Quarterly report pursuant to Section 13 or 15(d)

STOCKHOLDERS' EQUITY

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STOCKHOLDERS' EQUITY
 9 Months Ended
Sep. 30, 2013
Stockholders' Equity Note [Abstract]  
STOCKHOLDERS' EQUITY

NOTE 6. STOCKHOLDERS’ EQUITY

During the nine months ended September 30, 2013 the Company paid $39.4 million or $0.27 per share in cash dividends compared to $35.1 million or $0.24 per share during the same period in 2012. During the third quarter ended September 30, 2013, the Company repurchased 168,110 shares from the open market of its $1 par value common stock at a weighted average price of $24.72 per share compared to 713,781 shares purchased at a weighted average price of $21.06 during the same period in 2012. During the nine months ended September 30, 2013, the Company repurchased 340,699 shares of its $1 par value common stock at a weighted average price of $24.56 per share compared to 781,781 shares purchased at a weighted average price of $20.93 during the same period in 2012. The Company repurchased $0.4 million of common stock for the three months ended September 30, 2013 and no repurchases were made for the same period in 2012, and repurchased $5.3 and $3.6 million of common stock for the nine months ended September 30, 2013 and 2012, respectively, from employees for the payment of taxes on vesting restricted shares.

As more fully discussed in Note 14 of the Company’s notes to the consolidated financial statements in its 2012 Annual Report on Form 10-K, stock options, time lapse restricted shares (TLRS’s) and restricted stock units have been issued to officers and other management employees under the Company’s Employee Stock Incentive Plans.  The Company issues new shares from its authorized but unissued share pool. At September 30, 2013, approximately 4.0 million shares of the Company’s common stock were reserved for issuance.

Stock Options
Stock options generally vest over a five-year period and expire ten years from the issuance date. 

During the third quarter ended September 30, 2013, no shares of common stock were issued upon exercise of stock options by employees compared to approximately 6,000 shares for the same quarter in the prior year. The Company has no outstanding stock options as of September 30, 2013. In total for the nine months ended September 30, 2013, approximately 1,000 shares of common stock were issued upon exercise of stock options by employees and approximately 32,000 shares for the nine months ended September 30, 2012.

Options activity outstanding under the Company’s stock option plan as of September 30, 2013 and changes during the nine months ended September 30, 2013, were as follows:

(in thousands except per share data) Shares   Weighted-Average Exercise Price   Weighted- Average Remaining Contractual Term (in years)   Aggregate Intrinsic Value
Outstanding at December 31, 2012                 1   $            5.52   0.08   $ 17
Exercised                (1)                5.52          
Outstanding at September 30, 2013                  -   $                  -                      -   $                  -
Exercisable at September 30, 2013                  -   $                  -                      -   $                  -

 

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 period and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on that day. The amount of aggregate intrinsic value will change based on the fair market value of the Company’s stock.

The aggregate intrinsic value of options exercised during the nine months ended September 30, 2013 and September 30, 2012 was $20 thousand and $530 thousand, respectively. Exercise of options for the third quarter ended September 30, 2013 and 2012 resulted in cash receipts of $6 thousand and less than $1 thousand, respectively.

Time Lapse Restricted Shares and Restricted Stock Units

The following table summarizes the components of the Company’s stock-based compensation programs recorded as expense:

  Three Months Ended     Nine Months Ended 
  September 30,     September 30,
(in thousands) 2013   2012   2013   2012
Time lapse restricted stock:                      
Pre-tax compensation expense $         2,717   $       2,376 $           7,809 $         7,125
Tax benefit         (1,046)            (915)           (3,006)         (2,743)
Restricted stock expense, net of tax $         1,671   $       1,461 $           4,803 $         4,382

 

The Company recognized a tax benefit of approximately $0.4 million and $0.1 million during the third quarters ended September 30, 2013 and 2012, respectively, and approximately $3.5 million and $3.0 million for the nine months ended September 30, 2013 and 2012, respectively related to the amortization of restricted shares which have been recorded as an increase to paid-in capital.

The following table summarizes information on unvested restricted stock outstanding as of September 30, 2013:

 

  Number of Shares   Weighted-Average Grant-Date Fair Value
Unvested Restricted Stock Units at December 31, 2012          2,743   $ 16.41
Forfeited              (42)     17.19
Vested            (695)     13.34
Granted             463     23.75
Unvested Restricted Stock Units at September 30, 2013 2,469   $           18.65

 

At September 30, 2013 and December 31, 2012, the Company had $33.6 million and $36.7 million of total unrecognized compensation cost, respectively, related to time-lapse restricted shares that are expected to be recognized over a weighted average period of approximately 4.0 years and 4.1 years, respectively.