Stock-based Compensation

9 Months Ended

Sep. 30, 2011

Stock-based Compensation

Stock-based Compensation

Note 3. Stock-based Compensation

Equity Incentive Plan

The Company’s Equity Incentive Plan was approved by shareholders on April 27, 2005.  The 2 for 1 stock split effective June 10, 2011, increased the plan’s authorized shares to 2,000,000 shares of common stock. During the nine months ended September 30, 2011 and 2010, the Company granted annual Restricted Stock Awards (RSAs) of 85,426 and 76,572 shares, respectively, of common stock to officers and directors of the Company. Employee options vest over forty-eight months, while director options vest at the end of twelve months. During the first nine months of 2011 and 2010, the shares granted were valued at $17.44 and $17.74 per share, respectively, based upon the fair market value of the Company’s common stock on the date of grant.

The Company did not grant Stock Appreciation Rights (SARs) to officers during 2010 and 2011.

The Company has recorded compensation costs for the RSAs and SARs in Operating Expense in the amount of $1.0 million and $0.8 million for the nine months ended September 30, 2011 and September 30, 2010, respectively.