Stock-Based Compensation

9 Months Ended

Sep. 30, 2014

Stock-Based Compensation [Abstract]

Stock-Based Compensation

Note 8 – Stock-Based Compensation

The Amended and Restated Omnibus Stock and Performance Compensation Plan (the “Omnibus Plan”) permits the issuance of up to 1,500,000 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 nine months ended September 30, 2014, 22,350 restricted shares and 37,213 SARs were granted under the Omnibus Plan.

Restricted Stock
Restricted shares granted prior to April 16, 2013 are amortized to expense over a three-year vesting period. Beginning on April 16, 2013, restricted shares granted to Company employees are amortized to expense over a three-year vesting period whereas restricted shares granted to members of the Board of Directors are amortized to expense over a one-year service period, with the exception of those shares granted in lieu of cash payments for retainer fees which are expensed in the period earned. As of September 30, 2014, the total unrecognized compensation expense related to non-vested restricted shares was $1,462,000, and the related weighted-average period over which it is expected to be recognized is approximately .77 years.

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

	Nine Months Ended
	September 30, 2014
	Shares		Fair Value
Balance at December 31, 2013	58,649		$	37.45
Granted	22,350		$	58.96
Vested	(30,043	)	$	35.33
Balance at September 30, 2014	50,956		$	48.13

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 September 30, 2014, the total unrecognized compensation expense was $1,013,000, and the related weighted-average period over which it is expected to be recognized is 1.3 years.

Following is a summary of the activity of the Company's SARs program for the nine-month period ended September 30, 2014:

					Weighted-		Average		Aggregate
					Average		Remaining		Intrinsic
					Exercise		Contractual		Value
	Shares				Price		Term Years		(In thousands)
Outstanding at December 31, 2013		343,445		$		32.01		7.33	$	12,137
Granted		37,213		$		61.64
Exercised		(7,605	)	$		34.77
Outstanding at September 30, 2014		373,053		$		34.91		6.84	$	2,421
Exercisable at September 30, 2014		248,071		$		29.40		6.01	$	2,978

Following is a summary of the activity of the non-vested SARs during the nine-month period ended September 30, 2014:

			Weighted-Average
	Shares		Grant Date Fair Value
Non-vested at December 31, 2013	177,128		$	37.11
Granted	37,213		$	61.64
Vested	(89,359	)	$	35.09
Non-vested at September 30, 2014	124,982		$	45.85

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:

	Nine Months Ended September 30,
	2014		2013
Risk-free interest rate	2.38	%		1.29	%
Expected life	7 yrs.			7 yrs.
Expected volatility	28.11	%		28.72	%
Expected dividend yield	1.30	%		1.71	%

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.