Share-Based Compensation

In May 2005, the Company adopted the 2005 Plan which succeeded a prior plan. A maximum of 4,897,250 shares of common stock under the 2005 Plan are authorized for issuance upon exercise of options, stock appreciation rights and other awards, or upon vesting of restricted or deferred stock awards. As of December 31, 2013, only options and restricted stock awards have been granted under these plans. Beginning January 1, 2008, options granted, for which the Company has recognized share-based compensation expense become exercisable at a rate of 25% per year beginning one year from the date granted, are granted at the market price on the date of grant, and expire after 10 years. Prior to January 1, 2008, shares became exercisable at a rate of 20% per year.



	Year Ended December 31,
	2013		2012			2011
	(Amounts in thousands)
Cash received from option exercises	$	1,446	$	2,492		$	1,951
Compensation cost	974		(370		)	899
Excess tax benefit	202		86			56

In 2013, the fair value of stock option awards was estimated on the date of grant using a closed-form option valuation model (Black-Scholes) based on the following table, which provides the weighted-average values of assumptions used in the calculation of grand-date fair values during the years ended December 31, 2013. No stock options were awarded in 2012 and 2011.



	2013
Weighted-average grant-date fair value	$7.11
Expected volatility	33.16% - 33.18%
Weighted-average expected volatility	33.17%
Risk-free interest rate	0.88% - 1.60%
Expected dividend yield	5.40% - 5.76%
Expected term in months	72

Expected volatilities are based on historical volatility of the Company's stock over the term of the options. The Company estimated the expected term of options, which represents the period of time that options granted are expected to be outstanding, by using historical exercise patterns and post-vesting termination behavior. The risk free interest rate is determined based on U.S. Treasury yields with equivalent remaining terms in effect at the time of the grant.

A summary of the stock option activity under the Company’s plans as of December 31, 2013 and changes during the year then ended is presented below:



	Shares	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (in 000’s)
Outstanding at January 1, 2013	451,025	$	47.22
Granted	80,000	$	43.53
Exercised	(86,275)	$	33.93
Canceled or expired	(11,000)	$	50.07
Outstanding at December 31, 2013	433,750	$	49.11	4.2	$	1,287
Exercisable at December 31, 2013	353,750	$	50.37	3.1	$	792

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all options been exercised on December 31, 2013. The aggregate intrinsic value of stock options exercised was $862,000, $392,000, and $262,000 during 2013, 2012, and 2011, respectively. The total fair value of options vested was $146,000, $407,000, and $467,000 during 2013, 2012, and 2011, respectively.

The following table presents information regarding stock options outstanding at December 31, 2013:



	Options Outstanding				Options Exercisable
Range of Exercise Prices	Number of Options	Weighted-Avg. Remaining Contractual Life (Years)	Weighted- Avg. Exercise Price		Number of Options	Weighted- Avg. Exercise Price
$33.61-45.30	125,250	8.0	$	40.36	45,250	$	34.76
$47.61-51.51	161,000	3.6	$	49.70	161,000	$	49.70
$52.13-58.83	147,500	1.9	$	55.88	147,500	$	55.88

As of December 31, 2013, $487,000 of total unrecognized compensation cost related to non-vested stock options is expected to be recognized over a weighted-average period of 3.4 years.

Under the 2005 Plan, the Compensation Committee of the Company’s Board of Directors granted performance vesting restricted stock units to the Company’s senior management and key employees. See Note 1 for grants summary. A summary of the restricted stock unit activity as of December 31, 2013, 2012, and 2011 and changes during the years then ended is as follows:



	2013			2012			2011
	Shares	Weighted- Average Fair Value per Share		Shares	Weighted- Average Fair Value per Share		Shares		Weighted- Average Fair Value per Share
Outstanding at January 1	169,000	$	42.22	135,000	$	40.70	55,000		$	41.40
Granted	84,500	$	36.82	92,000	$	44.01	80,000		$	40.22
Vested	0			0			0
Forfeited/Canceled	(3,000)	$	36.82	(3,000)	$	44.01	0
Expired	(80,000)	$	40.22	(55,000)	$	41.40	0
Outstanding at December 31	170,500	$	39.64	169,000	$	42.22	$	135,000	$	40.70