11.

Stock-Based Compensation

The Company has a nonqualified stock option plan for certain employees of the Company. This plan provides for the granting of nonqualified options to purchase shares of common stock in the Company. No option may be granted under this plan for less than the fair market value of the common stock, defined by the plan as the average of the highest reported asked price and the lowest reported bid price, on the date of the grant. The benefits or amounts that may be received by or allocated to any particular officer or employee of the Company under this plan will be determined in the sole discretion of the personnel and compensation committee of the Company’s board of directors. While the vesting period and the termination date for the employee plan options are determined when options are granted, all such employee options outstanding at June 30, 2015 were issued with a vesting date three years after issuance and an expiration date seven years after issuance.

During the second quarter of 2015, the Company adopted the Bank of the Ozarks, Inc. Non-Employee Director Stock Plan (the “Director Plan”) that provides for awards of common stock to eligible non-employee directors. The Director Plan grants to each director who is not otherwise an employee of the Company, or any subsidiary, shares of common stock on the day of his or her election as director of the Company at each annual shareholders meeting, or any special meeting called for the purpose of electing a director or directors of the Company, and upon appointment for the first time as director of the Company. The number of shares of common stock to be awarded will be the equivalent of $25,000 worth of shares of common stock based on the average of the highest reported asked price and lowest reported bid price on the grant date. The common stock awarded under this plan is fully vested on the grant date. The aggregate number of shares of common stock which may be issued as awards under this plan will not exceed 50,000 shares, subject to certain adjustments. For the three months ended June 30, 2015, the Company issued 7,657 shares of common stock and incurred $0.3 million in stock-based compensation expense related to common-stock awards issued under the Director Plan.

Prior to the adoption of the Director Plan, the Company had a nonqualified stock option plan for non-employee directors. No options were granted under this plan during the six months ended June 30, 2015. All options previously granted under this plan were exercisable immediately and expire ten years after issuance.

All shares issued in connection with options exercised under both the employee and non-employee director stock option plans were in the form of newly issued shares.

The following table summarizes stock option activity for both the employee and non-employee director stock option plans for the period indicated.


	Options			Weighted- Average Exercise Price/Share		Weighted-Average Remaining Contractual Life (in years)		Aggregate Intrinsic Value (in thousands)

Six Months Ended June 30, 2015:
Outstanding – January 1, 2015		1,859,350		$	23.49
Granted		2,000			40.82
Exercised		(99,050	)		10.06
Forfeited		(74,350	)		26.13

Outstanding – June 30, 2015		1,687,950			24.18		5.3	$	36,400	⁽¹⁾

Fully vested and exercisable – June 30, 2015		315,550		$	14.17		4.6	$	9,966	⁽¹⁾

Expected to vest in future periods		1,248,680

Fully vested and expected to vest – June 30, 2015⁽²⁾		1,564,230		$	23.58		5.2	$	34,676	⁽¹⁾

(1)	Based on closing price of $45.75 per share on June 30, 2015.

(2)	At June 30, 2015, the Company estimated that outstanding options to purchase 123,720 shares of its common stock would not vest and would be forfeited prior to their vesting date.

Intrinsic value for stock options is defined as the amount by which the current market price of the underlying stock exceeds the exercise price. For those stock options where the exercise price exceeds the current market price of the underlying stock, the intrinsic value is zero. The total intrinsic value of options exercised during the three months ended June 30, 2015 and 2014 was $1.4 million and $0.2 million, respectively. The total intrinsic value of options exercised during the six months ended June 30, 2015 and 2014 was $2.8 million and $4.1 million, respectively.

Options to purchase 2,000 shares and 52,000 split-adjusted shares of the Company’s stock were issued during the six months ended June 30, 2015 and 2014, respectively. Stock-based compensation expense for stock options included in non-interest expense was $0.6 million and $0.8 million for the three months ended June 30, 2015 and 2014, respectively, and $1.2 million for both six month periods ended June 30, 2015 and 2014. Total unrecognized compensation cost related to non-vested stock option grants was $3.7 million at June 30, 2015 and is expected to be recognized over a weighted-average period of 2.0 years.

The Company has a restricted stock and incentive plan whereby all officers and employees of the Company are eligible to receive awards of restricted stock, restricted stock units or performance awards. The benefits or amounts that may be received by or allocated to any particular officer or employee of the Company under this plan will be determined in the sole discretion of the Company’s board of directors or its personnel and compensation committee. Shares of common stock issued under the plan may be shares of original issuance or shares held in treasury that have been reacquired by the Company. While the vesting period for awards under the plan is determined by the personnel and compensation committee at the time of grant, all restricted stock awards granted under the plan have a vesting date of three years after issuance.

The following table summarizes non-vested restricted stock activity for the period indicated.


	Six Months Ended June 30, 2015
Outstanding – January 1, 2015		444,700
Granted		245,300
Forfeited		(29,875	)
Vested		0

Outstanding – June 30, 2015		660,125


Weighted-average grant date fair value	$	25.27

The fair value of the restricted stock awards is amortized to compensation expense over the vesting period and is based on the market price of the Company’s common stock at the date of grant multiplied by the number of shares granted that are expected to vest. Stock-based compensation expense for restricted stock included in non-interest expense was $1.4 million and $0.9 million for the quarters ended June 30, 2015 and 2014, respectively, and $2.7 million and $1.8 million for the six months ended June 30, 2015 and 2014, respectively. Unrecognized compensation expense for non-vested restricted stock awards was $9.5 million at June 30, 2015 and is expected to be recognized over a weighted-average period of 2.2 years.