Share-Based Compensation

6 Months Ended

Jun. 30, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Note 2. Share-Based Compensation

The Company grants stock options, restricted stock and restricted stock units (RSUs) under the 2009 Equity Compensation Program. Share-based compensation expense of $912,000 and $638,000 was recognized for the six months ended June 30, 2015 and 2014, respectively. As of June 30, 2015, there was unrecognized compensation cost of $441,000 related to unvested restricted stock; that cost is expected to be recognized over a weighted average period of approximately 1.8 years. Unrecognized compensation expense related to unvested stock options was approximately $67,000 as of June 30, 2015 and is expected to be recognized over a period of 1.9 years. Unrecognized compensation expense related to RSUs was approximately $1.5 million as of June 30, 2015, and that cost is expected to be recognized over a period of 1.7 years.

In the first six months of 2014, the Company granted 1,942 shares of restricted stock at a grant date fair value of $11.21 per share under the 2009 Equity Compensation Program. Compensation expense on these shares is expected to average approximately $4,000 per year over a five year period.

In the first six months of 2015, the Company granted 129,509 RSUs at a weighted average grant date fair value of $11.06 per share under the Company’s 2009 Equity Compensation Program. These units vest within a range of two to three years. A portion of these RSUs will vest subject to certain performance conditions in the restricted stock unit agreement. There are also certain provisions in the compensation program which state that if a holder of the RSUs reaches a certain age and years of service, the person has effectively earned a portion of the RSUs at that time. Compensation expense on these restricted stock units is expected to average approximately $477,000 per year over a three year period. In the first six months of 2014, the Company granted 127,797 RSUs at a weighted average grant date fair value of $10.66 per share under the Company’s 2009 Equity Compensation Program. Compensation expense on these RSUs is expected to average approximately $453,000 per year over a three year period.

There were no grants of stock options in the first six months of 2015 or 2014.

Option activity under the Company’s stock option plans is as follows:


						Weighted
	Number of shares			Weighted average exercise price		average remaining contractual term (in years)		Aggregate intrinsic value

Outstanding, January 1, 2015		311,705			$9.69				$681,861
Issued		---			---
Exercised		(15,500	)		7.30
Forfeited		(3,462	)		12.28
Expired		---			---

Outstanding, June 30, 2015		292,743			$9.78		3.76		$653,340

Options exercisable at June 30, 2015		271,743			$9.80		3.43		$601,293

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the first half of 2015 and the exercise price, multiplied by the number of in-the-money options).

The aggregate intrinsic value of stock options exercised during the six months ended June 30, 2015 and 2014 was $63,000 and $42,000, respectively. Exercise of stock options during the first six months of 2015 and 2014 resulted in cash receipts of $113,000 and $86,000, respectively.

Information regarding the Company’s restricted stock and changes during the six months ended June 30, 2015 is as follows:


	Number of shares			Weighted average price
Outstanding, January 1, 2015		160,284			$9.21
Granted		---			---
Vested		(86,470	)		9.11
Forfeited		(88	)		9.39

Outstanding, June 30, 2015		73,726			$9.32

Information regarding the Company’s RSUs (all unvested) and changes during the six months ended June 30, 2015 is as follows:


	Number of shares			Weighted average price
Outstanding, January 1, 2015		98,535		$	10.64
Granted		129,509			11.06
Vested		(25,566	)		11.02
Forfeited		(515	)		10.74

Outstanding, June 30, 2015		201,963		$	10.86