STOCK-BASED COMPENSATION PLANS

12 Months Ended

Dec. 31, 2012

STOCK-BASED COMPENSATION PLANS

STOCK-BASED COMPENSATION PLANS

19. STOCK-BASED COMPENSATION PLANS

The 2011 Equity Compensation Plan (the “Plan”) permits the granting of a combination of Restricted stock awards and incentive and non-qualified stock options (“Stock Options”) to employees and directors. A total of 1.4 million shares was authorized under the Plan.  Awards may be granted as either Restricted Stock or Stock Options provided that any shares that are granted as Restricted Stock are counted against the share limit set forth as (1) three for every one share of Restricted Stock granted and (2) one for every one share of Stock Option granted.  As of year-end 2012, the Company had the ability to grant approximately 908 thousand shares under this plan.

A summary of activity in the Company’s stock compensation plans is shown below:

	Non-vested Stock Awards Outstanding				Stock Options Outstanding
(Shares in thousands)	Number of Shares		Weighted- Average Grant Date Fair Value		Number of Shares		Weighted- Average Exercise Price
Balance, December 31, 2011	216		$	19.88	409		$	25.39
Granted	108		23.76		—		—
Acquired	—		—		552		10.26
Stock options exercised	—		—		(254	)	11.97
Stock awards vested	(72	)	19.41		—		—
Forfeited	(8	)	21.38		—		—
Expired	—		—		(19	)	22.83
Balance, December 31, 2012	244		$	21.69	688		$	18.13
Exercisable options, December 31, 2012					570		$	19.31

Stock Awards

The total compensation cost for stock awards recognized as expense was $2.0 million, $1.5 million, and $1.6 million, in the years 2012, 2011, and 2010, respectively. The total recognized tax benefit associated with this compensation cost was $0.8 million, $0.6 million, and $0.6 million, respectively.

The weighted average fair value of stock awards granted was $23.76, $20.88, and $16.76 in 2012, 2011, and 2010, respectively. Stock awards vest over periods up to five years and are valued at the closing price of the stock on the grant date.

The total fair value of stock awards vested during 2012, 2011, and 2010 was $1.4 million, $1.3 million, and $913 thousand, respectively. The unrecognized stock-based compensation expense related to unvested stock awards was $3.1 million as of year-end 2012. This amount is expected to be recognized over a weighted average period of two years.

Option Awards

Option awards are granted with an exercise price equal to the market price of the Company’s stock at the date of grant, and vest over periods up to five years. The options grant the holder the right to acquire a share of the Company’s common stock for each option held, and have a contractual life of ten years. As of year-end 2012, the weighted average remaining contractual term for options outstanding is 4.96 years.

The Company generally issues shares from treasury stock as options are exercised. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The expected dividend yield and expected term are based on management estimates. The expected volatility is based on historical volatility. The risk-free interest rates for the expected term are based on the U.S. Treasury yield curve in effect at the time of the grant.  The Company acquired options in the Beacon transaction as discussed in Note 3 — Mergers & Acquisitions but did not grant additional options in 2012, 2011, or 2010.

The total intrinsic value of options exercised was $2.7 million, $98 thousand, and $198 thousand for the years 2012, 2011, and 2010, respectively.  The expense pertaining to options vesting in the years 2012, 2011, and 2010 was $240 thousand, $0, and $53 thousand, respectively.  The unrecognized stock-based compensation expense related to unvested stock options was $909 thousand as of year-end 2012. This amount is expected to be recognized over a weighted average period of one year.