Stock-Based Compensation

9 Months Ended

Sep. 30, 2011

Stock-Based Compensation

Note 5. Stock-Based Compensation

Stock-based compensation granted under the Company’s stock plans is expensed in tranches over the vesting period. Options and non-performance based grants generally vest equally over a four year period and the options have a maximum term of ten years. Certain non-performance based grants vest over five years with one-third vesting in each of the third, fourth and fifth years. The Company’s performance based share grants generally consist of two types of awards. The restricted stock units issued in 2011 will cliff vest in three years, generally with 50% vesting in full, while the vesting of the remaining 50% will be dependent on the compound annual growth in book value per share for the three years immediately prior to the vesting date, with actual shares that vest ranging between 150% to 0% of that portion of the original award. Those issued prior to 2011 generally vest over five years with one-third vesting in each of the third, fourth and fifth years, dependent on the rolling three-year average return on equity based on the three years prior to the year in which the vesting occurs, with actual shares that vest ranging between 150% to 0% of the original award.

The amounts charged to expense for stock-based compensation for the three and nine months ended September 30, 2011 and 2010 are presented in the following table:

		September 30,			September 30,		September 30,			September 30,
	Three Months Ended September 30,					Nine Months Ended September 30,
In thousands	2011			2010		2011			2010
Restricted stock units	$	775		$	1,720	$	2,254		$	4,704
Directors restricted stock grants(1)		64			45		184			135
Employee stock purchase plan		1			61		124			158
Stock appreciation rights(2)		(47	)		108		(100	)		(248	)
Stock options		—			—		—			—
Total stock based compensation	$	793		$	1,934	$	2,462		$	4,749

(1) Relates to non-employee directors serving on the Parent Company’s Board of Directors, all who have been elected by the Company’s shareholders, as well as NUAL’s Board of Directors.

(2) All issued stock appreciation rights were exercised during 2011. The Company will no longer issue awards from the Stock Appreciation Rights Plan as a result of the 2005 Amended and Restated Stock Incentive Plan.