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Stock Based Compensation
 12 Months Ended
Dec. 31, 2012
Stock Based Compensation [Abstract]  
Stock Based Compensation
Note 15 - Stock Based Compensation
 
The Company recognizes the cost of employee services received in exchange for awards of equity instruments based upon the grant date fair value of those awards.
 
2006 Long-Term Incentive Plan
 
Effective May 17, 2006, the Company's stockholders approved the Schawk Inc. 2006 Long-Term Incentive Plan ("2006 Plan"). The 2006 Plan provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, performance-based awards and other cash and stock-based awards to officers, other employees and directors of the Company. Options granted under the plan have an exercise price equal to the market price of the underlying stock at the date of grant and are exercisable for a period of ten years from the date of grant. Options granted pursuant to the 2006 Plan vest over a three-year period. The total number of shares of common stock available for issuance under the 2006 Plan is 1,255 as of December 31, 2012.
 
The Company issued 130, 111 and 108 stock options, as well as 149, 126 and 85 restricted shares, during the years ended December 31, 2012, 2011 and 2010, respectively, under the 2006 Plan.
 
Options
 
The Company has granted stock options under several stock-based compensation plans. The Company's 2003 Equity Option Plan provided for the granting of options to purchase up to 5,252 shares of Class A common stock to key employees. The Company also adopted an Outside Directors' Formula Stock Option Plan authorizing unlimited grants of options to purchase shares of Class A common stock to outside directors. Options granted under the plan have an exercise price equal to the market price of the underlying stock at the date of grant and are exercisable for a period of ten years from the date of grant. Options granted pursuant to the 2003 Equity Option Plan and Outside Directors Stock Option Plan vest over a two-year period. The Company issues new shares of its Class A common stock for option exercises.
 
The Company issued 17 stock options during 2012 and 15 stock options during both 2011 and 2010 to its directors under the Outside Directors Stock Option Plan.
 
The Company recorded $780, $888 and $886 of compensation expense relating to outstanding options during the years ended December 31, 2012, 2011, and 2010, respectively.
 
The Company records compensation expense for employee stock options based on the estimated fair value of the options on the date of grant using the Black-Scholes option-pricing model with the assumptions included in the table below. The Company uses historical data among other factors to estimate the expected price volatility, the expected option life and the expected forfeiture rate. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the estimated life of the option.
 
The following assumptions were used to estimate the fair value of options granted during the years ended December 31, 2012, 2011 and 2010 using the Black-Scholes option pricing model:
 
 
2012
 
 
2011
 
 
2010
 
 
 
 
 
 
 
 
 
 
Expected dividend yield
 
 
2.73
 
%
 
 
1.57 - 2.66
 
%
 
 
0.76 - 1.24
 
%
Expected stock price volatility
 
 
53.52 - 57.19
 
%
 
 
48.80 - 53.21
 
%
 
 
47.75 - 51.32
 
%
Risk-free interest rate range
 
 
1.24 - 1.33
 
%
 
 
1.33 - 2.84
 
%
 
 
1.79 - 3.26
 
%
Weighted-average expected life
 
 
6.21 – 7.70
 
years
 
 
6.28 - 7.63
 
years
 
 
6.53 - 7.40
 
years
Forfeiture rate
 
 
1.00 – 3.00
 
%
 
 
1.00 - 3.00
 
%
 
 
1.00 - 3.00
 
%
Total fair value of options granted
 
$
727
 
 
$
995
 
 
$
822
 
 
The following table summarizes the Company's activities with respect to its stock option plans for 2012, 2011 and 2010 (in thousands, except price per share and contractual term):
 
 
Number of
Shares
 
 
Weighted Average
Exercise Price
Per Share
 
 
Weighted Average
Remaining
Term
 
 
Aggregate
Intrinsic Value
 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding December 31, 2009
 
 
2,505
 
 
$
12.81
 
 
 
4.87
 
 
$
5,944
 
Granted
 
 
128
 
 
$
14.18
 
 
 
 
 
 
 
 
 
Exercised
 
 
(559
)
 
$
9.46
 
 
 
 
 
 
 
 
 
Cancelled
 
 
(20
)
 
$
13.22
 
 
 
 
 
 
 
 
 
Outstanding December 31, 2010
 
 
2,054
 
 
$
13.77
 
 
 
4.85
 
 
$
13,978
 
Granted
 
 
126
 
 
$
17.62
 
 
 
 
 
 
 
 
 
Exercised
 
 
(121
)
 
$
9.27
 
 
 
 
 
 
 
 
 
Cancelled
 
 
(1
)
 
$
8.90
 
 
 
 
 
 
 
 
 
Outstanding December 31, 2011
 
 
2,058
 
 
$
14.28
 
 
 
3.94
 
 
$
1,496
 
Granted
 
 
147
 
 
$
12.00
 
 
 
 
 
 
 
 
 
Exercised
 
 
(272
)
 
$
9.39
 
 
 
 
 
 
 
 
 
Cancelled
 
 
(113
)
 
$
9.98
 
 
 
 
 
 
 
 
 
Outstanding December 31, 2012
 
 
1,820
 
 
$
15.08
 
 
 
3.71
 
 
$
1,520
 
Vested at December 31, 2012
 
 
1,568
 
 
$
15.24
 
 
 
2.90
 
 
$
1,334
 
Exercisable at December 31, 2012
 
 
1,568
 
 
$
15.24
 
 
 
2.90
 
 
$
1,334
 
 
The weighted-average grant-date fair value of options granted during the years ended December 31, 2012, 2011 and 2010 was $4.95, $7.90 and $6.67, respectively. The total intrinsic value for options exercised during the years ended December 31, 2012, 2011 and 2010, respectively, was $988, $908 and $3,819.
 
Cash received from option exercises under all plans for the years ended December 31, 2012, 2011 and 2010 was approximately $2,681, $1,073 and $5,288, respectively. The actual tax benefit realized for the tax deductions from option exercises under all plans totaled approximately $244, $293 and $1,109, respectively, for the years ended December 31, 2012, 2011 and 2010.
 
The following table summarizes information concerning outstanding and exercisable options at December 31, 2012:
 
 
 
 
 
 
Options Outstanding
 
 
 
Options Exercisable
 
 
Range of exercise price
 
 
 
Number outstanding
 
 
 
Weighted
average
 remaining
 contractual life
(years)
 
 
 
Weighted average exercise
price
 
 
 
Number exercisable
 
 
 
Weighted average exercise
price
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
6.20-$8.26
 
 
 
168
 
 
 
5.9
 
 
$
6.96
 
 
 
168
 
 
$
6.96
 
 
8.26-10.33
 
 
 
54
 
 
 
0.2
 
 
$
9.22
 
 
 
54
 
 
$
9.22
 
 
10.33-12.39
 
 
 
158
 
 
 
8.1
 
 
$
11.70
 
 
 
24
 
 
$
10.83
 
 
12.39-14.45
 
 
 
515
 
 
 
2.4
 
 
$
13.93
 
 
 
472
 
 
$
14.01
 
 
14.45-16.52
 
 
 
179
 
 
 
4.7
 
 
$
15.89
 
 
 
175
 
 
$
15.89
 
 
16.52-18.58
 
 
 
256
 
 
 
4.4
 
 
$
18.07
 
 
 
218
 
 
$
18.05
 
 
18.58-20.65
 
 
 
475
 
 
 
2.4
 
 
$
18.89
 
 
 
452
 
 
$
18.89
 
 
20.65-21.08
 
 
 
15
 
 
 
6.8
 
 
$
21.04
 
 
 
5
 
 
$
21.08
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,820
 
 
 
 
 
 
 
 
 
 
 
1,568
 
 
 
 
 
 
 
As of December 31, 2012, 2011 and 2010 there was $880, $959 and $879, respectively, of total unrecognized compensation cost related to nonvested options outstanding. That cost is expected to be recognized over a weighted average period of approximately 1.7 years. A summary of the Company's nonvested option activity for the years ended December 31, 2012, 2011 and 2010 is as follows (in thousands, except price per share and contractual term):

 
Number of
Shares
 
 
Weighted Average
Grant Date
Fair Value
Per Share
 
 
 
 
 
 
 
Nonvested at January1, 2010
 
 
386
 
 
$
4.26
 
Granted
 
 
128
 
 
$
6.67
 
Vested
 
 
(186
)
 
$
6.67
 
Forfeited
 
 
(8
)
 
$
4.49
 
Nonvested at December 31, 2010
 
 
320
 
 
$
4.93
 
Granted
 
 
126
 
 
$
7.90
 
Vested
 
 
(185
)
 
$
4.95
 
Nonvested at December 31, 2011
 
 
261
 
 
$
6.35
 
Granted
 
 
147
 
 
$
4.95
 
Vested
 
 
(152
)
 
$
5.36
 
Forfeited
 
 
(4
)
 
$
5.60
 
 
 
 
 
 
 
 
 
Nonvested at December 31, 2012
 
 
252
 
 
$
6.12
 

Restricted Stock
 
As discussed above, the Company's 2006 Long-Term Incentive Plan provides for the grant of various types of stock-based awards, including restricted stock. Restricted shares are valued at the price of the common stock on the date of grant and vest at the end of a three year period. During the vesting period the participant has the rights of a shareholder in terms of voting and dividend rights but is restricted from transferring the shares. The expense is recorded on a straight-line basis over the vesting period.
 
The Company recorded $2,349, $1,210 and $1,000 of compensation expense relating to restricted stock during years ended December 31, 2012, 2011 and 2010, respectively. The expense in 2012 reflects an increase in the level of grants and increased expense attributable to retirement-age vesting provisions.
 
A summary of the restricted share activity for the years ended December 31, 2012, 2011 and 2010 is presented below:
 
 
Number of
Shares
 
 
Weighted Average
Grant Date
Fair Value
per share
 
 
 
 
 
 
 
Outstanding at January 1, 2010
 
 
237
 
 
$
10.70
 
Granted
 
 
85
 
 
$
13.83
 
Forfeited
 
 
(39
)
 
$
16.93
 
Vested – restriction lapsed
 
 
(7
)
 
$
10.39
 
Outstanding at December 31, 2010
 
 
276
 
 
$
10.90
 
Granted
 
 
126
 
 
$
15.86
 
Vested – restriction lapsed
 
 
(59
)
 
$
15.90
 
Outstanding at December 31, 2011
 
 
343
 
 
$
11.86
 
Granted
 
 
149
 
 
$
11.84
 
Vested – restriction lapsed
 
 
(136
)
 
$
6.94
 
 
 
 
 
 
 
 
 
Outstanding at December 31, 2012
 
 
356
 
 
$
13.72
 
 
 
 
 
 
 
 
 
 
As of December 31, 2012, 2011 and 2010, there was $1,438, $1,984 and $1,316, respectively, of total unrecognized compensation cost related to the outstanding restricted shares that will be recognized over a weighted average period of approximately 2.0 years.
 
Employee Stock-based Compensation Expense
 
The Company recorded $3,129, $2,098 and $1,886 for stock-based compensation during years ended December 31, 2012, 2011 and 2010, respectively. The expense is included in selling, general and administrative expenses in the Consolidated Statements of Comprehensive Income (Loss). There were no amounts related to employee stock-based compensation capitalized as assets during the three years ended December 31, 2012.