Stock-Based Compensation

6 Months Ended

Jun. 30, 2013

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-Based Compensation

9. Stock-Based Compensation

In May 2011, the shareholders of the Corporation approved the adoption of the 2011 Omnibus Incentive Plan (Incentive Plan) which authorizes the issuance of up to 1,000,000 shares of the Corporation’s common stock for grants of equity-based compensation. Awards under the Incentive Plan may include incentive non-qualified stock options, stock appreciation rights, restricted shares and restricted stock units, performance awards, other stock-based awards or short-term cash incentive awards. The Incentive Plan is administered by the Compensation Committee of the Board of Directors who has the authority to determine, within the limits of the express provisions of the Incentive Plan, the individuals to whom the awards will be granted; the nature, amount and terms of such awards; and the objectives and conditions for earning such awards.

In May 2013, the Compensation Committee granted 173,750 non-qualified stock options to select employees. The options have a ten-year life and vest over a three year period. The exercise price of $17.16 was equal to the closing price of the Corporation’s common stock on the New York Stock Exchange on the date of grant and the fair value of the options was $5.82 per share. The fair value of the options as of the date of grant was calculated using the Black-Scholes option-pricing model based on an assumption for the expected life of the options of six years, a risk-free interest rate of 1.26%, an expected dividend yield of 4.20%, expected forfeiture rate of 5% and an expected volatility of 52.68%. The resultant stock-based compensation expense of $961 will be recognized over the requisite service period of three years.

The Incentive Plan also provides for annual grants of shares of the Corporation’s common stock to non-employee directors following the Corporation’s annual shareholder meeting. Each annual director award will be for a number of shares having a fair market value equal to $25 and will be fully vested as of the grant date. In May 2013, 11,656 shares of the Corporation’s common stock were issued to the non-employee directors.

Stock-based compensation expense for the three months ended June 30, 2013 and 2012 equaled $208 and $266, respectively. The related income tax benefit recognized in the condensed consolidated statement of operations for each of the periods was approximately $72 and $93, respectively. Stock-based compensation expense for the six months ended June 30, 2013 and 2012 equaled $504 and $665, respectively. The related income tax benefit recognized in the condensed consolidated statement of operations for each of the periods was approximately $176 and $233, respectively.