Share-Based Compensation Plans

3 Months Ended

Mar. 31, 2013

Share-Based Compensation Plans

Share-Based Compensation Plans

Note 10.  Share-Based Compensation Plans

As of March 31, 2013, the Company had two share-based employee compensation plans, which are more fully described in Note 10. Share-Based Compensation Plans, of the consolidated financial statements in the Company’s Annual Report filed on Form 10-K for the year ended December 31, 2012.  These plans include the “1997 Stock Option Plan” and the “2005 Equity Based Compensation Plan.”

The following table provides a summary of the expenses the Company has recognized related to share-based compensation for the periods indicated below:

	For the Three Months Ended
	March 31,
(dollar amounts in thousands)	2013		2012
Share-based compensation expense:
Stock option expense	$	61	$	13
Restricted stock expense	73		26
Total expense	$	134	$	39
Unrecognized compensation expense:
Stock option expense	$	583	$	272
Restricted stock expense	640		251
Total unrecognized expense	$	1,223	$	523

At March 31, 2013, there was a total of $0.6 million of unrecognized compensation expense related to non-vested stock options. That expense is expected to be recognized over a weighted-average period of 3.1 years.

The Company periodically grants restricted share awards to employees and directors. These restricted shares generally vest over a period of one to five years depending on the terms of the grant.  Recipients of restricted shares have the right to vote all shares subject to such grant, and receive all dividends with respect to such shares, whether or not the shares have vested.  Recipients do not pay any cash consideration for the shares.  The total unrecognized compensation expense related to restricted share awards at March 31, 2013 was $0.6 million.  That expense is expected to be recognized over the next 3.1 years.

The following table provides a summary of activity related to options granted, exercised, and forfeited:

	Options Outstanding				Options
	Number		Weighted Average		Available for
	of Shares		Exercise Price		Grant
Balance, December 31, 2012	523,129		$	6.11	1,715,616
Granted	46,685		5.80
Forfeited	(6,596	)	5.73
Expired	(4,275	)	4.62
Exercised	(1,180	)	4.37
Balance, March 31, 2013	557,763		$	6.10	1,669,073

The following table provides a summary of activity related to restricted stock granted, vested and forfeited:

	Number of		Average Grant
	Shares		Date Fair Value
Balance December 31, 2012	196,850		$	4.27
Granted	25,862		5.80
Vested	(1,050	)	12.14
Forfeited	(2,611	)	3.83
Balance March 31, 2013	219,051		$	4.42

The aggregate intrinsic value in the following table represents the total pre-tax intrinsic value, which is subject to change based on the fair market value of the Company’s stock.  The aggregate intrinsic value of options exercised was $2 thousand for the year to date period ended March 31, 2013.  The following table provides a summary of the aggregate intrinsic value of options vested and expected to vest and exercisable:

				Weighted Average
		Weighted		Remaining	Aggregate
		Average		Contractual Life	Intrinsic
	Shares	Exercise Price		(Years)	Value
Vested or expected to vest	534,540	$	6.13	7.435	$	551,375
Exercisable at March 31, 2013	258,589	$	7.35	5.784	$	346,358

The following table presents the assumptions used in the calculation of the weighted average fair value of options granted:

	For the Three Months Ended
	March 31,
	2013		2012
Expected volatility	55.30%		52.08%
Expected term (years)	6		7
Dividend yield	0.00%		0.00%
Risk free rate	1.14%		1.31%
Weighted-average grant date fair value	$	3.01	$	2.09