Note 14 - Stock-Based Compensation

12 Months Ended

Dec. 31, 2011

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Note 14.                 Stock-Based Compensation

Stock-based compensation expense was reflected in the consolidated financial statements as follows for the years ended December 31, 2011, 2010, and 2009.

	2011		2010			2009
Stock option and incentive plans	$	587,900	$	475,835		$	562,063
Stock purchase plan		58,519		57,436			47,650
Stock appreciation rights		49,988		(45,159	)		(96,750	)
	$	696,407	$	488,112		$	512,963

Stock option and incentive plans:

The Company’s Board of Directors adopted in January 2008, and the stockholders approved in May 2008, the QCR Holdings, Inc. 2008 Equity Incentive Plan (“2008 Equity Incentive Plan”).  Up to 250,000 shares of common stock may be issued to employees and directors of the Company and its subsidiaries pursuant to the exercise of nonqualified stock options and restricted stock granted under the 2008 Equity Incentive Plan.  As of December 31, 2011, there are 22,130 remaining options available for grant under this plan.  The Company’s Board of Directors adopted in February 2010, and the stockholders approved in May 2010, the QCR Holdings, Inc. 2010 Equity Incentive Plan (“2010 Equity Incentive Plan”).  Up to 350,000 shares of common stock may be issued to employees and directors of the Company and its subsidiaries pursuant to the exercise of the nonqualified stock options and restricted stock granted under the 2010 Equity Incentive Plan.  As of December 31, 2011, there were 208,576 remaining options available for grant under this plan.  The Stock Option Plan, the 1997 Stock Incentive Plan, the 2004 Stock Incentive Plan, the 2008 Equity Incentive Plan, and the 2010 Equity Incentive Plan  (collectively, “the stock option plans”) are administered by the Compensation Committee appointed by the Board of Directors (the “Committee”).

The number and exercise price of options granted under the stock option plans is determined by the Committee at the time the option is granted.  In no event can the exercise price be less than the value of the common stock at the date of the grant for incentive stock options.  All options have a 10-year life and will vest and become exercisable from 1-to-5 years after the date of the grant.  Only nonqualified stock options have been issued to date.

In the case of nonqualified stock options, the stock option plans provide for the granting of "Tax Benefit Rights" to certain participants at the same time as these participants are awarded nonqualified options.  Each Tax Benefit Right entitles a participant to a cash payment, which is expensed by the Company, equal to the excess of the fair market value of a share of common stock on the exercise date over the exercise price of the related option multiplied by the difference between the rate of tax on ordinary income over the rate of tax on capital gains (federal and state).

A summary of the stock option plans as of December 31, 2011, 2010, and 2009 and changes during the years then ended is presented below:

	December 31,
	2011					2010					2009
				Weighted					Weighted					Weighted
				Average					Average					Average
				Exercise					Exercise					Exercise
	Shares			Price		Shares			Price		Shares			Price
Outstanding, beginning		510,612		$	14.04		474,416		$	14.44		408,465		$	15.38
Granted		73,250			8.23		67,760			9.00		75,740			9.21
Exercised		(36,459	)		8.30		(5,754	)		10.24		-			-
Forfeited		(12,273	)		8.28		(25,810	)		9.68		(9,789	)		13.24
Outstanding, ending		535,130			13.85		510,612			14.04		474,416			14.44
Exercisable, ending		355,398					321,336					285,293
Weighted average fair value per option of options granted during the period	$	2.74				$	2.89				$	2.71

A further summary of options outstanding as of December 31, 2011 is presented below:

		Options Outstanding
				Weighted				Options Exercisable
				Average		Weighted				Weighted
				Remaining		Average				Average
Range of		Number		Contractual		Exercise		Number		Exercise
Exercise Prices		Outstanding		Life		Price		Exercisable		Price
$	7.45 to $8.93		68,125		8.77	$	8.09		6,325	$	8.34
$	9.00 to $11.64		161,995		6.98		9.25		67,778		9.44
$	13.25 to $16.85		157,805		5.70		15.94		134,590		15.94
$	17.00 to $18.60		50,320		3.74		18.06		49,820		18.06
$	18.67 to $20.90		67,885		3.17		19.48		67,885		19.48
$	21.00 to $22.00		29,000		3.17		21.28		29,000		21.28
			535,130						355,398

Stock purchase plan:

The Company’s Board of Directors and its stockholders adopted in October 2002 the QCR Holdings, Inc. Employee Stock Purchase Plan (the “Purchase Plan”).  As of January 1, 2011, there were 96,797 shares of common stock available for issuance under the Purchase Plan.  For each six-month offering period, the Board of Directors will determine how many of the total number of available shares will be offered.  The purchase price is the lesser of 90% of the fair market value at the date of the grant or the investment date.  The investment date, as established by the Board of Directors, is the date common stock is purchased after the end of each calendar quarter during an offering period.  The maximum dollar amount any one participant can elect to contribute in an offering period is $7,500.  Additionally, the maximum percentage that any one participant can elect to contribute is 8% of his or her compensation for the years ended December 31, 2011, 2010, and 2009.  During the year ended December 31, 2011, 34,860 shares were granted and 36,174 purchased.  Shares granted during the year ended December 31, 2011 had a weighted average fair value of $1.68 per share.

Stock appreciation rights:

The 1997 Stock Incentive Plan and 2004 Stock Incentive Plan allow the granting of stock appreciation rights (“SARs”).  SARs are rights entitling the grantee to receive cash equal to the fair market value of the appreciation in the market value of a stated number of shares from the date of grant.  Like options, the number and exercise price of SARs granted is determined by the Committee.  The SARs vest 20% per year, and the term of the SARs may not exceed 10 years from the date of the grant.  As of December 31, 2011, 2010, and 2009, there were 0, 36,350, and 52,800 SARs, respectively, outstanding and exercisable.  As of December 31, 2011 and 2010, the liability related to the SARs totals $0 and $17,339, respectively.  Payments made on SARs were $67,326, $35,040, and $0 during the years ended December 31, 2011, 2010 and 2009, respectively.  As of December 31, 2011, all SARs have expired or been paid out.