• Filing Date: 2013-03-14
  • Form Type: 10-K
  • Description: Annual report
v2.4.0.6
Stock-Based Compensation
12 Months Ended
Dec. 31, 2012
Stock-Based Compensation [Abstract]  
Stock-Based Compensation

Note 12 — Stock-Based Compensation

Stock Options

Outstanding stock options granted under the 2007 Plan vest over periods ranging from immediately vested to five years and are exercisable over the contractual term of ten years.

 

A summary of the activity in the Company’s 2007 Plan for the years ended December 31, 2012, 2011 and 2010 is as follows (dollars in thousands, except per share amounts):

 

                                 
    Number of
Options
    Weighted
Average
Exercise
Price
    Weighted
Average
Remaining
Contractual
Term
    Aggregate
Intrinsic
Value
 
         

Outstanding at December 31, 2009

    1,130,000     $ 2.66                  

Exercised

    (260,000   $ 2.50                  
   

 

 

                         

Outstanding at December 31, 2010

    870,000     $ 2.71       6.5 years     $ 4,675  

Issued

    30,000     $ 6.30                  

Forfeited

    (24,800   $ 2.50                  

Exercised

    (255,200   $ 2.50                  
   

 

 

                         

Outstanding at December 31, 2011

    620,000     $ 2.97       5.7 years     $ 3,122  

Exercised

    (340,000   $ 3.03                  
   

 

 

                         

Outstanding at December 31, 2012

    280,000     $ 2.91       4.9 years     $ 5,007  
   

 

 

                         

Exercisable at December 31, 2012

    260,000     $ 2.65       4.6 years     $ 4,717  
   

 

 

                         

The following table summarizes information about options granted, exercised, and the fair value of vested options for the years ended December 31, 2012, 2011 and 2010:

 

                         
    2012     2011     2010  

Options granted

    —         —         30,000  

Weighted-average grant-date fair value

    n/a       n/a     $ 1.70  
       

Options exercised

    340,000       255,200       260,000  

Total intrinsic value of exercised options

  $ 3,648,000     $ 1,184,000     $ 1,097,000  

Tax benefits realized

  $ 1,161,000     $ 265,000     $ 301,000  
       

Total fair value of vested options

  $ 22,000     $ 76,000     $ 196,000  

During the year ended December 31, 2012, a total of 340,000 options were exercised of which 227,003 options were net settled by surrender of 72,592 shares. During the year ended December 31, 2011, a total of 255,200 options were exercised, which includes 30,000 options exercised and net settled by surrender of 9,317 shares. Compensation expense recognized for the years ended December 31, 2012, 2011 and 2010 totaled approximately $68,000, $27,000 and $87,000, respectively. At December 31, 2012, there was approximately $25,000 of unrecognized compensation expense related to nonvested stock options granted under the plan. The Company expects to recognize the remaining compensation expense over a weighted-average period of 16 months. Deferred tax benefits related to stock options for the years ended December 31, 2012, 2011 and 2010 were immaterial.

 

No options were granted during the years ended December 31, 2012 and 2010. In 2011, 30,000 options were granted on August 26, 2011, with fair value estimated on the date of grant using the following assumptions and the Black-Scholes option pricing model:

 

         

Expected dividend yield

    6.3

Expected volatility

    53.3

Risk-free interest rate

    0.97

Expected life (in years)

    5.00  

Restricted Stock Awards

During 2012, the Company granted restricted stock awards to certain executive officers and employees in connection with their service to the Company. The terms of the Company’s restricted stock grants include both service and market-based conditions. The fair value of the awards with market-based conditions is determined using a Monte Carlo simulation method which calculates many potential outcomes for an award and then establishes fair value based on the most likely outcome. The determination of fair value with respect to the awards with only service-based conditions is based on the value of the Company’s stock on the grant date.

Information with respect to nonvested restricted stock awards, which were granted in April and May 2012 under the 2007 Plan and in December 2012 under the 2012 Plan, is as follows:

 

                 
    Number of
Restricted
Stock
Awards
    Weighted
Average
Grant Date
Fair Value
 
     

Nonvested at December 31, 2011

    —         —    

Granted

    246,320     $ 14.54  
   

 

 

         

Nonvested at December 31, 2012

    246,320     $ 14.54  
   

 

 

         

The Company recognized compensation expense of $776,000 in the year ended December 31, 2012. At December 31, 2012, there was approximately $2.8 million of total unrecognized compensation expense related to nonvested restricted stock arrangements granted under the Company’s 2007 Plan and 2012 Plan. For the year ended December 31, 2012, the Company recognized deferred tax benefits of approximately $299,000 related to restricted stock awards.

The Company expects to recognize the remaining compensation expense over a weighted-average period of 30 months. No restricted stock was granted during the years ended December 31, 2011 and 2010. The following presents assumptions used in a Monte Carlo simulation model to determine the fair value of the awards with market-based conditions:

 

     

Expected dividends per share

  $0.80

Expected volatility

  36.7 – 50.0%

Risk-free interest rate

  0.1 – 1.2%

Estimated cost of capital

  11.9 – 12.1%

Expected life (in years)

  6.00