Stock-Based Compensation

3 Months Ended

Mar. 31, 2012

Stock-Based Compensation [Abstract]

Stock-Based Compensation

(8) Stock-based Compensation

Under the terms of Suffolk's stock option plans adopted in 1999 and 2009, options have been granted to key employees and directors to purchase shares of Suffolk's stock. Under the Suffolk Bancorp 2009 Stock Incentive Plan ("the Plan"), there are 500,000 shares of Suffolk's common stock reserved for issuance, of which 100,000 had been granted as of March 31, 2012. There are no shares reserved for issuance under the 1999 Stock Option Plan. Options are awarded by a committee appointed by the Board of Directors. Both plans provide that the option price shall not be less than the fair value of the common stock on the date the option is granted. All options are exercisable for a period of ten years or less. Both plans provide for but do not require the grant of stock appreciation rights that the holder may exercise instead of the underlying option. When the stock appreciation right is exercised, the underlying option is canceled. The optionee receives shares of common stock or cash with a fair market value equal to the excess of the fair value of the shares subject to the option at the time of exercise (or the portion thereof so exercised) over the aggregate option price of the shares set forth in the option agreement. The exercise of stock appreciation rights is treated as the exercise of the underlying option. Options granted prior to 2010 vest after one year. Options granted in 2011 are exercisable commencing three years from the date of grant at a rate of one third per year. Options granted in 2012 are exercisable commencing one year from the date of grant at a rate of one third per year.

On December 30, 2011, Suffolk granted an award of 30,000 non-qualified stock options at an exercise price of $10.79 per share. The stock option award was granted to the President and Chief Executive Officer as an inducement material to employment with Suffolk. The non-qualified options were not issued as part of any of Suffolk's registered stock-based compensation plans. The options are exercisable commencing three years from the date of grant at a rate of one third per year. For the three months ended March 31, 2012, $9,000 was recognized as compensation expense. The total remaining unrecognized compensation cost of $169,000 will be expensed over the remaining vesting period of 4.75 years.

Stock-based compensation for all share-based payments to employees, including grants of employee stock options, is recorded in the financial statements based on their fair values. During the three months ended March 31, 2012, $18,000 was recognized as compensation expense. The remaining unrecognized compensation cost of $687,000 will be expensed over the remaining weighted vesting period of approximately three years.

The following table presents the options granted, exercised, or expired under the 1999 Plan and the 2009 Plan during the three months ended March 31, 2012:

	Shares			Weighted Average Price
Balance at December 31, 2011		81,500		$	22.57
Options granted		80,000			13.11
Options exercised		—			—
Options expired or terminated		(26,000	)		32.29
Balance at March 31, 2012		135,500		$	17.73

The following table details contractual weighted-average lives of outstanding and exercisable options at various prices:

	By range of exercise prices
from	$	10.79	$	12.44	$	28.30	$	34.39
to	$	10.79	$	13.44	$	32.90	$	34.95
Outstanding stock options		20,000		80,000		26,000		9,500
Weighted-average remaining life		9.76		9.95		4.83		3.30
Weighted-average exercise price	$	10.79	$	13.11	$	31.04	$	34.80
Exercisable stock options		—		—		26,000		9,500
Weighted-average remaining life		—		—		4.83		3.30
Weighted-average exercise price	$	—	$	—	$	31.04	$	34.80

	Weighted-average
At all prices	Options		price		life (yrs)
Total outstanding		135,500	$	17.73		8.47
Total exercisable		35,500	$	32.05		4.42