(13) STOCK-BASED COMPENSATION

BancFirst Corporation adopted a nonqualified incentive stock option plan (the "BancFirst ISOP") in May 1986. The Company amended the BancFirst ISOP to increase the number of shares to be issued under the plan to 2,800,000 shares in May 2011. At December 31, 2011, 64,860 shares were available for future grants. The BancFirst ISOP will terminate on December 31, 2014. The options are exercisable beginning four years from the date of grant at the rate of 25% per year for four years. Options expire at the end of fifteen years from the date of grant. Options outstanding as of December 31, 2011 will become exercisable through the year 2018. The option price must be no less than 100% of the fair market value of the stock relating to such option at the date of grant.

In June 1999, the Company adopted the BancFirst Corporation Non-Employee Directors' Stock Option Plan (the "BancFirst Directors' Stock Option Plan"). Each non-employee director is granted an option for 10,000 shares. The Company amended the BancFirst Directors' Stock Option Plan to increase the number of shares to be issued under the plan to 205,000 shares in May 2009. At December 31, 2011, 30,000 shares were available for future grants. The options are exercisable beginning one year from the date of grant at the rate of 25% per year for four years, and expire at the end of fifteen years from the date of grant. Options outstanding as of December 31, 2011 will become exercisable through the year 2015. The option price must be no less than 100% of the fair value of the stock relating to such option at the date of grant.

During 2009, the Company repriced stock options granted under the BancFirst ISOP that were held by 27 optionees through an exchange of certain issued and outstanding stock options for new options. The new options were issued with an exercise price equal to the market price of the Company's common stock at the effective date of the exchange and were subject to the seven-year vesting and 15-year term as provided by the plan. The Company's compensation expense related to these options for the year ended December 31, 2009 was reduced by approximately $14,000 due to the unamortized value of the old options being amortized over a new seven-year vesting period. The total incremental compensation expense of $565,000 due to the repricing will be recognized over the seven-year vesting period of the new options.

The Company currently uses newly issued stock to satisfy stock-based exercises, but reserves the right to use treasury stock purchased under the Company's Stock Repurchase Program (the "SRP") in the future.

The following is a summary of the activity under both the BancFirst ISOP and the BancFirst Directors' Stock Option Plan:


	Options			Wgtd. Avg. Exercise Price		Wgtd. Avg. Remaining Contractual Term		Aggregate Intrinsic Value
	(Dollars in thousands, except per share data)
Year Ended December 31, 2011
Outstanding at December 31, 2010		1,172,181		$	28.32
Options granted		180,000			39.39
Options exercised		(48,750	)		19.76
Options canceled, forfeited, or expired		(5,000	)		37.50

Outstanding at December 31, 2011		1,298,431			30.14		8.66	$	9,607

Exercisable at December 31, 2011		706,731			23.27		5.34	$	10,083

Year Ended December 31, 2010
Outstanding at December 31, 2009		1,209,553		$	27.41
Options granted		49,000			41.64
Options exercised		(74,972	)		21.49
Options canceled, forfeited, or expired		(11,400	)		33.59

Outstanding at December 31, 2010		1,172,181			28.32		8.58	$	15,085

Exercisable at December 31, 2010		699,656			21.95		6.13	$	13,465

The following table is a summary of the Company's non-vested options as of December 31, 2011, and any changes during the year ending December 31, 2011:


	Options
Non-vested at December 31, 2010		472,525
Options granted		180,000
Options vested		(55,825	)
Options forfeited		(5,000	)

Non-vested at December 31, 2011		591,700

The following table has additional information regarding options granted and options exercised under both the BancFirst ISOP and the BancFirst Directors' Stock Option Plan:


	Year Ended December 31,
	2011		2010		2009
	(Dollars in thousands, except per share data)
Weighted average grant-date fair value per share of options granted	$	12.79	$	15.69	$	20.37
Total intrinsic value of options exercised		912		1,445		314
Cash received from options exercised		963		1,611		378
Tax benefit realized from options exercised		353		559		122

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model and is based on certain assumptions including risk-free rate of return, dividend yield, stock price volatility, and the expected term. The fair value of each option is expensed over its vesting period.

The following table is a summary of the Company's recorded stock-based employee compensation expense:


	Year Ended December 31,
	2011		2010		2009
	(Dollars in thousands)
Stock-based employee compensation expense	$	1,375	$	1,218	$	1,073
Tax		532		471		415

Stock-based employee compensation expense, net of tax	$	843	$	747	$	658

The Company will continue to amortize the remaining fair value of stock options over the remaining vesting period of approximately seven years. The following table shows the remaining fair value of stock options:


		December 31, 2011
		(Dollars in thousands)
Fair value of stock options		$ 6,360

The following table shows the assumptions used for computing stock-based employee compensation expense under the fair value method:

Year Ended December 31,

2011

2010

2009

Risk-free interest rate

1.97% to 3.61%

2.62% to 4.00%

2.17% to 3.64%

Dividend yield

2.00%

1.50%

Stock price volatility

25.26% to 38.43%

27.28% to 38.61%

52.71% to 74.84%

Expected term

10Yrs

The risk-free interest rate is determined by reference to the spot zero-coupon rate for the U.S. Treasury security with a maturity similar to the expected term of the options. The dividend yield is the expected yield for the expected term. The stock price volatility is estimated from the recent historical volatility of the Company's stock. The expected term is estimated from the historical option exercise experience.

In May 1999, the Company adopted the BancFirst Corporation Directors' Deferred Stock Compensation Plan (the "BancFirst Deferred Stock Compensation Plan"). The Company amended the BancFirst Deferred Stock Compensation Plan to increase the number of shares to be issued under the plan to 80,000 shares in May 2009. Under the plan, directors and members of the community advisory boards of the Company and its subsidiaries may defer up to 100% of their board fees. They are credited for each deferral with a number of stock units based on the current market price of the Company's stock, which accumulate in an account until such time as the director or community board member terminates serving as a board member. Shares of common stock of the Company are then distributed to the terminating director or community board member based upon the number of stock units accumulated in his or her account. A summary of the accumulated stock units is as follows:


	December 31,
	2011		2010
Accumulated stock units		51,190		47,971
Average price	$	33.21	$	32.89