Stock Option Plan

12 Months Ended

Dec. 31, 2012

Stock Option Plan

16. STOCK OPTION PLAN:

The Company has an incentive stock plan to provide for the granting of options to senior management of the Company at prices not less than market at the date of grant. At December 31, 2012, the Company had allocated 1,920,000 shares of stock for issuance under the plan. The plan provides that options granted are exercisable after two years from date of grant at a rate of 20% each year cumulatively during the 10-year term of the option. Shares are issued under the stock option plan from available authorized shares. An analysis of stock option activity for the year ended December 31, 2012 is presented in the table and narrative below:

	Shares			Weighted-Average Ex. Price		Weighted- Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value ($000)
Outstanding, beginning of year		481,024		$	29.11
Granted		—			—
Exercised		(37,246	)		22.13
Cancelled		(23,685	)		31.95
Outstanding, end of year		420,093		$	29.62		6.06	$	12,443
Exercisable at end of year		179,678		$	26.75		3.92	$	4,806

The options outstanding at December 31, 2012, had exercise prices ranging between $15.40 and $33.55. Stock options have been adjusted retroactively for the effects of stock dividends and splits.

The following table summarizes information concerning outstanding and vested stock options as of December 31, 2012:

Exercise Price	Number Outstanding		Remaining Contracted Life (Years)		Number Vested
$15.40		11,805		0.4		11,805
$22.05		53,319		2.1		53,319
$27.32		82,994		4.1		62,984
$33.55		125,925		6.4		50,370
$31.45		146,050		8.8		1,200

The fair value of the options granted in 2011 was estimated using the Black-Scholes options pricing model with the following weighted-average assumptions: risk-free interest rate of 1.34%; expected dividend yield of 2.88%; expected life of 5.93 years; and expected volatility of 26.92%.

The weighted-average grant-date fair value of options granted during the year ended December 31, 2011 was $5.94. There were no grants during 2012 and 2010. The total intrinsic value of options exercised during the years ended December 31, 2012, 2011, and 2010, was $510,000, $619,000, and $778,000, respectively.

As of December 31, 2012, there was $1,118,000 of total unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the Plan. That cost is expected to be recognized over a weighted-average period of 1.95 years. The total fair value of shares vested during the years ended December 31, 2012, 2011, and 2010 was $423,000, $369,000 and $213,000 respectively.

The aggregate intrinsic value of vested stock options at December 31, 2012 totaled $2,203,000.