SHARE BASED COMPENSATION

3 Months Ended

Mar. 31, 2015

Note 8 – Share Based Compensation

At March 31, 2015, the Company had one share based compensation plans in existence, the 2005 Omnibus Stock Plan, which is described in the following paragraph.

The Company’s 2005 Omnibus Stock Plan (“Omnibus Plan”) provides for the granting of non-qualifying stock options to the Company’s directors, and incentive and non-qualifying stock options, stock appreciation rights and restricted stock grants to selected key employees on a periodic basis at the discretion of the board. The Omnibus Plan authorizes the issuance of up to 1,800,000 shares of common stock of which 988,673 are available for issuance at March 31, 2015, has a term of ten years, and is administered by a committee of at least three directors appointed by the board of directors. Options granted under the plan have an exercise price which may not be less than 100% of the fair market value of the common stock on the date of the grant and must be exercised within seven to ten years from the date of grant. The exercise price of stock options must be paid for in full in cash or shares of common stock, or a combination of both. The board committee has the discretion when making a grant of stock options to impose restrictions on the shares to be purchased upon the exercise of such options. The Company generally issues authorized but previously unissued shares to satisfy option exercises.

The fair values of all of the options granted for the periods indicated have been estimated using a binomial option-pricing model with the weighted-average assumptions for the periods shown are presented in the following table:

	Three Months Ended March 31,
	2015		2014
Dividend yield	3.40	%	3.04	%
Weighted average expected volatility	42.98	%	46.78	%
Weighted average risk-free interest rate	1.42	%	1.56	%
Weighted average expected lives (in years)	5.42		5.08
Weighted average grant-date fair value	$7.63		$8.05

The dividend yield is based on estimated future dividend yields. The risk-free rate for periods within the contractual term of the share option is based on the U.S. Treasury yield curve in effect at the time of the grant. Expected volatilities are generally based on historical volatilities. The expected term of share options granted is generally derived from historical experience.

Compensation expense is recognized on a straight-line basis over the vesting period of the respective stock option or restricted stock grant. The Company recognized compensation expense of $0.4 million and $0.4 million for the three months ended March 31, 2015 and 2014, respectively, related to the awards of stock options and restricted stock grants. The intrinsic value of stock options exercised in the three months ended March 31, 2015 and 2014 was $0.1 million and $0.1 million, respectively. The total of unrecognized compensation cost related to stock options was approximately $0.3 million as of March 31, 2015. That cost is expected to be recognized over a weighted average period of approximately 2.4 years. The total of unrecognized compensation cost related to restricted stock was approximately $5.3 million as of March 31, 2015. That cost is expected to be recognized over a weighted average period of approximately 3.7 years. The fair value of the options vested during the three months ended March 31, 2015 and 2014, was $0.1 million and $0.1 million, respectively.

In the first quarter of 2015, 21,245 stock options were granted, subject to a three year vesting schedule with one third of the options vesting on April 1^st of each year. Additionally, 79,860 shares of restricted stock were granted, subject to a five year vesting schedule with one fifth of the shares vesting on April 1^st of each year.

A summary of share option activity for the period indicated is reflected in the following table:

					Weighted
		Number	Weighted		Average	Aggregate
		of	Average		Contractual	Intrinsic
		Common	Exercise		Remaining	Value
		Shares	Share Price		Life(Years)	(in thousands)
Balance at January 1, 2015		224,381	$	20.88		$	1,300
Granted		21,245	$	26.20
Exercised		(5,752)	$	12.81		$	76
Forfeited or expired		(71,721)	$	27.86
Balance at March 31, 2015		168,153	$	18.85	3.7	$	1,241

Exercisable at March 31, 2015		113,747	$	16.26	2.5	$	1,134

Weighted average fair value of options
	granted during the year		$	7.63

A summary of the activity for the Company’s restricted stock for the period indicated is presented in the following table:

	Number	Weighted
	of	Average
	Common	Grant-Date
(In dollars, except share data):	Shares	Fair Value
Restricted stock at January 1, 2015	226,871	$	21.07
Granted	79,860	$	26.20
Vested	(42,815)	$	17.63
Forfeited	(691)	$	20.88
Restricted stock at March 31, 2015	263,225	$	23.19

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

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