Employee Benefit and Deferred Compensation Plans

(In Thousands, Except Share Data)

The plan expense for the Company-sponsored noncontributory defined benefit pension plan (“Pension Benefits”) and post-retirement health and life plans (“Other Benefits”) for the periods presented was as follows:



	Pension Benefits						Other Benefits
	Three Months Ended						Three Months Ended
	June 30,						June 30,
	2013			2012			2013		2012
Service cost	$	—		$	—		$	6	$	6
Interest cost	187			215			15		16
Expected return on plan assets	(309		)	(298		)	—		—
Prior service cost recognized	—			—			—		—
Recognized actuarial loss	102			89			36		18
Net periodic benefit cost	$	(20	)	$	6		$	57	$	40



	Pension Benefits						Other Benefits
	Six Months Ended						Six Months Ended
	June 30,						June 30,
	2013			2012			2013		2012
Service cost	$	—		$	—		$	13	$	12
Interest cost	375			430			27		32
Expected return on plan assets	(620		)	(596		)	—		—
Prior service cost recognized	—			—			—		—
Recognized actuarial loss	199			178			55		36
Net periodic benefit cost	$	(46	)	$	12		$	95	$	80

In January 2013 and 2012, the Company granted stock options which generally vest and become exercisable in equal installments of 33 1/3% upon completion of one, two and three years of service measured from the grant date. The fair value of stock option grants is estimated on the grant date using the Black-Scholes option-pricing model. The Company employed the following assumptions with respect to its stock option grants in 2013 and 2012 for the six month periods ended June 30, 2013 and 2012:



	2013 Grant			2012 Grant
Shares granted	52,500			172,000
Dividend yield	3.55		%	4.55		%
Expected volatility	37		%	37		%
Risk-free interest rate	0.76		%	0.79		%
Expected lives	6 years			6 years
Weighted average exercise price	$	19.14		$	14.96
Weighted average fair value	$	4.47		$	3.10

The Company awards performance-based restricted stock to executives and time-based restricted stock to directors and other officers and employees under a long-term equity incentive plan. The performance-based restricted stock vests upon completion of a one-year service period and the attainment of certain performance goals. Performance-based restricted stock is issued at the target level; the number of shares ultimately awarded is determined at the end of each year and may be increased or decreased depending on the Company meeting or exceeding financial performance measures defined by the Board of Directors. Time-based restricted stock vests at the end of the service period defined in the respective grant. The fair value of each restricted stock grant is the closing price of the Company's common stock on the day immediately preceding the grant date. The following table summarizes the changes in restricted stock as of and for the six months ended June 30, 2013:



	Performance-Based Restricted Stock	Weighted Average Grant-Date Fair Value		Time- Based Restricted Stock		Weighted Average Grant-Date Fair Value
Nonvested at January 1, 2013	—	$	—	9,684		$	15.49
Granted	59,850	19.14		16,338		20.28
Vested	—	—		(9,038	)	15.49
Cancelled	—	—		(646	)	15.49
Nonvested at June 30, 2013	59,850	$	19.14	16,338		$	20.28

During the six months ended June 30, 2013, the Company reissued 73,437 shares from treasury in connection with the exercise of stock options and issuance of fully vested restricted stock. The Company recorded total stock-based compensation expense of $477 and $316 for the three months ended June 30, 2013 and 2012, respectively, and $955 and $608 for the six months ended June 30, 2013 and 2012 , respectively.