Stock Compensation

12 Months Ended

Dec. 31, 2011

Stock Compensation [Abstract]

Stock Compensation

Note 5    Stock Compensation

As of December 31, 2011, 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, 2011, there were 633,000 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, 2011 related to stock options was $409,000 compared to $454,000 in 2010 and $347,000 in 2009.

The following table summarizes the transactions of the Company’s stock option plans for the three-year period ended December 31, 2011:

	Number of shares			Weighted-average exercise price
Options outstanding —
December 31, 2008		348,930		$	13.87
Options granted		53,400		$	38.69
Options exercised		(135,920	)	$	8.68
Options forfeited		(2,400	)	$	27.53
Options outstanding —
December 31, 2009		264,010		$	21.44
Options granted		36,000		$	38.41
Options exercised		(48,760	)	$	7.42
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
Price range $5.75 — $24.94
(weighted-average contractual life of 2.7 years)		85,170		$	13.80
Price range $24.95 — $38.41
(weighted-average contractual life of 6.6 years)		88,020		$	36.01
Price range $38.42 — $52.81
(weighted-average contractual life of 7.0 years)		71,900		$	42.87
Exercisable options —
December 31, 2009		161,862		$	12.04
December 31, 2010		144,022		$	17.92
December 31, 2011		152,762		$	25.29

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

	2011			2010
Per share fair value of options granted during the period	$	9.80		$	10.98
Risk-free interest rate		1.98	%		2.40	%
Dividend yield		1.48	%		1.22	%
Volatility factor		48	%		49	%
Weighted-average expected life in years		2.3			2.4

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

	2011		2010
	(In thousands)
Exercised	$	560	$	1,549
Outstanding	$	1,332	$	4,613
Exercisable	$	1,312	$	3,861

As of December 31, 2011, the unrecognized compensation cost related to stock options is approximately $0.9 million, which will be recognized over a weighted average period of 2.4 years.

Nonvested Stock

Director Stock Grant Plan:    Non-employee directors receive an annual award of $45,000 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, 2011 was $336,000 compared to $315,000 of compensation expense recognized in 2010, and $290,000 recognized in 2009. As of December 31, 2011, the unrecognized compensation cost related to the nonvested director stock award that is expected to be recognized over the remaining four months is estimated to be approximately $111,000.

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, 2011 was $725,000 compared to $596,000 in 2010 and $624,000 in 2009.

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, 2008		73,666		$	33.05
Granted		20,100		$	38.69
Vested		(45,916	)	$	31.54
Forfeited		(1,250	)	$	32.68
Nonvested at December 31, 2009		46,600		$	37.09
Granted		18,500		$	38.41
Vested		(15,800	)	$	24.94
Forfeited		(1,400	)	$	39.28
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

As of December 31, 2011, there was $1.1 million of unrecognized compensation cost related to nonvested restricted stock that is expected to be recognized over a weighted average period of 1.5 years.