Stock Option Plan

3 Months Ended

Mar. 31, 2014

Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]

Stock Option Plan

5.       Stock Option Plan

On April 26, 2005, the Corporation approved a Stock Incentive Plan that provides for grants of up to 416,517 stock options. During 2012, approximately 5,600 stock options were granted subject to a five year vesting period. The shares in the plan and the shares granted have been adjusted to reflect the exchange ratio of 0.857.

The Corporation follows FASB Accounting Standard Codification Topic 718 (ASC 718), “Compensation – Stock Compensation,” for its stock option plans, and accordingly, the Corporation recognizes the expense of these grants as required. Stock-based employee compensation costs pertaining to stock options is reflected as a net increase in equity, for both any new grants, as well as for all unvested options outstanding at December 31, 2005, in both cases using the fair values established by usage of the Black-Scholes option pricing model, expensed over the vesting period of the underlying option.

The Corporation elected the modified prospective transition method in applying ASC 718. Under this method, the provisions of ASC 718 apply to all awards granted or modified after the date of adoption, as well as for all unvested options outstanding at December 31, 2005.The compensation cost recorded for unvested equity-based awards is based on their grant-date fair value. For the three months ended March 31, 2014, the Corporation recorded $4,000 in after-tax compensation cost for equity-based awards that vested during the three months ended March 31, 2014. The Corporation has $24,000 unrecognized pre-tax compensation cost related to non-vested equity-based awards granted under its stock incentive plan as of March 31, 2014, which is expected to be recognized over a weighted-average vesting period of approximately 1.0 months.

A summary of the status of the Corporation’s stock option plan as of March 31, 2014, and changes during the period then ended is presented below:

	Three months ended				Year ended
	March 31, 2014				December 31, 2013
			Weighted-					Weighted-
			average					average
			exercise					exercise
	Shares		price		Shares			price
Outstanding at beginning of period		369,939	$	12.80		370,339		$	12.80
Stock conversion		-		-		-			-
Granted		-		-		-			-
Exercised		-		-		-			-
Forfeited		-		-		(400	)		8.30
Outstanding at end of period		369,939	$	12.80		369,939		$	12.80
Options exercisable at period-end		359,177	$	12.91		359,177		$	12.91
Options expected to be exercisable at year-end
Fair value of options granted			NA					NA
The following information applies to options outstanding at March 31, 2014:
Number outstanding									369,939
Exercise price									$8.30 - $15.90
Weighted-average exercise price									$12.91
Weighted-average remaining contractual life								1.6 years

The expected term of options is based on evaluations of historical and expected future employee exercise behavior. The risk free interest rate is based upon the U.S. Treasury rates at the date of grant with maturity dates approximately equal to the expected life at the grant date. Volatility is based upon the historical volatility of the Corporation’s stock.

The effects of expensing stock options are reported in “cash provided by financing activities” in the Consolidated Statements of Cash Flows.