Stock Based Compensation

9 Months Ended

Sep. 30, 2012

Stock Based Compensation [Abstract]

Stock Based Compensation

Note 10.  Stock Based Compensation

On January 18, 2012, our independent Directors received unrestricted stock awards of 5,712 shares from the 2011 Stock Incentive Plan (the plan").  The Compensation Committee of the Board of Directors later approved an expansion of our stock-based compensation programs to include the grant of restricted stock units ("RSUs") to certain key individuals.  On May 7, 2012, the Company granted 65,500 restricted stock units payable in shares of our common stock, $1.00 par value per share, to 10 key individuals.  The grants consisted of three tranches of RSUs – Time-Based RSUs, Absolute Performance-Based RSUs, and Relative Performance-Based RSUs.  If we attain certain performance targets, the 65,500 RSUs could result in us issuing up to 81,875 shares of our stock.  Our operating results, net income and net income before taxes for the periods set forth below include (i) the following amounts of compensation expenses associated with the above-described stock grants and RSUs and (ii) the related reductions in earnings per share:

	Nine Months Ended September 30,						Three Months ended September 30,
	2012			2011			2012			2011
Stock-Based Compensation
Expense	$	881,000		$	1,404,000		$	337,000		$	398,000
Related Reduction in
Earnings Per Share 1	$	(0.12	)	$	(0.20	)	$	(0.05	)	$	(0.06	)
1 Same for basic and diluted earnings per share

On February 1, 2012 and March 9, 2012, we retired 13,665 and 16,439 shares of common stock, respectively, in order to meet tax liabilities associated with the vesting of Restricted Stock held by our executive officers.

Stock Awards

For the nine months ended September 30, 2012, our net income reflected $390,000 of stock-based compensation expense charges, exclusive of expense related to the RSUs discussed below, which reduced both basic and diluted earnings per share by $0.06 per share.

For the three months ended September 30, 2012, the Company's net income reflected $30,000 of stock-based compensation expense charges, exclusive of expense related to the RSUs discussed below, which did not have a material effect on both basic and diluted earnings per share.

A summary of the activity for stock awards during the nine months ended September 30, 2012 is as follows:

	Shares			Weighted Average Fair Value Per Share
Non-vested –December 31, 2011		87,500		$	22.91
Unrestricted Shares Granted		5,712		$	21.01
Shares Vested		(93,212	)	$	22.79
Non-vested – September 30, 2012		-			-

Restricted Stock Units

For the nine months ended September 30, 2012, our net income included $491,000 of stock-based compensation expense charges, exclusive of the stock awards discussed above, which reduced both basic and diluted earnings per share by $0.07 per share. For the three months ended September 30, 2012, the Company's net income included $307,000 of stock-based compensation expense charges, exclusive of the stock awards discussed above, which reduced both basic and diluted earnings per share by $0.04 per share. As these RSUs were first granted in the second quarter of 2012, net income for the three and the nine months ended September 30, 2011 did not include any RSU-related compensation expense charges.

Our Time-Based RSUs represent the right to receive one share of our common stock and will vest evenly over a three year period, except that the Time-Based RSUs for our two top executives will vest on the first anniversary of the grant date.  Each of our Absolute Performance-Based RSUs represent the right to receive a maximum of one-and-a-half shares of our common stock. These RSUs will pay out based on our basic earnings per share for fiscal year 2012, with the actual number of shares of common stock received dependent on our level of achievement as measured against the target. The shares due under these RSUs will vest evenly over three years beginning in fiscal 2013, except that each of our two top executives will receive any shares due under these RSUs in fiscal year 2013.

Each of our Relative Performance-Based RSUs represent the right to receive a maximum of one-and-a-half shares of our common stock. These RSUs will pay out in shares of our common stock based on how our total stockholder return for the three-year period (or the one-year period, for our top two executives) beginning January 1, 2012 compares relative to the total shareholder return of the companies comprising the Russell 2000 index for the same period or periods. Any shares due under these RSUs will be paid out in the fiscal year following the end of the applicable performance period.

In all cases, vesting is contingent upon continued employment with the company.

A summary of our  RSU activity and related information for the nine months ended September 30, 2012 is as follows:

	Number of RSUs		Weighted- Average Grant Date Fair Value
Non-vested –December 31, 2011		-		-
Restricted Stock Units Granted		65,500	$	21.48
Shares Vested		-		-
Non-vested – September 30, 2012		65,500	$	21.48