Equity Based Compensation

6 Months Ended

Jun. 30, 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 six months of 2012 and 2011, the Company did not grant any stock options. Stock based compensation expense related to outstanding stock options was $69 and $140 for the three months ended June 30, 2012 and 2011, respectively and $187 and $329 for the six months ended June 30, 2012 and 2011, 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 month period ended June 30, 2012, 5,000 shares of restricted stock were granted compared to none in 2011. During the first six months of 2012, the Company granted 96,330 shares of restricted stock compared to 38,681 for the same period in 2011. All 2012 shares granted, 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 $481 and $333 for the three months ended June 30, 2012 and 2011, respectively, and is reflected in the Consolidated Statement of Operations in other underwriting expenses. For the six months ended June 30, 2012 and 2011, $885 and $683 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 $66 in expense for the three months ended June 30, 2012 and 2011, respectively, related to stock awards related to Director compensation. For the six months ended June 30, the company expensed $165 and $136 in 2012 and 2011, respectively, related to stock awards made as a portion of Director compensation.