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Stock Incentive Plans
 12 Months Ended
Dec. 31, 2012
Stock Incentive Plans [Abstract]  
Stock Incentive Plans
12. Stock Incentive Plans

The Company’s 2009 Stock Incentive Plan (the “2009 Plan”), which provides for stock-based awards to Company employees, non-employee directors and outside consultants or advisors, was approved by shareholders on May 13, 2009. No options have been issued to outside consultants or advisors. The number of shares of common stock reserved for issuance under the 2009 Plan is 1,000,000 of which the aggregate number of shares for which incentive stock options may be granted under the Plan is 900,000. No new grants of stock options may be made under the Company’s 2003 Stock Incentive Plan (the “2003 Plan”). At December 31, 2012, there were option awards covering 538,697 shares outstanding under the 2009 plan, together with the 2003 Plan and its predecessor, the 1993 Stock Incentive Plan. Outstanding options under all the plans generally expire ten years after the date of grant. Options are generally exercisable in four equal annual installments beginning one year after the date of grant.

 

The Company recognizes compensation expense for options awarded under its stock incentive plans based on the grant-date fair value. Compensation expense is attributed to earnings using the straight-line method over the requisite service period.

A summary of the status of the Company’s stock options at December 31, 2012, 2011 and 2010, together with changes during the periods then ended, is presented below:

 

                 
    Number
of
options		     Weighted
average
exercise
price		  

Outstanding at December 31, 2009

     315,319          

Options granted at market price

     87,000     $ 13.43  

Options exercised

     (2,750 )      6.29  
   

 

 

          

Outstanding at December 31, 2010

     399,569          

Options granted at market price

     289,200       16.06  

Options exercised

     (7,475 )      7.24  

Options cancelled

     (10,000 )      14.39  
   

 

 

          

Outstanding at December 31, 2011

     671,294          

Options granted at market price

     7,500       17.55  

Options exercised

     (131,997 )      13.98  

Options cancelled

     (8,100 )      13.85  
   

 

 

          

Outstanding at December 31, 2012

     538,697          
   

 

 

          

Available for grant at December 31, 2012

     586,900          
   

 

 

          

The following table presents information on stock options outstanding as of and for the years ended December 31, 2012 and 2011:

 

                 
    Year Ended
December 31,		  
(in thousands, except share data)       2012             2011      

Intrinsic value of options exercised in the period

   $ 895     $ 69  

 

                                 
($ in thousands, except share data)   Number
of
Shares		     Weighted
Average
Exercise
Price		     Weighted
Average
Remaining
Contractual
Term
(Years)		     Aggregate
Intrinsic
Value		  

Stock options:

                                

Outstanding December 31, 2011

     671,294     $ 14.48       6.9     $ 3,676  

Exerciseable at December 31, 2011

     283,344       13.62       4.2       1,796  

Outstanding December 31, 2012

     538,697       14.66       6.6       12,621  

Exerciseable at December 31, 2012

     241,772       13.60       4.8       5,922  

 

The aggregate intrinsic value of stock options represents the difference between the Company’s closing stock price at the end of the period and the relevant exercise price multiplied by the number of options outstanding at the end of the period at each such price.

The fair value of stock option awards as determined under the Black-Scholes option-pricing model was estimated with the following weighted-average assumptions:

 

                         
    2012     2011     2010  

Expected volatility

     65.9 %      65.9 %      58.8 % 

Risk free interest rate

     2.9 %      2.9 %      3.0 % 

Expected dividend yield

     2.5 %      2.3 %      2.4 % 

Expected term

     7.3 years       7.3 years       7.0 years  

Weighted average fair value per share

   $ 9.08     $ 7.20     $ 5.59  

There were no options granted during 2012, 2011 or 2010 below market price.

On July 2, 2012, the Company granted 47,500 restricted stock units at a fair value of $21.44 per share which represented the closing price of the Company’s stock on the date of grant. The restricted stock units vest in four equal annual installments beginning one year following the date of grant.

The following table summarizes stock-based compensation expense related to stock option and restricted stock unit awards (in thousands):

 

                         
    Year Ended
December 31,		  
    2012     2011     2010  

Stock-based compensation expense included in selling, general and administrative expenses

   $ 695     $ 473     $ 192  

Deferred income taxes

     272       188       76  
   

 

 

    

 

 

    

 

 

  

Stock-based compensation expense related to stock options and restricted stock units, net of tax

   $ 423     $ 285     $ 116  
   

 

 

    

 

 

    

 

 

  

As of December 31, 2012, unrecognized compensation expense related to stock options and restricted stock units was $2.6 million with a weighted average remaining contractual period of 4.4 years.

 

The following table summarizes information about stock options outstanding at December 31, 2012:

 

                                         

Options outstanding

     Options exercisable  

Exercise price range

   Number
of
shares		     Weighted-
average
exercise
price		     Weighted-
average
remaining
contractual
life (years)		     Exercisable
at
December
31, 2012		     Weighted-
average
exercise
price		  

$2.01 - $  2.58

     3,250     $ 2.21       .3       3,250     $ 2.21  

  8.82 -   17.55

     535,447       14.74       6.6       238,522       13.75  
   

 

 

                    

 

 

          
      538,697       14.66               241,772       13.60