pab bankshares, inc. - SNL Financial

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 19.
STOCK PLANS AND STOCK-BASED COMPENSATION
The Company has two fixed stock option plans under which it has granted options to its employees and directors to
purchase common stock at the fair market price on the date of grant. Both plans provide for “incentive stock options” and
“non-qualified stock options”. The incentive stock options are intended to qualify under Section 422 of the Internal
Revenue Code for favorable tax treatment. It is the Company’s policy to issue new shares for stock option exercises.
Under the 1994 Employee Stock Option Plan, the Board of Directors could grant up to 400,000 stock options to employees
of the Company as part of an incentive plan to attract and retain key personnel in the Company. The 1994 Employee
Stock Option Plan expired in 2004. At December 31, 2009, there were 42,483 options outstanding that were granted under
the 1994 Employee Stock Option Plan.
Under the 1999 Stock Option Plan, the Board of Directors can grant up to 600,000 stock options to directors, employees,
consultants and advisors of the Company. On February 28, 2006, the Company’s Board of Directors adopted an
amendment to the 1999 Stock Option Plan to increase the maximum aggregate number of shares of common stock for
which options may be granted from 600,000 shares to 1,400,000 shares and to extend the term of the Plan for ten years
from the date of the adoption of these amendments. This amendment was subsequently approved at the Company’s annual
meeting of shareholders on May 23, 2006. At December 31, 2009, there were 403,283 stock options available for grant
and there were 870,080 options outstanding that were granted under the 1999 Stock Option Plan.
At December 31, 2009, there was approximately $907,000 of unrecognized compensation cost related to stock-based
payments, which is expected to be recognized over a weighted-average period of 2.04 years.
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