Stock-Based Compensation

6 Months Ended

Jun. 30, 2013

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Note 8. Stock-Based Compensation

Stock compensation plans: The Company has the 2007 Management Incentive Plan (the “2007 Stock Plan”) and the 2011 Stock Incentive Plan (the “2011 Stock Plan”). Under these plans, 1,987,412 shares of authorized common stock have been reserved for issuance pursuant to grants approved by the Company’s Board of Directors (the “Board”). All grants are made at 100% of the fair value at the date of grant. Options granted under the 2007 Stock Plan vest at 20% at the date of grant and 20% on the anniversary date of the grant each year thereafter for 4 years. Options granted under the 2011 Stock Plan vest at 20% each year for 5 years. In addition, these options vest and become exercisable in full upon the occurrence of a Change of Control (as defined in the Option Award Agreements). Participants who are awarded options must exercise their options within a maximum of 10 years of the grant. At June 30, 2013, there were 987,790 shares available for grant under the 2007 Stock Plan and 2011 Stock Plan, collectively.

The Company recognizes compensation expense in the financial statements for all stock-based payments granted based upon the fair value.

There were no option grants during the three months ended June 30, 2013 or June 30, 2012. The fair value of option grants is estimated on the grant date using the Black-Scholes option-pricing model with the following assumptions for option grants during the six months ended June 30, 2013 and 2012:


	The Six Months Ended June 30,
	2013			2012
Expected volatility		48.49	%		48.49	%
Expected dividends		0.00	%		0.00	%
Expected term (in years)		10.00			10.00
Risk-free rate		1.76	%		2.20	%
Vesting period (in years)		5			5

Expected volatility is based on the historic volatility of a publicly traded company in the same industry. The risk free interest rate is based on the U.S. Treasury yield at the date the Board approved the option awards for the period (9 to 10 years) over which options are exercisable.

The Company recorded stock-based compensation expense in the amount of $179 and $142 for the three months ended June 30, 2013 and 2012 and $358 and $165 for the six months ended June 30, 2013 and 2012, respectively. As of June 30, 2013, unrecognized stock-based compensation expense to be recognized over future periods approximated $2,834. This amount will be recognized as expense over a period of 4.0 years. The total income tax benefit recognized in the income statement for the stock-based compensation arrangements was $69.8 and $64.3, for the three months ended June 30, 2013 and 2012 and $139.6 and $73.3 for the six months ended June 30, 2013 and 2012, respectively.

A summary of the status of the Company’s stock option plan is presented below (shares in thousands):


	Number of Shares			Weighted Average Price Per Share		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Options outstanding at January 1, 2013		887		$	8.66
Granted		100			16.73
Exercised		(98	)		5.46
Forfeited		—			—

Options outstanding at June 30, 2013		889		$	9.92		6.0	$	13,403

Options exercisable at June 30, 2013		561		$	6.64		4.2	$	10,296

Available for grant at June 30, 2013		988

At June 30, 2013, the options have a weighted-average remaining contractual life of 6.0 years.

The intrinsic value was calculated by applying the Company’s own market value for June 30, 2013. The total intrinsic value of options exercised was $1,423 for the six months ended June 30, 2013.

Information on the activity of options for the six months ended June 30, 2013 follows (shares in thousands):


	2013
	Shares			Weighted Average Grant Date Fair Value
Non-vested options at January 1, 2013		285		$	15.00
Granted		100			16.73
Vested		(57	)		15.00
Forfeited		—			—

Non-vested options at June 30, 2013		328		$	15.53

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

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