Equity Based Compensation

9 Months Ended

Sep. 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 nine 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 $87 for the three months ended September 30, 2012 and 2011, respectively and $305 and $416 for the nine months ended September 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 September 30, 2012, no shares of restricted stock were granted compared to 212,862 in 2011. During the first nine months of 2012, the Company granted 96,330 shares of restricted stock compared to 251,543 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 $509 and $394 for the three months ended September 30, 2012 and 2011, respectively, and is reflected in the Consolidated Statement of Operations in other underwriting expenses. For the nine months ended September 30, 2012 and 2011, $1,394 and $1,077 were recorded as compensation expense, respectively, and is reflected in the Consolidated Statement of Operations in other underwriting expenses. Additionally, the Company expensed $83 for both the three months ended September 30, 2012 and 2011, related to stock awards issued to its Board of Directors. For the nine months ended September 30, the company expensed $248 and $219 in 2012 and 2011, respectively, related to stock awards.