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Stock-Based Compensation
 12 Months Ended
Dec. 31, 2012
Stock-Based Compensation

NOTE 16 – STOCK-BASED COMPENSATION

The Company has three stock-based compensation plans (the Plans) as described below. Total compensation cost that has been charged against income for the Plans was $11, $40, and $6 for 2012, 2011 and 2010, respectively. The total income tax benefit was $1, $8, and $2, respectively.

The Original Plans, which are stockholder-approved, provide for stock option grants and restricted stock awards to directors, officers and employees. The 1999 Stock-Based Incentive Plan, which expired July 13, 2009, provided 38,778 shares for stock option grants and 15,511 shares for restricted stock awards. The 2003 Equity Compensation Plan (2003 Plan) as amended and restated, provided an aggregate of 100,000 shares for stock option grants and restricted stock awards, of which up to 30,000 shares could be awarded in the form of restricted stock awards. The 2009 Equity Compensation Plan, which was approved by stockholders on May 21, 2009, replaced the 2003 Plan and provides 200,000 shares, plus any remaining shares available to grant or that are later forfeited or expire under the 2003 Plan, that may be issued as stock option grants, stock appreciation rights or restricted stock awards.

 

Stock Options

The Plans permit the grant of stock options to directors, officers and employees for up to 338,777 shares of common stock. Option awards are granted with an exercise price equal to the market price of the Company’s common stock on the date of grant, generally have vesting periods ranging from one to three years, and are exercisable for ten years from the date of grant. Unvested stock options immediately vest upon a change of control.

The fair value of each option award is estimated on the date of grant using a closed form option valuation (Black-Scholes) model that uses the assumptions noted in the table below. Expected volatilities are based on historical volatilities of the Company’s common stock. The Company uses historical data to estimate option exercise and post-vesting termination behavior. Employee and management options are tracked separately. The expected term of options granted is based on historical data and represents the period of time that options granted are expected to be outstanding, which takes into account that the options are not transferable. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of the grant.

The fair value of options granted was determined using the following weighted-average assumptions as of grant date.

 

     2012     2011     2010  

Risk-free interest rate

      1.23 %      2.98 %      2.62 % 

Expected term (years)

      7        7        7   

Expected stock price volatility

      78 %      46 %      46 % 

Dividend yield

      0 %      1.41 %      3.77 % 

 

A summary of stock option activity in the Plans for 2012 follows:

 

     Shares     Weighted
Average
Exercise Price		      Weighted
Average
Remaining
Contractual Term
(Years)		      Intrinsic Value  

Outstanding at beginning of year

      43,298      $ 24.87         

Granted

      205,000        1.28         

Exercised

      —          —           

Expired

      —          —           

Cancelled or Forfeited

      (13,602 )      24.48         
  

 

 

    

 

 

        

Outstanding at end of year

      234,696      $ 4.29         9.3       $  —     
  

 

 

    

 

 

     

 

 

     

 

 

  

Expected to vest

      209,080      $ 1.35         9.9       $ —     
  

 

 

    

 

 

     

 

 

     

 

 

  

Exercisable at end of period

      25,616      $ 28.27         4.9       $ —     
  

 

 

    

 

 

     

 

 

     

 

 

  

During the year ended December 31, 2012, there were 13,602 stock options canceled or forfeited. Expense associated with unvested forfeited shares is reversed.

Information related to the stock option Plans during each year follows. There were no options exercised in 2012 or 2011.

 

     2012      2011      2010  

Intrinsic value of options exercised

    $ —         $ —         $ —     

Cash received from option exercises

      —           —           —     

Tax benefit realized from option exercises

      —           —           —     

Weighted average fair value of options granted

    $ 0.91       $ 0.75       $  0.31   

As of December 31, 2012, there was $149 of total unrecognized compensation cost related to nonvested stock options granted under the Plans. The cost is expected to be recognized over a weighted-average period of 1.9 years. Substantially all of the 209,080 nonvested stock options at December 31, 2012 are expected to vest.

 

Restricted Stock Awards

The Plans permit the grant of restricted stock awards to directors, officers and employees. Compensation is recognized over the vesting period of the awards based on the fair value of the stock at grant date. The fair value of the stock was determined using the closing share price on the date of grant and shares generally have vesting periods of one to three years. There were 39,342 shares available to be issued under the Plans at December 31, 2012. There were no shares issued in 2012 or 2011.

A summary of changes in the Company’s nonvested restricted shares for the year follows:

 

Nonvested Shares

    Shares     Weighted
Average Grant-
Date Fair Value		  

Nonvested at January 1, 2012

      4,800      $ 6.88   

Granted

      —          —     

Vested

      (2,400 )      6.88   

Forfeited

      (1,000 )      7.25   
  

 

 

    

 

 

  

Nonvested at December 31, 2012

      1,400      $ 6.61   
  

 

 

    

 

 

  

As of December 31, 2012, there was $2 of total unrecognized compensation cost related to nonvested shares granted under the Plans. The cost is expected to be recognized over a weighted-average period of 0.57 years. The total fair value of shares vested during the years ended December 31, 2012, 2011 and 2010 was $4, $14 and $24, respectively.