —    

Forfeited/expired

    (1,522     20.97       6.44       (11,238     31.20  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Outstanding at March 31, 2012

    371,370     $ 22.65     $ 6.82       1,033,644     $ 27.26  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Exercisable/vested at March 31, 2012

                            662,274     $ 29.84  
                           

 

 

   

 

 

 

The weighted-average remaining contractual terms were 6.2 years for all outstanding stock options and 4.3 years for exercisable stock options at March 31, 2012. The intrinsic value of all outstanding in-the-money stock options and exercisable in-the-money stock options was $0.5 million and $0.1 million, respectively, at March 31, 2012. The aggregate intrinsic values of outstanding and exercisable options at March 31, 2012 were calculated based on the closing market price of the Corporation’s common stock on March 31, 2012 of $23.44 per share less the exercise price. Options with intrinsic values less than zero, or “out-of-the-money” options, were not included in the aggregate intrinsic value reported.

At March 31, 2012, unrecognized compensation expense related to stock options totaled $2.1 million and is expected to be recognized over a remaining weighted average period of 2.6 years.

The fair value of the stock options granted during the three months ended March 31, 2012 was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions.

 

         

Expected dividend yield

    3.60

Risk-free interest rate

    1.18

Expected stock price volatility

    44.4

Expected life of options — in years

    6.11  

Weighted average per share fair value

  $ 7.08  

Restricted Stock Units

In addition to stock options, during the three months ended March 31, 2012, the Corporation granted restricted stock performance units and time restricted stock units (collectively referred to as restricted stock units) to certain officers. The restricted stock performance units vest based on the Corporation achieving certain performance target levels. The restricted stock performance units are eligible to vest from 0.5x to 1.5x the number of units originally granted depending on which, if any, of the performance target levels are met. However, if the minimum performance target level is not achieved, no shares will become vested or be issued for that respective year’s restricted stock performance units. The time restricted stock units vest upon satisfaction of a service condition. Upon achievement of the performance target level and/or satisfaction of a service condition, the restricted stock units are converted into shares of the Corporation’s common stock on a one-to-one basis. Compensation expense related to restricted stock units is recognized over the expected requisite performance or service period, as applicable.

 

A summary of the activity for restricted stock units as of and for the three months ended March 31, 2012 is presented below:

 

                 
    Number of
Shares
    Weighted-
Average
Grant Date
Fair Value
 

Outstanding at January 1, 2012

    130,512     $ 20.90  

Granted

    68,427       22.24  

Converted into shares of common stock

    (32,677     23.25  

Forfeited/expired

    (8,428     23.05  
   

 

 

   

 

 

 

Outstanding at March 31, 2012

    157,834     $ 20.88  
   

 

 

   

 

 

 

At March 31, 2012, unrecognized compensation expense related to restricted stock unit awards totaled $2.5 million and is expected to be recognized over approximately three years.