Note 8 - Employee Benefit Plans

9 Months Ended

Sep. 30, 2012

Pension and Other Postretirement Benefits Disclosure [Text Block]

Note 8.  Employee Benefit Plans.

Post Retirement Benefits.  The Company and its subsidiaries provide certain post-retirement health care and life insurance benefits to certain retired employees.  The liability for such benefits is unfunded.  During the quarter ended September 30, 2012, the Company made a change to the plan to terminate these health care and life insurance benefits at retirement age for non-union employees who were not at least 60 years old on September 1, 2012.

The effect of this plan change was a negative plan amendment of $1,165 and a $79 curtailment.  The negative plan amendment includes $1,021 for health care benefits and $144 for life insurance benefits.  These amounts will be recognized into income over the average remaining years of service to retirement and the average expected lifetime remaining for health care benefits and life insurance benefits, respectively.  The accounting impact for the curtailment results in immediate recognition of a benefit related to unamortized prior service cost of $79.

The components of the Net Periodic Benefit Cost (Benefit) for the quarter and year to date periods ended September 30, 2012 and 2011, respectively, are as follows:

	Quarter Ended						Year to Date Ended
	September 30, 2012			September 30, 2011			September 30, 2012			September 30, 2011
Service cost	$	48		$	56		$	159		$	168
Interest cost		52			102			169			306
Amortization of prior service cost		(57	)		(4	)		(65	)		(12	)
Prior service cost recognized due to Curtailment		(79	)		-			(79	)		-
Loss		-			22			-			66
Total post-retirement benefit cost (benefit)	$	(36	)	$	176		$	184		$	528

The Company previously disclosed in its financial statements for the six-month transition period ended December 31, 2011, amounts expected to be paid to plan participants.  Based on the change to the plan described above, expected benefit payments have changed.  The previously disclosed and updated expected benefits are detailed below.

	Expected Benefit Payments
	As previously disclosed in Form 10-K for transition period ended December 31, 2011		Updated disclosure based on effects of negative plan amendment
2012	$	623	$	623
2013		563		563
2014		424		410
2015		401		351
2016		425		335
2017-2021		2,931		2,218

Pension Benefits.  The Company and its subsidiaries also provide defined retirement benefits to certain employees covered under collective bargaining agreements.  Under the collective bargaining agreements, the Company’s pension funding contributions are determined as a percentage of wages paid.  The funding is divided between the defined benefit plans and a union 401(k) plan.  It has been management’s policy to fund the defined benefit plans in accordance with the collective bargaining agreements.  The collective bargaining agreements allow the plans’ trustees to develop changes to the pension plan to allow benefits to match funding, including reductions in benefits.  The benefits under these pension plans are based upon years of qualified credited service; however benefit accruals under the Atchison plan were frozen as of October 15, 2009 and benefit accruals under the Pekin plan were frozen as of December 10, 2009.

The components of the Net Periodic Benefit Cost/(Income) for the quarter and year to date periods ended September 30, 2012 and 2011, respectively, are as follows:

	Quarter Ended						Year to Date Ended
	September 30, 2012			September 30, 2011			September 30, 2012			September 30, 2011
Service cost	$	-		$	-		$	-		$	-
Interest cost		51			53			153			177
Expected return on plan assets		(57	)		(59	)		(171	)		(147	)
Prior service cost		-			-			-			-
Recognition of net loss		28			5			84			102
Total pension benefit cost	$	22		$	(1	)	$	66		$	132

The Company previously disclosed in its financial statements for the six-month transition period ended December 31, 2011, the assumptions used to determine accumulated benefit obligation.

The Company has made no employer contributions to pension plan or union 401(k) during the quarter ended September 30, 2012.

Equity-Based Compensation Plans.  The Company previously disclosed in its financial statements for the six-month transition period ended December 31, 2011, a description of the Company’s equity-based compensation plans.

The Company’s equity-based compensation plans provide for the awarding of shares of restricted common stock (“restricted stock” or “nonvested shares”) for senior executives and certain salaried employees as well as outside directors.  As of September 30, 2012, 956,207 shares of restricted common stock (net of forfeitures) remained outstanding under the Company’s long-term incentive plans.  Compensation expense related to these awards is based on the market price of the stock on the date the Board of Directors approved the grant and is amortized over the vesting period of the restricted stock award. 

In connection with the Reorganization, the Director’s Stock Plan was amended to provide for grants in the form of restricted stock units instead of restricted stock.  In contrast to restricted stock awards, shares will not be issued (and participants will not have voting or dividend rights) before awards vest and are issued.  However, the Director’s Stock Plan provides for the payment of cash dividend equivalents when dividends are paid to stockholders.

The Company has heretofore made annual restricted stock awards under its 2004 Incentive Plan.  At meetings held on March 1, 2012, the Human Resources and Compensation Committee and the Board of Directors approved awards in the form of restricted stock units, consisting of 129,000 units awarded as part of the Company’s existing long-term incentive program and 45,000 units awarded as a special bonus for effort in connection with the acquisition of the distillery operations of LDI that was completed in December 2011.  These awards, which had a $6.40 per unit fair value and aggregated $1,114, are being amortized over a 5-year vesting period.  These awards entitle participants to receive an aggregate of 174,000 shares of stock following the end of the 5-year vesting period.  Full or pro rata accelerated vesting generally may occur upon a “change in the ownership” of the Company or the subsidiary for which a participant performs services,  a “change in effective control” of the Company or a “change in the ownership of a substantial portion of the assets” of the Company (in each case, generally as defined in the Treasury regulations under Section 409A of the Internal Revenue Code),  or if employment of a participant is terminated as a result of death, disability, retirement or termination without cause. Participants have no voting or dividend rights under the awards; however, the awards provide for payment of cash dividend equivalents when dividends are paid to stockholders.

In June 2012, under the Directors’ Stock Plan, 31,264 restricted stock units were awarded to outside directors of the Company.  These awards, which had a $3.14 per unit fair value and aggregated $98, are being amortized over a 3-year vesting period.

As of September 30, 2012, the Company was authorized to issue 40,000,000 shares of Common Stock.  In connection with the Reorganization described in Note 1, Processing’s 1,414,379 treasury shares were canceled, which also reduced the number of issued shares by 1,414,379.  The Company accounted for the cancellation of treasury stock as a charge to retained earnings, which reduced both treasury stock and retained earnings by $7,132.  The Company had historically used this treasury stock for issuance of Common Stock under the Company’s equity-based compensation plans.  With the retirement of these treasury shares, the Company reserved certain authorized shares for issuance of Common Stock under its equity-based compensation plans.  Reserved shares of Common Stock at September 30, 2012 were as follows:

Stock options granted but not exercised	42,000
Restricted stock to non-employees  (authorized but not granted)	71,061
Restricted stock to employees and executives (authorized but not granted)	1,416,778
Total	1,529,839