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Stock Based Compensation
 6 Months Ended
Jun. 30, 2013
Stock Based Compensation  
Stock Based Compensation

Note 11 - Stock Based Compensation

 

The Company’s 2012 Incentive Plan, approved by the Company’s stockholders in June 2012, permits the Company to grant, among other things, stock options, restricted stock, restricted stock units and performance share awards and any one or more of the foregoing to its employees, officers, directors and consultants.  A maximum of 600,000 shares of the Company’s common stock is authorized for issuance pursuant to this Plan, of which 112,650 have been issued and 50 have vested. An aggregate of 557,415 shares of restricted stock and restricted stock units are outstanding under the Company’s 2003 and 2009 equity incentive plans (collectively, the “Prior Plans”) and have not yet vested.  No additional awards may be granted under the Prior Plans.

 

The restricted stock grants are charged to general and administrative expense over the respective vesting periods based on the market value of the common stock on the grant date. Substantially all restricted stock awards made to date provide for vesting upon the fifth anniversary of the grant date and under certain circumstances may vest earlier.  For financial statement purposes, the restricted stock is not included in the shares shown as outstanding on the balance sheet until they vest; however dividends are paid on the unvested shares.

 

On September 14, 2010, the Board of Directors approved a Pay-for-Performance Program under the Company’s 2009 Incentive Plan and awarded 200,000 performance share awards in the form of restricted stock units (the “Units”). The holders of Units are not entitled to dividends or to vote the underlying shares until the Units vest and shares are issued. Accordingly, for financial statement purposes, the shares underlying the Units are not included in the shares shown as outstanding on the balance sheet.  If the defined performance criteria are satisfied in full at June 30, 2017, one share of the Company’s common stock will vest and be issued for each Unit outstanding and a pro-rata portion of the Units will vest and be issued if the performance criteria fall between defined ranges.  In the event that the performance criteria are not satisfied in whole or in part at June 30, 2017, the unvested Units will be forfeited and no shares of the Company’s common stock will be issued for those Units.  No Units were forfeited or vested in the six months ended June 30, 2013.

 

As of June 30, 2013 and December 31, 2012, there were no options outstanding under the Company’s equity incentive plans.

 

The following is a summary of the activity of the equity incentive plans (excluding, except as otherwise noted, the 200,000 Units):

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

Restricted share grants

 

—

 

—

 

112,650

 

109,450

 

Average per share grant price

 

—

 

—

 

$

21.59

 

$

16.77

 

Deferred compensation to be recognized over vesting period

 

—

 

—

 

$

2,432,000

 

$

1,835,000

 

Non-vested shares:

 

 

 

 

 

 

 

 

 

Non-vested beginning of period

 

470,015

 

408,510

 

407,460

 

348,385

 

Grants

 

—

 

—

 

112,650

 

109,450

 

Vested during period

 

—

 

—

 

(50,095

)

(49,325

)

Forfeitures

 

—

 

—

 

—

 

—

 

Non-vested end of period

 

470,015

 

408,510

 

470,015

 

408,510

 

 

 

 

 

 

 

 

 

 

 

Average per share value of non-vested shares (based on grant price)

 

$

14.22

 

$

12.59

 

$

14.22

 

$

12.59

 

 

 

 

 

 

 

 

 

 

 

Value of shares vested during the period (based on grant price)

 

$

—

 

$

—

 

$

876,000

 

$

1,208,000

 

 

 

 

 

 

 

 

 

 

 

The total charge to operations for all incentive plans, including the 200,000 Units, is as follows:

 

 

 

 

 

 

 

 

 

Outstanding restricted stock grants

 

$

335,000

 

$

260,000

 

$

702,000

 

$

542,000

 

Outstanding restricted stock units

 

34,000

 

24,000

 

64,000

 

44,000

 

Total charge to operations

 

$

369,000

 

$

284,000

 

$

766,000

 

$

586,000

 

 

As of June 30, 2013, there were approximately $4,938,000 of total compensation costs related to nonvested awards that have not yet been recognized, including $481,000 related to the Pay-for-Performance Program (net of forfeiture and performance assumptions which are re-evaluated quarterly). These compensation costs will be charged to general and administrative expense over the remaining respective vesting periods. The weighted average vesting period is approximately 3.1 years.