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Stock Option Plans and Restricted Stock Awards
 12 Months Ended
Dec. 31, 2012
Stock Option Plans and Restricted Stock Awards

19. STOCK OPTION PLANS AND RESTRICTED STOCK AWARDS

In May 2008, the shareholders approved the 2008 Equity Incentive Plan which authorizes the issuance of up to 3,949,891 shares of Company common stock for grants of stock options and restricted stock to employees, officers, consultants and directors of the Company and its subsidiaries, and expires in 2018. The plan authorizes the issuance of incentive and non-qualified stock options, as well as, restricted stock awards. The 2008 Equity Incentive Plan replaced the 2000 Stock Option Plan. No further grants will be made under the 2000 Stock Option Plan, but shares may continue to be issued under such plan pursuant to grants previously made. As of December 31, 2012, we have 1,016,586 outstanding options under our 2000 Stock Option Plan.

Stock Options

The Company expensed $1.1 million, $1.1 million, and $1.4 million for the years ended December 31, 2012, 2011 and 2010 respectively.

The estimated fair value of the options granted during 2012 and prior years was calculated using the Black-Scholes options pricing model. There were 248,000, 31,000 and 397,000 options granted during 2012, 2011, and 2010, respectively. The options will vest, in equal installments, over a five-year period. The fair value of each stock option granted in 2012, 2011, and 2010 was estimated on the date of grant using the following weighted-average assumptions:

 

     For the Year Ended December 31,  
     2012     2011     2010  

Dividend yield

      2.9 %      3.8 %      4.1 % 

Volatility

      51.0 %      50.3 %      49.1 % 

Risk-free interest rate

      1.1 %      1.3 %      1.6 % 

Expected life

      6.8 years        7.0 years        7.4 years   

Weighted average grant date fair value

    $ 4.44      $ 3.07      $ 2.76   

The expected volatility is solely based on the daily historical stock price volatility over the expected option life. The expected life of options granted is derived from the output of the option valuation model and represents the period of time an optionee will hold an option before exercising it. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury five-year constant maturity yield curve in effect at the time of the grant.

 

Option activity under the Company’s stock option plans as of and for the year ended December 31, 2012 was as follows:

 

     Number of Stock
Options
Outstanding
(In thousands)		     Weighted
Average
Exercise Price		      Weighted
Average
Remaining
Contractual Term
(in Years)		      Aggregate
Intrinsic Value
(In thousands)		  

Outstanding at January 1, 2012

      2,865      $ 10.41         

Granted

      248        11.71         

Exercised

      (292 )      8.74         

Forfeited or expired

      (217 )      11.26         
  

 

 

    

 

 

        

Outstanding at December 31, 2012

      2,604      $ 10.66         4.75       $ 2,296   
  

 

 

    

 

 

        

Vested or expected to vest at December 31, 2012

      2,470      $ 10.72         4.60       $ 2,120   

Exercisable at December 31, 2012

      1,861      $ 11.09         3.58       $ 1,369   

The weighted-average grant-date fair value of options granted was $4.44, $3.07 and $2.76 for 2012, 2011, and 2010, respectively. The total intrinsic value of options exercised during the year ended 2012, 2011 and 2010 was $618,000, $20,000 and $1.2 million, respectively. The Company estimates its forfeiture rates based on its historical experience. The forfeiture rate for 2012 was 6.0%.

As of December 31, 2012, there was $1.7 million of total unrecognized compensation cost related to nonvested options granted under the Plan. That cost is expected to be recognized over a weighted-average period of approximately 2.98 years. The total fair value of options vested was $1.1 million during 2012, $1.5 million in 2011 and $1.5 million during 2010. Cash received from stock option exercises was $2.6 million, $59,000, and $1.5 million in 2012, 2011, and 2010, respectively.

At December 31, 2012, options for the purchase of 2,603,942 shares of Company common stock were outstanding under the above plans, of which options to purchase 1,861,342 shares were exercisable at prices ranging from $7.68 to $15.53.

The Company has a policy of issuing new shares to satisfy share option exercises.

Restricted Stock

Under the 2008 Equity Incentive Plan, we granted 173,000 restricted stock awards during 2012. We did not grant restricted stock awards in 2011. The weighted average grant date fair value of restricted stock awards granted in 2012 was $11.10 per share. These awards will vest, in equal installments, over a five-year period.

Compensation cost is recognized over the requisite service period, which is five years, and amounted to $911,000, $1.1 million and $775,000 during the years ended December 31, 2012, 2011 and 2010, respectively. Total unrecognized compensation cost related to restricted stock awards was $2.3 million at December 31, 2012.

A summary of the Company’s non-vested restricted shares as of December 31, 2012 and changes during the year ended December 31, 2012, is presented below:

 

     Shares
(In thousands)		     Weighted
Average Fair
Value		  

Nonvested at January 1, 2012

      305      $ 8.47   

Granted

      173        11.10   

Vested

      (94 )      8.54   

Forfeited

      (54 )      10.07   
  

 

 

    

 

 

  

Nonvested at December 31, 2012

      330      $ 9.57   
  

 

 

    

 

 

  

Under the 2008 Equity Incentive Plan, 1,589,127 shares of common stock were available for the granting of future options and restricted stock awards as of December 31, 2012.