Equity Plans and Equity Based Compensation

6 Months Ended

Jun. 30, 2011

Equity Plans and Equity Based Compensation

Note 7 – Equity Plans and Equity Based Compensation

The Company maintains three equity incentive plans under which stock options, restricted stock, and other equity incentive awards can be granted.  At June 30, 2011, the Company has reserved 611,548 shares of Common Stock (as adjusted for subsequent stock dividends and subject to further customary anti-dilution adjustments) for the purpose of issuance pursuant to outstanding and future grants of options, restricted stock, and other equity awards to officers, directors and other employees of the Company.

For the six months ended June 30, 2011 and 2010, the Company granted no options, and accordingly, recorded no stock option expense related to option grants during the three and six months ended June 30, 2011 and 2010.  The Company recorded no other stock compensation expense applicable to options during the quarter and six months ended June 30, 2011 and 2010 because all outstanding options were fully vested prior to 2007.  In addition, there was no unrecognized option expense as all outstanding options were fully vested prior to June 30, 2011 and 2010.

During the periods presented, awards of long-term incentives were granted in the form of restricted stock, granted in tandem with cash credit entitlements.  The incentive awards will typically be in the form of 50% restricted stock grants and 50% cash credit entitlements.  The restricted stock grants and tandem cash credit entitlements are subject to forfeiture in the event that the recipient of the grant does not continue employment with the Company through December 15 of the year of grant, at which time they generally vest 100 percent.  For measuring compensation costs, restricted stock awards are valued based upon the market value of the common shares on the date of grant.  During the three and six months ended June 30, 2011, the Company granted awards of 1,266 and 37,467 shares of restricted stock, respectively.  During the six months ended June 30, 2010, the Company granted awards of 24,178 shares of restricted stock. The Company granted no shares of restricted stock during the three months ended June 30, 2010.

The following table presents expense recorded for restricted stock and cash entitlements as well as the related tax effect for the periods presented:

	Three Months Ended
	June 30,
	2011			2010
Restricted Stock Expense	$	154		$	100
Cash Entitlement Expense		137			95
Tax Effect		(118	)		(79	)
Net of Tax	$	173		$	116

	Six Months Ended
	June 30,
	2011			2010
Restricted Stock Expense	$	308		$	200
Cash Entitlement Expense		275			190
Tax Effect		(236	)		(158	)
Net of Tax	$	347		$	232

Unrecognized expense associated with the restricted stock grants and cash entitlements totaled $587 and $390 as of June 30, 2011 and 2010, respectively.

The Company maintains an Employee Stock Purchase Plan whereby eligible employees have the option to purchase the Company’s common stock at a discount.  The purchase price of the shares under this Plan has been set at 95% of the fair market value of the Company’s common stock as of the last day of the plan year.  The plan provides for the purchase of up to 500,000 shares of common stock, which the Company may obtain by purchases on the open market or from private sources, or by issuing authorized but unissued common shares.  Funding for the purchase of common stock is from employee and Company contributions.

The Employee Stock Purchase Plan is not considered compensatory.  There was no expense recorded for the employee stock purchase plan during the three and six months ended June 30, 2011 and 2010, nor was there any unrecognized compensation expense as of June 30, 2011 and 2010 for the Employee Stock Purchase Plan.