STOCK INCENTIVE PLANS

Restricted Stock

The Corporation issues restricted stock awards, consisting of both restricted stock and restricted stock units, to key employees under its Incentive Compensation Plans (Plans). The grant date fair value of the restricted stock awards is equal to the price of the Corporation's common stock on the grant date. For the six months ended June 30, 2011 and 2010, the Corporation issued 384,847 and 500,707 restricted stock awards with aggregate weighted average grant date fair values of $3,887 and $3,890, respectively, under these Plans. As of June 30, 2011, the Corporation had available up to 2,418,983 shares of common stock to issue under these Plans.

Under the Plans, more than half of the restricted stock awards granted to management are earned if the Corporation meets or exceeds certain financial performance results when compared to its peers. These performance-related awards are expensed ratably from the date that the likelihood of meeting the performance measure is probable through the end of a four-year vesting period. The service-based awards are expensed ratably over a three-year vesting period. The Corporation also issues discretionary service-based awards to certain employees that vest over five years.

The unvested restricted stock awards are eligible to receive cash dividends or dividend equivalents which are ultimately used to purchase additional shares of stock. Any additional shares of stock received as a result of cash dividends are subject to forfeiture if the requisite service period is not completed or the specified performance criteria are not met. These awards are subject to certain accelerated vesting provisions upon retirement, death, disability or in the event of a change of control as defined in the award agreements.

Share-based compensation expense related to restricted stock awards was $1,780 and $1,418 for the six months ended June 30, 2011 and 2010, the tax benefit of which was $623 and $496, respectively.

The following table summarizes certain information concerning restricted stock awards:


	Six Months Ended June 30,
	2011					2010
	Awards			Weighted Average Grant Price		Awards			Weighted Average Grant Price
Unvested awards outstanding at beginning of period		1,309,489		$	8.52		854,440		$	10.57
Granted		384,847			10.10		500,707			7.77
Vested		(171,446	)		13.59		(95,281	)		15.05
Forfeited		(1,397	)		9.20		(32,008	)		9.21
Dividend reinvestment		31,860			10.17		32,427			8.30

Unvested awards outstanding at end of period		1,553,353			8.39		1,260,285			9.09

The total fair value of awards vested was $1,761 and $698 for the six months ended June 30, 2011 and 2010, respectively.

As of June 30, 2011, there was $6,933 of unrecognized compensation cost related to unvested restricted stock awards including $207 that is subject to accelerated vesting under the Plan's immediate vesting upon retirement provision for awards granted prior to the adoption of ASC Topic 718, Compensation – Stock Compensation, on January 1, 2006. The components of the restricted stock awards as of June 30, 2011 are as follows:


	Service- Based Awards		Performance- Based Awards		Total
Unvested awards		563,747		989,606		1,553,353
Unrecognized compensation expense	$	2,315	$	4,618	$	6,933
Intrinsic value	$	5,835	$	10,242	$	16,077
Weighted average remaining life (in years)		2.21		2.67		2.50

Stock Options

The Corporation did not grant stock options during the six months ended June 30, 2011 or 2010. All outstanding stock options were granted at prices equal to the fair market value at the date of the grant, are primarily exercisable within ten years from the date of the grant and were fully vested as of January 1, 2006. The Corporation issues shares of treasury stock or authorized but unissued shares to satisfy stock options exercised. Shares issued upon the exercise of stock options were 8,389 for the six months ended June 30, 2011. No stock options were exercised during the six months ended June 30, 2010.

The following table summarizes certain information concerning stock option awards:


	Six Months Ended June 30,
	2011					2010
	Shares			Weighted Average Exercise Price		Shares			Weighted Average Exercise Price
Options outstanding at beginning of period		770,610		$	14.28		968,090		$	13.67
Exercised		(8,389	)		2.68		—			—
Forfeited		(157,296	)		12.18		(152,184	)		11.42

Options outstanding and exercisable at end of period		604,925			14.99		815,906			14.09

The intrinsic value of outstanding and exercisable stock options at June 30, 2011 was $(2,800), since the fair value of the stock subject to the options was less than the exercise price.

Warrants

In conjunction with its participation in the U.S. Department of the Treasury (UST) Capital Purchase Program (CPP), the Corporation issued to the UST a warrant to purchase up to 1,302,083 shares of the Corporation's common stock. Pursuant to Section 13(H) of the Warrant to Purchase Common Stock, the number of shares of common stock issuable upon exercise of the warrant was reduced in half to 651,042 shares on June 16, 2009, the date the Corporation completed a public offering. The warrant, which expires in 2019, has an exercise price of $11.52 per share