Stock-Based Compensation

6 Months Ended

Jun. 30, 2011

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Note 9 – Stock-Based Compensation

In 2007, the Board and the Company’s shareholders approved the 2007 Omnibus Incentive Stock Plan (the “Omnibus Plan”). The Omnibus Plan permits the issuance of up to 880,000 shares of the Company’s common stock in the form of stock options, stock appreciation rights (“SARs”), restricted stock, restricted stock units and performance awards. The Company issues shares out of treasury stock for these awards. During the six months ended June 30, 2011, 26,017 restricted shares and 75,016 SARs were granted under the Omnibus Plan.

The Company also maintains its other stock-based incentive plans for the restricted common stock previously awarded and the options previously issued and still outstanding. These plans have been superseded by the Omnibus Plan and accordingly, any available restricted stock and stock option grants not yet issued have been cancelled.

Restricted Stock

Restricted shares are amortized to expense over the three-year vesting period. As of June 30, 2011, the total unrecognized compensation expense related to non-vested common stock was $1,287,000 and the related weighted-average period over which it is expected to be recognized is approximately 1.5 years.

Following is a summary of the activity of the restricted stock:

	Six Months Ended
	June 30, 2011
	Shares		Fair Value
Balance at December 31, 2010	50,271		$	28.51
Granted	26,017			36.35
Vested	(28,580	)		28.43
Balance at June 30, 2011	47,708		$	32.84

Stock Options

Stock options vest and expire over a period not to exceed seven years. As of June 30, 2011, the total unrecognized compensation expense related to non-vested stock options was $22,000, and the related weighted-average period over which it is expected to be recognized is approximately 1.6 years. Following is a summary of the activity of the stock options during the six-month period ended June 30, 2011:

			Weighted-		Average	Aggregate
			Average		Remaining	Intrinsic
			Exercise		Contractual	Value
	Shares		Price		Term Years	(In thousands)
Outstanding at December 31, 2010	36,628		$	18.36	1.56	$	717
Exercised	(6,584	)		14.47
Outstanding at June 30, 2011	30,044			19.21	1.29	$	557
Exercisable at June 30, 2011	26,704		$	19.03	1.26	$	500

The total intrinsic value of options exercised was $156,000 and $60,000 for the six-month periods ended June 30, 2011 and 2010, respectively. Following is a summary of the activity of the non-vested stock options during the six-month period ended June 30, 2011:

			Weighted- Average
	Shares		Grant Date Fair Value
Non-vested at December 31, 2010	12,440		$	2.94
Vested	(9,100	)		2.93
Non-vested at June 30, 2011	3,340		$	2.95

SARs

SARs vest over a three-year period, with one-third of the shares vesting and becoming exercisable each year on the anniversary date of the grant, and they expire 10 years from the original grant date. As of June 30, 2011, the total unrecognized compensation expense was $902,000 and the related weighted-average period over which it is expected to be recognized is 1.4 years. Following is a summary of the activity of the Company’s SARs program for the six-month period ended June 30, 2011:

			Weighted-		Average	Aggregate
			Average		Remaining	Intrinsic
			Exercise		Contractual	Value
	Shares		Price		Term Years	(In thousands)
Outstanding at December 31, 2010	241,755		$	27.34	7.38	$	2,562
Granted	75,016			36.24
Exercised	(14,396	)		12.20
Outstanding at June 30, 2011	302,375		$	29.55	7.93	$	2,481
Exercisable at June 30, 2011	171,158		$	27.47	4.07	$	1,762

Following is a summary of the activity of the non-vested SARs during the six-month period ended June 30, 2011:

			Weighted Average
	Shares		Grant Date Fair Value
Non-vested at December 31, 2010	141,201		$	27.18
Granted	75,016			36.24
Vested	(85,000	)		27.36
Non-vested at June 30, 2011	131,217		$	32.28

The Company uses the Black-Scholes pricing model to determine the fair value of the SARs at the date of grant. Following are the assumptions used to estimate the per-share fair value of SARs granted:

	Six Months Ended June 30,
	2011		2010
Risk free interest rate	2.70	%	3.33	%
Expected life	7 yrs.		7 yrs.
Expected volatility	27.86	%	30.00	%
Expected dividend yield	1.77	%	1.86	%

The risk-free interest rate is based on the zero-coupon U.S. Treasury yield for the period equal to the expected life of the SARs at the time of the grant. The expected life was derived using the historical exercise activity. The Company uses historical volatility for a period equal to the expected life of the rights using average monthly closing market prices of the Company’s stock as reported on The Nasdaq Global Market. The expected dividend yield is based on the Company’s current rate of annual dividends.