Share-Based Compensation Plans

6 Months Ended

Jun. 30, 2011

Share-Based Compensation Plans

Share-Based Compensation Plans

(6.) SHARE-BASED COMPENSATION PLANS

The Company maintains certain stock-based compensation plans, approved by the Company's shareholders that are administered by the Board, or the Management Development and Compensation Committee of the Board.  The share-based compensation plans were established to allow for the granting of compensation awards to attract, motivate and retain employees, executive officers and non-employee directors who contribute to the success and profitability of the Company and to give such persons a proprietary interest in the Company, thereby enhancing their personal interest in the Company's success.

The Company awarded 45,870 restricted shares of common stock to certain members of management during the six months ended June 30, 2011.  The weighted average market price of the restricted stock on the date of grant was $19.25.  Either a service requirement or both service and performance requirements must be satisfied before the participant becomes vested in the shares of common stock.  Where applicable, the performance period for the awards is the Company's fiscal year ending on December 31, 2011.  The restricted stock awards granted to management in 2011 do not have rights to dividends or dividend equivalents.  During the six months ended June 30, 2011, the Company granted 7,200 restricted shares of common stock to directors, of which 3,600 shares vested immediately and 3,600 shares will vest after completion of a one-year service requirement.  The market price of the restricted stock on the date of grant was $16.55.  The director awards were granted with nonforfeitable rights to dividends.

The following is a summary of restricted stock award activity for the six months ended June 30, 2011:

			Weighted
			Average
			Market
		Number of	Price at
		Shares	Grant Date
Outstanding at beginning of year		150,796	$		12.76
	Granted	53,070	18.88
	Released	(33,240)	14.63
Outstanding at end of period		170,626	$	14.30

The Company amortizes the expense related to restricted stock awards over the vesting period.  Share-based compensation expense is included in the consolidated statements of income under salaries and employee benefits for awards granted to management and in other noninterest expense for awards granted to directors.  The share-based compensation expense included in the consolidated statements of income is as follows for the periods indicated (in thousands):

	Three months ended				Six months ended
	June 30,				June 30,
	2011		2010		2011		2010
Stock options:
Management Stock Incentive Plan	$	14	$	24	$	28	$	50
Director Stock Incentive Plan		4		11		14		22
tock options		18		35		42		72
Restricted stock awards:
Management Stock Incentive Plan		253		212		445		382
Director Stock Incentive Plan		74		74		89		88
estricted stock awards		327		286		534		470
Total share-based compensation	$	345	$	321	$	576	$	542