Share-Based Payments

6 Months Ended

Jun. 30, 2013

Note 16 — Share-Based Payments

The Company’s 2002 Stock Award and Incentive Plan (the “Plan”) provides for the awarding of stock options and restricted stock to employees, officers and non-employee directors. Under the Plan, the Company grants directors, certain executives and other key employees restricted common stock, with vesting contingent upon completion of specified service periods ranging from one to five years. The Company also grants certain executives performance-based awards, with vesting contingent upon the Company’s achievement of specified financial goals. The Plan is more fully described in Notes 14 and 17 to the Consolidated Financial Statements in the Company’s 2012 Annual Report on Form 10-K.

The following table summarizes the total share-based compensation expense and related tax benefits recognized for the three and six months ended June 30, 2012 and 2013 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2013		2012		2013
Restricted stock compensation expense	$	468	$	183	$	806	$	391
Tax benefit related to restricted stock compensation	$	177	$	53	$	304	$	132

Stock option activity pursuant to the Plan for the six months ended June 30, 2013 is summarized as follows:

	Plan Stock Options
	Number of Shares		Weighted Average Exercise Price
Outstanding, December 31, 2012		134,644	$	19.82
Granted		―		―
Exercised		―		―
Cancelled		―		―
Outstanding, June 30, 2013		134,644		19.82

Restricted stock award activity pursuant to the Plan for the three months ended June 30, 2013 is summarized as follows:

	Restricted Stock Awards
	Number of Shares		Weighted Average Grant Price

Outstanding, December 31, 2012		95,315	$	16.75
Awarded		339,770		12.52
Released		41,706		14.78
Forfeited		7,490		13.67
Outstanding, June 30, 2013		385,889		13.30

Non-Employee Stock Warrants

In September 2012, the Company granted 1,500,000 stock warrants with an exercise price of $16.28 per share and a five year term to a third party as partial consideration for the exclusive right to use certain recognition technology in connection with our toy products. The exercise price of the warrants is equal to the volume-weighted average price of our common stock over the five trading days preceding the date of grant. All warrants vested upon grant and are exercisable over the term of the warrants.

At December 31, 2012 and June 30, 2013, the Company had 1,500,000 stock warrants outstanding with an exercise price of $16.28 per share and an expiration date of September 12, 2017.

We measure the fair value of our warrants granted on the measurement date. The fair value of the 2012 stock warrant is capitalized as an intangible asset and will be amortized to expense in our consolidated statements of operations when the related product is released and the related net sales are recognized, which is expected to be in the third quarter of 2013. For the three and six months ended June 30, 2012 and 2013 there was no amortization expense related to the warrants.

- 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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