Stock Based Compensation

3 Months Ended

Mar. 31, 2014

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

Stock Based Compensation

Stock Based Compensation

LCNB established an Ownership Incentive Plan (the "Plan") during 2002 that allowed for stock-based awards to eligible employees, as determined by the Board of Directors.  The awards were made in the form of stock options, share awards, and/or appreciation rights.  The Plan provided for the issuance of up to 200,000 shares. The plan expired on April 16, 2012. Any outstanding unexercized options, however, continue to be exercisable in accordance with their terms.

Options granted to date vest ratably over a five-year period and expire ten years after the date of grant. Stock options outstanding at March 31, 2014 are as follows:

	Outstanding Stock Options				Exercisable Stock Options
Exercise Price Range	Number	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)	Number	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)
$9.00 - $10.99	23,494	$	9.00	4.8	23,494	$	9.00	4.8
$11.00 - $12.99	63,354	12.05		6.3	42,249	12.02		5.9
$17.00 - $18.99	12,962	18.41		2.4	12,962	18.41		2.4
	99,810	12.16		5.4	78,705	12.17		5.0

The following table summarizes stock option activity for the periods indicated:

	2014				2013
	Options		Weighted Average Exercise Price		Options	Weighted Average Exercise Price
Outstanding, January 1	104,966		$	12.43	110,586	$	12.42
Granted	—		—		—	—
Exercised	—		—		—	—
Expired	(5,156	)	17.66		—	—
Outstanding, March 31	99,810		12.16		110,586	12.42
Exercisable, March 31	78,705		12.17		73,519	12.82

The aggregate intrinsic value (the amount by which the current market value of the underlying stock exceeds the exercise price of the option) for options outstanding at March 31, 2014 that were "in the money" (market price greater than exercise price) was $528,000.  The aggregate intrinsic value at that date for only the options that were exercisable was $418,000.  The aggregate intrinsic value for options outstanding at March 31, 2013 that were in the money was $499,000 and the aggregate intrinsic value at that date for only the options that were exercisable was $312,000.  The intrinsic value changes based upon fluctuations in the market value of LCNB's stock.

Total expense related to options included in salaries and employee benefits in the consolidated statements of income for the three months ended March 31, 2014 and 2013 was $7,000 and $9,000, respectively.