Equity Based Compensation

9 Months Ended

Sep. 30, 2011

Equity Based Compensation [Abstract]

Equity Based Compensation

Note 5 — Equity Based Compensation

The Company’s incentive stock plan grants incentive stock options to employees. The majority of the options outstanding under the plan vest evenly over a three year period and have a term of 10 years. The Company uses the Black-Scholes option pricing model to value stock options. The Company’s methodology for valuing stock options has not changed from December 31, 2010. During the first nine months of 2011, the Company did not grant any stock options compared to 78,775 for the same period of 2010. Stock based compensation expense related to outstanding stock options was $87 and $267 for the three months ended September 30, 2011 and 2010, respectively and $416 and $709 for the nine months ended September 30, 2011 and 2010, respectively, and is reflected in the Consolidated Statement of Operations in other underwriting expenses.

In addition to stock options discussed above, the Company grants restricted shares to employees under the incentive stock plan. During the three months ended September 30, 2011, the company granted 212,862 shares of stock compared to no shares granted for the three month period 2010. During the first nine months of 2011, the Company granted 251,543 shares of restricted stock compared to 209,254 for the same period in 2010. Of the 2011 shares, 43,681 shares granted vest on the grant date anniversary ratably over three years at 25%, 25%, and 50%, respectively. During the period 205,000 shares were granted pursuant to performance goal attainment with a five year vest. Additionally, 5,000 shares were granted with a five year cliff vest. Stock based compensation expense related to the restricted shares was $394 and $312 for the three months ended September 30, 2011 and 2010, respectively, and is reflected in the Consolidated Statement of Operations in other underwriting expenses. For the nine months ended September 30, 2011 and 2010, $1,077 and $829 were recorded as compensation expense, respectively, and is reflected in the Consolidated Statement of Operations in other underwriting expenses. Additionally, the Company expensed $83 and $80 in expense for the three months ended September 30, 2011 and 2010, respectively, related to stock awards related to Director compensation. For the nine months ended September 30, the company expensed $219 and $240 in 2011 and 2010, respectively, related to Director compensation.