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Compensation Plan
 12 Months Ended
Dec. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Compensation Plan

13.       Compensation Plans

 

In April 2007, the Company adopted and the shareholders approved the 2007 Stock Incentive Plan (the “2007 SIP”) under which employees, independent contractors, and non-employee directors may be granted stock options, restricted stock, deferred stock awards, restricted stock units (“RSU’s”), and stock appreciation rights, any of which may or may not require the achievement of performance objectives. Vesting requirements are determined by the Compensation Committee of the Board of Directors. The Company reserved 2,550,000 shares for issuance under the 2007 SIP. At December 31, 2016, an aggregate of 472,000 shares remain available for grant under the 2007 SIP.

 

Compensation expense related to stock options is recognized based on the grant-date fair value of the awards estimated using the Black-Scholes option pricing model. Compensation expense related to deferred stock, restricted stock, and restricted stock units is recognized based on the grant-date fair value of the Company’s common stock, using either the actual share price or estimated using the Monte Carlo valuation model The total stock-based compensation cost included in the Statements of Income was $3.1 million, $4.5 million, and $5.6 million in 2016, 2015, and 2014, respectively.

 

Stock Options

 

There were no stock options granted in 2016, 2015 or 2014.

 

The following table summarizes the stock option activity of the 2007 SIP:

 

   Shares   Weighted
Average
Exercise
Price		   Weighted
Average
Grant Date
Fair Value		   Weighted
Average
Remaining
Contractual
Life (Years)		 
Outstanding at December 31, 2013   57,221    8.66    6.65    5.0 
         Granted   —    —    —    — 
         Exercised   (16,244)   8.25    7.54    3.9 
         Canceled   —    —    —    — 
Outstanding at December 31, 2014   40,977    8.82    6.29    4.1 
         Granted   —    —    —    — 
         Exercised   (29,139)   8.77    6.13    3.1 
         Canceled   —    —    —    — 
Outstanding at December 31, 2015   11,838    8.95    6.69    3.3 
         Granted   —    —    —    — 
         Exercised   —    —    —      
         Canceled   —    —    —    — 
Outstanding at December 31, 2016   11,838    8.95    6.69    2.3 
Exercisable Options Outstanding at December 31, 2016   11,838    8.95    6.69    2.3 
Non-Vested Options Outstanding at December 31, 2016   —    —    —    — 

 

At December 31, 2016, the aggregate intrinsic value of all options, including exercisable options, was $0.5 million.

 

Deferred Stock

 

Deferred stock awards vest based on the passage of time or the Company’s attainment of performance objectives. Upon vesting, these awards convert one-for-one to common stock.

 

In 2016, 3,881 deferred stock awards were issued to non-employee directors that will vest in May 2017 and 5,292 deferred stock awards were issued to non-employee directors that will vest in May 2019.

 

In 2015, 4,000 deferred stock awards were issued to non-employee directors that vested in April 2016 and 5,370 deferred stock awards were issued to non-employee directors that will vest in April 2018.

 

In 2014, 3,711 deferred stock awards were issued to non-employee directors that vested in April 2015 and 7,002 deferred stock awards were issued to non-employee directors that will vest in April 2017.

 

Compensation expense related to these awards is amortized ratably over the vesting period. Compensation expense related to these awards was $0.6 million, $0.6 million and $0.6 million in 2016, 2015, and 2014, respectively.

 

At December 31, 2016, there was $0.6 million of unrecognized compensation cost related to deferred stock that is expected to be recognized over a period of three years.

 

Restricted Stock Units

 

The Company grants restricted stock units in lieu of incentive stock options to senior employees. Some of these RSU’s are retention awards and have only time-based vesting. Other RSU’s have a vesting “double trigger.” The vesting of these RSU’s is dependent on the achievement of corporate objectives established by the Compensation Committee of the Board of Directors and the passage of time.

 

During 2016, 61,000 restricted stock units were issued. Compensation costs related to these restricted stock units was $3.4 million, of which $0.8 million was recognized in 2016. The remaining costs will be recognized ratably over the remaining periods required before the units vest, which range from 27 to 49 months.

 

During 2015, 76,000 restricted stock units were issued. Compensation costs related to these restricted stock units was $1.9 million, of which $0.5 million was recognized in 2015. The remaining costs will be recognized ratably over the remaining periods required before the units vest, which range from 27 to 49 months.

 

During 2014, 59,000 restricted stock units were issued. Compensation costs related to these restricted stock units was $3.8 million, of which $1.0 million was recognized in 2014. The remaining costs are not being recognized since the required performance criteria is not expected to be attained.

 

At December 31, 2016, there was $3.4 million of unrecognized compensation cost related to restricted stock units that is expected to be recognized over a period of 4.0 years.