Stock-Based Compensation

12 Months Ended

Dec. 31, 2013

Stock-Based Compensation [Abstract]

Stock-Based Compensation

Note 13 – Stock-Based Compensation

The Company's 2008 Stock Incentive Plan ("2008 Plan") was adopted by the Board of Directors of the Company on February 19, 2008 and approved by shareholders on April 22, 2008 at the Company's 2008 Annual Meeting of Shareholders.  The 2008 Plan provides for the granting of restricted stock awards, incentive and non-statutory options to employees and directors on a periodic basis, at the discretion of the Board of Directors or a Board designated committee. The 2008 Plan authorizes the issuance of up to 500,000 shares of common stock. The 2008 Plan replaced the Company's stock option plan that was approved by the shareholders at the 1997 Annual Meeting, which plan terminated in 2006.

Stock Options

Accounting guidance requires that compensation cost relating to share-based payment transactions be recognized in the financial statements with measurement based upon the fair value of the equity or liability instruments issued.

A summary of stock option transactions is as follows:

	Option Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value ($000)
Outstanding at December 31, 2012		240,517	$	24.28
Granted		-		-
Exercised		17,475		17.70
Forfeited		11,795		27.64
Expired		34,500		25.94
Outstanding at December 31, 2013		176,747	$	24.39	3.33 years		$	556
Exercisable at December 31, 2013		176,747	$	24.39	3.33 years		$	556

The aggregate intrinsic value of stock options in the table above represents the total pre-tax intrinsic value (the amount by which the current market value of the underlying stock exceeds the exercise price of the option) that would have been received by the option holders had all option holders exercised their options on December 31, 2013.  This amount changes based on changes in the market value of the Company's common stock.

The total proceeds of the in-the-money options exercised during the year ended December 31, 2013, 2012, and 2011 were $309,000, $118,000, and $173,000, respectively.  Total intrinsic value of options exercised during years ended December 31, 2013, 2012, and 2011 was $75,000, $33,000, and $56,000, respectively.

As of December 31, 2013, 2012, and 2011, there was $0, $0, and $16,000, respectively, in unrecognized compensation expense.  Compensation expense related to stock options was $0 in 2013, $0 in 2012, and $63,000 in 2011.

The following table summarizes information related to stock options outstanding on December 31, 2013:

	Options Outstanding						Options Exercisable
	Range of Exercise Prices	Number of Outstanding Options		Weighted- Average Remaining Contractual Life	Weighted- Average Exercise Price		Number of Options Exercisable		Weighted Average Exercise Price
$	16.00 to $20.00		37,000	4.98 yrs	$	16.95		37,000	$	16.95
	20.01 to 25.00		73,460	2.82		23.52		73,460		23.52
	25.01 to 30.00		23,925	4.55		25.81		23,925		25.81
	30.01 to 41.67		42,362	2.10		31.59		42,362		31.59
			176,747	3.33 yrs	$	24.39		176,747	$	24.39

No stock options were granted in 2013 and 2012.

Restricted Stock

The Company from time-to-time grants shares of restricted stock to key employees and non-employee directors.  These awards help align the interests of these employees and directors with the interests of the shareholders of the Company by providing economic value directly related to increases in the value of the Company's common stock.  The value of the stock awarded is established as the fair market value of the stock at the time of the grant.  The Company recognizes expense, equal to the total value of such awards, ratably over the vesting period of the stock grants. Restricted stock granted in 2013 cliff vests over 36 months based on the term of the award.

Nonvested restricted stock activity for the year ended December 31, 2013 is summarized in the following table:

Restricted Stock	Shares		Weighted Average Grant Date Value
Nonvested at January 1, 2013		39,327	$	20.17
Granted		13,599	$	20.82
Vested		19,576	$	21.31
Forfeited		-		-
Nonvested at December 31, 2013		33,350	$	19.77

As of December 31, 2013, 2012, and 2011, there were $337,000, $346,000, and $404,000, respectively, in unrecognized compensation cost related to nonvested restricted stock granted under the 2008 Plan.  This cost is expected to be recognized over the next 12 to 30 months.   The share based compensation expense for nonvested restricted stock was $292,000, $357,000, and $291,000 during 2013, 2012, and 2011 respectively.

      Starting in 2010, the Company began offering its outside directors alternatives with respect to director compensation. For 2013, the regular quarterly board retainer could be received in the form of either (i) $3,000 in cash or (ii) shares of immediately vested, but restricted stock, with a market value of $4,688. Monthly meeting fees can also be received as $600 per meeting in cash or $750 in immediately vested, but restricted stock. For 2013, all 13 outside directors elected to receive stock in lieu of cash for either all or part of their quarterly retainer or meeting fees. Only outside directors receive board fees. The Company issued 12,711, 17,908, and 12,818 shares and recognized share based compensation expense of $282,000, $381,000, and 242,000 during 2013, 2012 and 2011, respectively.