Equity Based Compensation

6 Months Ended

Jun. 30, 2013

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, 2012. During the first six months of 2013 and 2012, the Company did not grant any stock options. Stock based compensation expense related to outstanding stock options was $10 and $69 for the three months ended June 30, 2013 and 2012, respectively and $56 and $187 for the six months ended June 30, 2013 and 2012, 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, 2013, no restricted stock shares were granted compared to 5,000 in 2012. During the first six months of 2013, the Company granted 380,839 shares of restricted stock compared to 96,330 for the same period in 2012. Of the shares granted, 79,339 shares vest on the grant date anniversary ratably over three years at 25%, 25%, and 50%, respectively. The remaining 301,500 shares vest pursuant to a vesting schedule based on certain performance criteria. Stock based compensation expense related to the restricted shares was $570 and $481 for the three months ended June 30, 2013 and 2012, respectively and is reflected in the Consolidated Statement of Operations in other underwriting expenses. For the six months ended June 30, 2013 and 2012, $1,014 and $885 of compensation expense, respectively, is reflected in the Consolidated Statement of Operations in other underwriting expenses. Additionally, the Company expensed $82 and $83 in expense for the three months ended June 30, 2013 and 2012, respectively, related to stock awards related to Director compensation. For the six months ended June 30, the company expensed $165 and $165 in 2013 and 2012, respectively, related to stock awards made as a portion of Director compensation.