Equity Based Compensation

3 Months Ended

Mar. 31, 2012

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, 2011. During the first three months of 2012 and 2011, the Company did not grant any stock options. Stock based compensation expense related to outstanding stock options was $118 and $189 for the three months ended March 31, 2012 and 2011, respectively, and is reflected in net earnings as part of other underwriting expenses.

In addition to stock options discussed above, the Company may grant restricted shares to employees under the incentive stock plan. During the first three months of 2012, the Company granted 91,330 shares of restricted stock compared to 38,681 for the same period in 2011. All shares vest on the grant date anniversary ratably over three years at 25%, 25%, and 50%, respectively. Stock based compensation expense related to the restricted shares was $404 and $349 for the three months ended March 31, 2012 and 2011, respectively, and is reflected in net earnings as part of other underwriting expenses. Additionally, the Company recorded $82 and $70 in expense for the first three months ended March 31, 2012 and 2011, respectively, related to stock awards made as a portion of Director compensation.