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Capital Stock
 12 Months Ended
Dec. 31, 2012
Capital Stock

NOTE G — CAPITAL STOCK

Long-term incentive plan

In June 2012, the shareholders of the Company approved an amendment to the Company’s 2000 Long-Term Incentive Plan (the “Plan”) to increase the shares available for grant by 700,000 shares to 4,200,000 shares. These shares of the Company’s common stock are available for grants to directors, officers, employees, consultants and service providers and affiliates in the form of stock options or other equity-based awards. The Plan authorizes the Board of Directors of the Company, or a duly appointed committee thereof, to issue incentive stock options, non-qualified options and other stock-based awards. Options that have been granted under the Plan expire over a range of five to ten years from the date of grant and vest over a range of up to five years from the date of grant. As of December 31, 2012, there were 756,832 shares available for the grant of awards.

Cash dividends

The Company did not pay cash dividends on its outstanding shares of common stock during the year ended December 31, 2010. In March 2011, the Company resumed the declaration of cash dividends on its outstanding shares of common stock.

 

Dividends declared in 2012 and 2011 are as follows:

 

Dividend per share

    Date declared    Date of record    Payment date

$0.025

    March 4, 2011    May 2, 2011    May 16, 2011

$0.025

    June 27, 2011    August 2, 2011    August 16, 2011

$0.025

    November 4, 2011    November 18, 2011    November 29, 2011

$0.025

    January 11, 2012    February 1, 2012    February 15, 2012

$0.025

    March 6, 2012    May 1, 2012    May 15, 2012

$0.025

    June 13, 2012    August 1, 2012    August 15, 2012

$0.025

    July 31, 2012    November 1, 2012    November 15, 2012

$0.025

    November 2, 2012    February 1, 2013    February 15, 2013

On March 12, 2013, the Board of Directors declared a quarterly dividend of $0.03125 per share payable on May 15, 2013 to shareholders of record on May 1, 2013.

Preferred stock

The Company is authorized to issue 100 shares of Series A Preferred Stock and 2,000,000 shares of Series B Preferred Stock, none of which is issued or outstanding at December 31, 2012.

Restricted stock

In 2012, 2011 and 2010, the Company issued an aggregate of 23,394, 21,400 and 10,020 restricted shares, respectively, of the Company’s common stock to its non-employee directors representing payment of a portion of their annual retainer. The total fair value of the restricted shares, based on the number of shares granted and the quoted market price of the Company’s common stock on the date of grant was $270,000 in 2012, $230,000 in 2011 and $150,000 in 2010. For all restricted stock grants, the restriction lapses one year from the date of grant and the stock is expensed over the one year period.

 

Stock options

A summary of the Company’s stock option activity and related information for the three years ended December 31, 2012, is as follows:

 

     Options     Weighted-
average
exercise
price		      Weighted-
average
remaining
contractual
life (years)		      Aggregate
intrinsic
value		  

Options outstanding at December 31, 2009

      1,786,667      $ 12.14         

Grants

      573,000        13.12         

Exercises

      (39,250 )      4.44         

Cancellations

      (101,217 )      13.65         
  

 

 

          

Options outstanding at December 31, 2010

      2,219,200        12.46         

Grants

      391,500        11.20         

Exercises

      (123,500 )      5.19         

Cancellations

      (11,450 )      13.29         
  

 

 

          

Options outstanding at December 31, 2011

      2,475,750        12.62         

Grants

      305,000        11.64         

Exercises

      (199,823 )      5.47         

Cancellations

      (52,750 )      12.82         
  

 

 

          

Options outstanding at December 31, 2012

      2,528,177        13.06         6.13       $ 4,525,905   
  

 

 

          

 

 

  

Options exercisable at December 31, 2012

      1,616,052        14.19         4.96       $ 3,813,485   
  

 

 

          

 

 

  

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value that would have been received by the option holders had all option holders exercised their stock options on December 31, 2012. The intrinsic value is calculated for each in-the-money stock option as the difference between the closing price of the Company’s common stock on December 31, 2012 and the exercise price.

The total intrinsic values of stock options exercised for the years ended December 31, 2012, 2011 and 2010 were $1,182,000, $830,400 and $389,100, respectively. The intrinsic value of a stock option that is exercised is calculated at the date of exercise.

The Company recognized stock compensation expense of $2.8 million, $2.8 million and $2.9 million for the years ended December 31, 2012, 2011 and 2010, respectively. The stock compensation expense recognized each year is equal to the grant date fair value of stock options vested during the year. Total unrecognized compensation cost related to unvested stock options at December 31, 2012, before the effect of income taxes, was $4.1 million and is expected to be recognized over a weighted-average period of 1.77 years.

The Company values stock options using the Black-Scholes option valuation model. The Black-Scholes option valuation model, as well as other available models, was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferable. The Black-Scholes option valuation model requires the input of highly subjective assumptions including the expected stock price volatility and risk-free interest rate. Because the Company’s stock options have characteristics significantly different from those of traded options, changes in the subjective input assumptions can materially affect the fair value estimate of the Company’s stock options. The weighted-average per share grant date fair value of stock options granted during the years ended December 31, 2012, 2011 and 2010 was $6.05, $5.69 and $7.96, respectively.

 

The fair value for these stock options was estimated at the date of grant using the following weighted-average assumptions:

 

     2012     2011     2010  

Historical volatility

      61 %      60 %      73 % 

Expected term (years)

      6.0        5.6        5.0   

Risk-free interest rate

      1.10 %      1.96 %      2.18 % 

Expected dividend yield

      0.86 %      0.89 %      0.00 %