Note 14 - Stock-Based Compensation

12 Months Ended

Dec. 31, 2013

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

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, 2013, 2012, and 2011.

	2013		2012		2011
Stock option and incentive plans	$	734,827	$	798,929	$	587,900
Stock purchase plan		57,452		50,831		58,519
Stock appreciation rights		-		-		49,988
	$	792,279	$	849,760	$	696,407

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. 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. The Company’s Board of Directors adopted in February 2013, and the stockholders approved in May 2013, the QCR Holdings, Inc. 2013 Equity Incentive Plan (“2013 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 nonqualified stock options and restricted stock granted under the 2013 Equity Incentive Plan. The 2008 Equity Incentive Plan, the 2010 Equity Incentive Plan, and the 2013 Equity Incentive Plan (collectively, “the stock option plans”) are administered by the Compensation Committee of the Board of Directors (the “Committee”). As of December 31, 2013, there were 294,831 remaining options available for grant under the stock option plans.

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, 2013, 2012, and 2011 and changes during the years then ended is presented below:

	December 31,
	2013					2012					2011
	Shares			Weighted Average Exercise Price		Shares			Weighted Average Exercise Price		Shares			Weighted Average Exercise Price
Outstanding, beginning		608,852		$	13.27		535,130		$	13.85		510,612		$	14.04
Granted		96,232			15.68		102,722			9.30		73,250			8.23
Exercised		(41,258	)		10.06		(17,876	)		9.68		(36,459	)		8.30
Forfeited		(1,320	)		10.53		(11,124	)		10.57		(12,273	)		8.28
Outstanding, ending		662,506			13.82		608,852			13.27		535,130			13.85
Exercisable, ending		419,735					391,378					355,398
Weighted average fair value per option of options granted during the period	$	5.14				$	2.79				$	2.74

A further summary of options outstanding as of December 31, 2013 is presented below:

			Options Outstanding
					Weighted				Options Exercisable
Range of Exercise Prices			Number Outstanding		Average Remaining Contractual Life		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$7.72	to	$8.93		58,510		6.91	$	8.12		22,520	$	8.21
$9.00	to	$11.64		212,004		6.82		9.21		101,355		9.19
$13.25	to	$16.85		243,567		5.90		15.85		149,435		15.99
$17.00	to	$18.60		51,840		2.05		18.05		49,840		18.06
$18.67	to	$20.90		67,885		1.16		19.48		67,885		19.48
$21.00	to	$22.00		28,700		1.16		21.28		28,700		21.28
				662,506						419,735

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”). On May 2, 2012, the Company’s stockholders approved a complete amendment and restatement of the Purchase Plan. As of January 1, 2013, there were 254,851 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, 2013, 2012, and 2011. Information for the stock purchase plan for the years ended December 31, 2013, 2012, and 2011 is presented below:

	2013		2012		2011
Shares granted		27,415		29,671		34,860
Shares purchased		27,110		31,554		36,174
Weighted average fair value per share granted	$	2.10	$	1.71	$	1.68

Stock appreciation rights:

The 1997 Stock Incentive Plan and 2004 Stock Incentive Plan allowed 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 vested 20% per year, and the term of the SARs was not to exceed 10 years from the date of the grant. As of December 31, 2011, all SARs have expired or been paid out; therefore, there was no further liability related to the SARs as of December 31, 2013 and 2012. The final payments totaled $67,326 and were made during the year ended December 31, 2011.