Share Based Compensation

6 Months Ended

Jun. 30, 2013

Share Based Compensation [Abstract]

Share Based Compensation

9. Share Based Compensation

We maintain share based payment plans that include a non-employee director stock purchase plan and a long-term incentive plan that permits the issuance of share based compensation, including stock options and non-vested share awards. The long-term incentive plan, which is shareholder approved, permits the grant of additional share based awards for up to 0.5 million shares of common stock as of June 30, 2013.  The non-employee director stock purchase plan permits the issuance of additional share based payments for up to 0.3 million shares of common stock as of June 30, 2013. Share based awards and payments are measured at fair value at the date of grant and are expensed over the requisite service period. Common shares issued upon exercise of stock options come from currently authorized but unissued shares.

A portion of our president’s annual salary is paid in the form of common stock.  The annual amounts paid in common stock (also referred to as “salary stock”) are $0.020 million and $0.015 million for 2013 and 2012, respectively.  During the first quarter of 2011, pursuant to a management transition plan, our  former chief executive officer’s annual salary was increased by $0.2 million effective January 1, 2011 through December 31, 2012. This increase was paid entirely in the form of salary stock. These shares were issued each pay period and vested immediately.

During the second quarter of 2013, we issued 0.1 million restricted stock units to six of our executive officers.  These restricted stock units do not vest for a minimum of three years and until we repay in full our obligations related to the Troubled Asset Relief Program.  Also, during the second quarter of 2013, pursuant to our performance-based compensation plans we granted 0.1 million stock options to certain officers, none of whom is a named executive officer.  The stock options have an exercise price equal to the market value on the date of grant, vest ratably over a three year period and expire 10 years from date of grant.  We use the Black Scholes option pricing model to measure compensation cost for stock options.  We also estimate expected forfeitures over the vesting period.

Our directors have elected to receive at least a portion of their quarterly cash retainer fees in the form of common stock (either on a current basis or on a deferred basis pursuant to the non-employee director stock purchase plan referenced above). Shares equal in value to that portion of each director’s quarterly cash retainer are issued each quarter and vest immediately. We issued 0.03 million shares and 0.13 million shares to directors during the first six months of 2013 and 2012, respectively and expensed their value during those same periods.

Total compensation expense recognized for stock option grants, restricted stock grants, restricted stock unit grants and salary stock was $0.1 million and $0.3 million during the three and six month periods ended June 30, 2013, respectively, and was $0.2 million and $0.1 million during the same periods in 2012, respectively.  The corresponding tax benefit relating to this expense was zero for the three and six month periods ended June 30, 2013 and 2012, respectively.  Total expense recognized for non-employee director share based payments was $0.1 million in both three month periods ended June 30, 2013 and 2012 and $0.2 million in both six month periods ended June 30, 2013 and 2012.

At June 30, 2013, the total expected compensation cost related to non-vested stock options, restricted stock and restricted stock unit awards not yet recognized was $1.8 million.  The weighted-average period over which this amount will be recognized is 2.6 years.

A summary of outstanding stock option grants and related transactions follows:

						Weighted-
						Average
				Average		Remaining		Aggregated
	Number of			Exercise		Contractual		Intrinsic
	Shares			Price		Term (Years)		Value
								(In thousands)
Outstanding at January 1, 2013		275,933		$	4.46
Granted		77,500			6.42
Exercised		(7,001	)		1.92
Forfeited		(6,999	)		2.39
Expired		(3,926	)		52.11
Outstanding at June 30, 2013		335,507		$	4.46		8.54	$	893
Vested and expected to vest at June 30, 2013		314,062		$	4.46		8.48	$	850
Exercisable at June 30, 2013		108,938		$	5.69		7.08	$	333

A summary of outstanding non-vested restricted stock and stock units and transactions follows:

				Weighted-
				Average
	Number			Grant Date
	of Shares			Fair Value
Outstanding at January 1, 2013		375,416		$	6.21
Granted		82,833			6.42
Vested		(14,636	)		76.30
Forfeited		-
Outstanding at June 30, 2013		443,613		$	3.94

A summary of the weighted-average assumptions used in the Black-Scholes option pricing model for grants of stock options during 2013 follows:

Expected dividend yield		0.31	%
Risk-free interest rate		1.12
Expected life (in years)		6.00
Expected volatility		101.30	%
Per share weighted-average fair value	$	4.98

Certain information regarding options exercised during the periods follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2013		2012		2013		2012
	(In thousands)
Intrinsic value	$	6	$	-	$	21	$	-
Cash proceeds received	$	2	$	-	$	13	$	-
Tax benefit realized	$	-	$	-	$	-	$	-