The Company has various types of share-based compensation plans. These plans are administered by the Compensation Committee of the Board of Directors, which selects persons eligible to receive awards and determines the number of shares and/or options subject to each award, the terms, conditions and other provisions of the awards.

The Company issues stock options under various plans to directors, officers and other key employees. The option exercise price cannot be less than the fair value of the underlying common stock as of the date of the option grant and the maximum option term cannot exceed ten years. The stock options granted were issued with vesting periods ranging from one-and-a half to seven years. At June 30, 2011, future option or restricted stock awards of 178,265 shares could be made under approved incentive compensation plans.

The stock option plans also permit the granting of Stock Appreciation Rights ("SARs"). SARs entitle the holder to receive, in the form of cash or stock, the increase in the fair value of Company stock from the date of grant to the date of exercise. No SARs have been issued under the plans.

The following table represents the compensation expense that is included in salaries and employee benefits expense and related income tax benefits in the accompanying unaudited consolidated statements of income related to stock options for the periods indicated below.

The Company reported $1,378,000 and $528,000 of excess tax benefits as financing cash inflows during the six months ended June 30, 2011 and 2010, respectively, related to the exercise and vesting of share-based compensation grants. Net cash proceeds from the exercise of stock options were $5,739,000 and $1,131,000 for the six months ended June 30, 2011 and 2010.

The Company uses the Black-Scholes option pricing model to estimate the fair value of share-based awards with the following weighted-average assumptions for the indicated periods:

The assumptions above are based on multiple factors, including historical stock option exercise patterns and post-vesting employment termination behaviors, expected future exercise patterns and the expected volatility of the Company's stock price.

At June 30, 2011, there was $4,941,000 of unrecognized compensation cost related to stock options which is expected to be recognized over a weighted-average period of 3.6 years.

The following table represents the activity related to stock options during the six months ended June 30, 2011 and 2010.

At June 30, 2011, the aggregate intrinsic value of shares underlying outstanding stock options and underlying exercisable stock options was $11,629,000 and $10,986,000. Total intrinsic value of options exercised was $5,000,000 for the six months ended June 30, 2011.

The Company issues restricted stock under various plans for certain officers and directors. A supplemental stock benefit plan adopted in 1999 and the 2001, 2005, 2008, and 2010 Incentive Plans allow grants of restricted stock. The plans allow for the issuance of restricted stock awards that may not be sold or otherwise transferred until certain restrictions have lapsed. The holders of the restricted stock receive dividends and have the right to vote the shares. The fair value of the restricted stock shares awarded under these plans is recorded as unearned share-based compensation, a contra-equity account. The unearned compensation related to these awards is amortized to compensation expense over the vesting period (generally three to seven years). The total share-based compensation expense for these awards is determined based on the market price of the Company's common stock at the date of grant applied to the total number of shares granted and is amortized over the vesting period. As of June 30, 2011, unearned share-based compensation associated with these awards totaled $25,381,000.

The following table represents the compensation expense that was included in salaries and employee benefits expense in the accompanying unaudited consolidated statements of income related to restricted stock grants for the periods indicated below.

The following table represents unvested restricted stock award activity for the six months ended June 30, 2011 and 2010, respectively:

The weighted average grant date fair value of the restricted stock granted during the six months ended June 30, 2011 and 2010 was $56.17 and $59.85, respectively.

As part of the 2008 Incentive Compensation Plan and 2009 Phantom Stock Plan, the Company issues phantom stock awards to certain key officers and employees. The award is subject to a vesting period of five to seven years and is paid out in cash upon vesting. The amount paid per vesting period is calculated as the number of vested "share equivalents" multiplied by the closing market price of a share of the Company's common stock on the vesting date. Share equivalents are calculated on the date of grant as the total award's dollar value divided by the closing market price of a share of the Company's common stock on the grant date. Award recipients are also entitled to a "dividend equivalent" on each unvested share equivalent held by the award recipient. A dividend equivalent is a dollar amount equal to the cash dividends that the participant would have been entitled to receive if the participant's share equivalents were issued in shares of common stock. Dividend equivalents will be deemed to be reinvested as share equivalents that will vest and be paid out on the same date as the underlying share equivalents on which the dividend equivalents were paid. The number of share equivalents acquired with a dividend equivalent shall be determined by dividing the aggregate of dividend equivalents paid on the unvested share equivalents by the closing price of a share of the Company's common stock on the dividend payment date.

The following table represents share and dividend equivalent share award activity during the six months ended June 30, 2011 and 2010.


	Number of share equivalents			Dividend equivalents			Total share equivalents			Value of share equivalents⁽¹⁾
Balance, December 31, 2010		119,194			3,741			122,935		$	7,269,000
Granted		121,824			2,746			124,570			7,180,000
Forfeited share equivalents		(153	)		(1	)		(154	)		(9,000	)
Vested share equivalents		(3,341	)		(217	)		(3,558	)		(206,000	)

Balance, June 30, 2011		237,524			6,269			243,793		$	14,052,000

Balance, December 31, 2009		67,361			1,886			69,247		$	3,565,000
Granted		48,467			1,307			49,774			2,562,000
Forfeited share equivalents		—			—			—			—
Vested share equivalents		(1,107	)		(65	)		(1,172	)		(60,000	)

Balance, June 30, 2010		114,721			3,128			117,849		$	6,067,000

⁽¹⁾	Value of share equivalents is calculated based on the market price of the Company's stock at the end of the respective periods. The market price of the Company's stock was $57.64 and $51.48 on June 30, 2011 and 2010, respectively.

During the six months ended June 30, 2011 and 2010, the Company recorded $833,000 and $98,000, respectively, in compensation expense based on the number of share equivalents vested at the end of the period and the current market price of $57.64 and $51.48 per share of common stock.