Stock Based Compensation

3 Months Ended

Mar. 31, 2013

Stock Based Compensation [Abstract]

Stock Based Compensation

Note 17.  Stock Based Compensation

On May 7, 2012, we granted 65,500 restricted stock units payable in shares of our common stock, $1.00 par value per share, to ten key individuals. The grants consisted of three tranches of restricted stock units ("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. As described further below, we also granted stock to our independent directors on January 15, 2013.

Our operating results, net income and net income before taxes for the periods set forth below include (i) the following amounts of compensation expense associated with the stock grants and RSUs and (ii) the related reductions in earnings per share:

	Three Months ended March 31,
	2013			2012
Stock-Based Compensation
Expense:
Stock Grants to Directors & Officers	$	30,000		$	340,000
RSUs Awards to Officers		243,000			-
Related Reduction in
Earnings Per Share 1	$	(0.03	)	$	(0.05	)
1 Same for basic and diluted earnings per share

Stock Awards

On January 15, 2013, our independent Directors received unrestricted stock awards of an aggregate of 6,708 shares from the 2011 Stock Incentive Plan (the Plan"). For the three months ended March 31, 2013, our net income reflected $30,000 of stock-based compensation expense charges, exclusive of expense related to the RSUs discussed below, which had no effect on either basic and diluted earnings per share.

A summary of the activity for stock awards during the three months ended March 31, 2013 is as follows:

	2013
	Shares	Weighted Average Fair Value Per Share
Non-vested – December 31, 2012	-	-
Unrestricted Shares Granted	6,708	$17.89
Shares Vested	(6,708)	$17.89
Shares Forfeited	-	-
Non-vested – March 31, 2013	-	-

Restricted Stock Units

For the three months ended March 31, 2013, our net income reflected $243,000 of stock-based compensation expense charges, exclusive of the stock awards discussed above, which reduced both basic and diluted earnings per share by $0.03 per share. As these RSUs were first granted in the second quarter of 2012, net income for the three months ended March 31, 2012 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 top four executives will vest on the first anniversary of the grant date. Each of our Absolute Performance-Based RSUs represents 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 maximum pay-out was reached with this target and 18,188 shares vested March 11, 2013, 3,376 additional shares vested on April 23, 2013, due to accelerated vesting of two top executives awards and the remaining 3,000 shares will vest ratably over the next two years.

Each of our Relative Performance-Based RSUs represents 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 four 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. For the year ended 2012, the Company ranked in the 27th percentile, which paid out 53% of the RSU's granted or 5,300 shares vested on March 11, 2013 to two of our top four executives. An additional 1,788 shares vested on April 23, 2013 due to an accelerated vesting period to two of our top four executives, 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 three months ended March 31, 2013 is as follows:

	Number of RSUs	Weighted- Average Grant Date Fair Value
Non-vested –December 31, 2012	65,500	$21.48
Additional Absolute RSU's Awarded *	8,188	19.35
Absolute RSU's Vested – March 11, 2013	(18,188)	19.35
Absolute RSU's Retired – March 11, 2013**	(6,349)	20.07
Relative Performance RSU's Vested – March 11, 2013	(5,300)	18.18
Relative Performance RSU's Retired – March 11, 2013**	(1,837)	20.07
Non-vested – March 31, 2013	42,014	$22.68

*Due to meeting our target, the maximum payout was reached, resulting in additional stock to be awarded.

**On March 11, 2013, we retired a combined total of 8,186 shares of common stock, in order to meet the minimum tax liabilities associated with the vesting of Restricted Stock held by our executive officers.