Stock Compensation

12 Months Ended

Dec. 31, 2013

Share-based Compensation [Abstract]

Stock Compensation

Stock Compensation

As of December 31, 2013, the Company has an Omnibus Incentive Plan under which 700,000 shares are reserved for restricted stock and stock options grants for employees as well as stock grants for directors. The plan was approved in 2011 and replaced all prior stock-based plans except for shares and options previously issued under those plans. As of December 31, 2013 and 2012, there were 505,000 shares and 552,000 shares of the Company’s Common Stock available for grant under the 2011 Omnibus Incentive Plan. The Company recognizes the cost of stock-based awards in net earnings for all of its stock-based compensation plans on a straight-line basis over the service period of the awards. The following sections describe the three types of grants in more detail.

Stock Options

The Company estimates the fair value of its option awards using the Black-Scholes option-pricing formula, and records compensation expense for stock options ratably over the stock option grant’s vesting period. Stock option compensation expense recognized by the Company for the year ended December 31, 2013 related to stock options was $0.5 million compared to $0.4 million in 2012 and $0.4 million in 2011.

The following table summarizes the transactions of the Company’s stock option plans for the three-year period ended December 31, 2013:

	Number of shares		Weighted-average exercise price
Options outstanding —
December 31, 2010	251,250		$	26.59
Options granted	31,500		$	36.59
Options exercised	(33,180	)	$	7.07
Options forfeited	(4,480	)	38.20
Options outstanding —
December 31, 2011	245,090		$	30.30
Options granted	45,100		$	36.15
Options exercised	(37,450	)	$	10.25
Options forfeited	(5,160	)	$	37.19
Options outstanding —
December 31, 2012	247,580		$	34.26
Options granted	23,258		$	51.29
Options exercised	(66,660	)	$	24.91
Options forfeited	(1,800	)	$	37.78
Options outstanding —
December 31, 2013	202,378		$	39.27
Price range $9.14 — $36.15
(weighted-average contractual life of 6.3 years)	67,560		$	32.58
Price range $36.16 — $38.41
(weighted-average contractual life of 6.8 years)	57,260		$	37.57
Price range $38.42 — $52.81
(weighted-average contractual life of 6.2 years)	77,558		$	46.35
Options outstanding - December 31, 2013	202,378
Exercisable options —
December 31, 2011	152,762		$	25.29
December 31, 2012	141,740		$	31.72
December 31, 2013	113,060		$	38.18

The following assumptions were used for valuing options granted in the years ended December 31:

	2013		2012
Per share fair value of options granted during the period	$20.34		$13.17
Risk-free interest rate	0.82	%	0.85	%
Dividend yield	1.31	%	1.77	%
Volatility factor	49.7	%	49.7	%
Weighted-average expected life in years	5.3		5.3

The expected life is based on historical exercise behavior and the projected exercise of unexercised stock options. The risk-free interest rate is based on the U.S. Treasury yield curve in effect on the date of grant for the respective expected life of the option. The expected dividend yield is based on the expected annual dividends divided by the grant date market value of the Company’s Common Stock. The expected volatility is based on the historical volatility of the Company’s Common Stock.

The following table summarizes the aggregate intrinsic value related to options exercised, outstanding and exercisable as of and for the years ended December 31:

	2013		2012
	(In thousands)
Exercised	$	1,743	$	950
Outstanding	$	3,083	$	3,371
Exercisable	$	1,846	$	2,316

As of December 31, 2013, the unrecognized compensation cost related to stock options was approximately $1.0 million, which will be recognized over a weighted average period of 2.3 years.

Director Stock Grant

 Non-employee directors receive an annual award of $50,000 worth of shares of the Company’s Common Stock under the shareholder-approved 2011 Omnibus Incentive Plan. The Company values stock grants for directors on the closing price of the Company’s stock on the day the grant was awarded. The Company records compensation expense for this plan ratably over the annual service period beginning May 1. Director stock compensation expense recognized by the Company for the year ended December 31, 2013, 2012 and 2011 was $0.4 million in each year. As of December 31, 2013, the unrecognized compensation cost related to the director stock award that is expected to be recognized over the remaining four months is estimated to be approximately $0.1 million.

Restricted Stock

The Company periodically issues nonvested shares of the Company's Common Stock to certain eligible employees, generally with a three-year cliff vesting period contingent on employment. The Company values restricted stock on the closing price of the Company's stock on the day the grant was awarded. The Company records compensation expense for these plans ratably over the vesting periods. Nonvested stock compensation expense recognized by the Company for the year ended December 31, 2013 was $0.9 million compared to $0.9 million in 2012 and $0.7 million in 2011.

The fair value of nonvested shares is determined based on the market price of the shares on the grant date.

	Shares		Fair value per share
Nonvested at December 31, 2010	47,900		$	41.52
Granted	28,650		$	36.59
Vested	(10,900	)	$	51.26
Forfeited	(2,350	)	$	39.30
Nonvested at December 31, 2011	63,300		$	37.69
Granted	30,325		$	36.15
Vested	(17,900	)	$	38.69
Forfeited	(1,900	)	$	21.77
Nonvested at December 31, 2012	73,825		$	37.01
Granted	21,425		$	51.12
Vested	(16,875	)	$	38.41
Forfeited	(3,900	)	$	37.69
Nonvested at December 31, 2013	74,475		$	40.54

As of December 31, 2013, there was $1.3 million of unrecognized compensation cost related to nonvested restricted stock that is expected to be recognized over a weighted average period of 1.3 years.