14.	Share-based Compensation:

The Company’s 2006 Stock Option and Equity Compensation Plan (the “2006 SOEC Plan”) authorizes the award of up to 1,550,000 shares in stock-based awards. The awards granted under this plan are service-based and are subject to vesting. The Compensation Committee of the Board of Directors may impose any terms or conditions on the vesting of an award that it determines to be appropriate. Awards granted generally vest over four years and have a maximum life of ten years. Awards may be granted at exercise prices of not less than 100 percent of the fair market value of the Company’s common stock at the grant date.

Pursuant to the 2006 SOEC Plan, incentive stock options (“ISOs”), nonqualified stock options, restricted stock, restricted stock units (“RSUs”), or stock appreciation rights (“SARs”) may be awarded to attract and retain the best available personnel to the Corporation and its subsidiaries. SARs may be settled in common stock or cash as determined at the date of issuance. Liability-based awards (including all cash-settled SARs) have no impact on the number of shares available to be issued within the plan. Additionally, non-qualified option awards and restricted stock awards may be granted to directors under the terms of this plan.

Prior to April 2006, incentive stock option (“ISO”) and non-qualified option awards were granted to employees and directors under the Company’s 1999 Employees’ Stock Option Plan and the Company’s 1999 Directors’ Stock Option Plan. The Company has stock options outstanding under both of these plans. Subsequent to the annual shareholders’ meeting in April 2006 all shares available under these plans were deregistered and are no longer available for future grants.

The following tables identify the compensation expenses recorded and tax benefits received by the Company in conjunction with its share-based compensation plans for the years ended December 31, 2012, 2011, and 2010:


	2012				2011						2010
	Compensation Expense		Tax Benefit		Compensation Expense (Benefit)			Tax Benefit (Expense)			Compensation Expense		Tax Benefit
Equity-based awards:
Director restricted stock	$	70	$	25	$	56		$	20		$	56	$	20
Director stock options		—		—		1			—			16		6
Employee stock options		122		—		173			—			246		—
Employee stock SARs		193		68		248			87			331		116
Employee RSUs		490		172		195			68			—		—
Liability-based awards:
Employee cash SARs		—		—		(70	)		(25	)		224		78

	$	875	$	265	$	603		$	150		$	873	$	220

Prior to 2011, the Company granted stock options to selected employees and directors. The following table summarizes information about stock option activity under all plans for the years ended December 31, 2012, 2011, and 2010:


	2012					2011					2010
	Options Outstanding			Weighted Average Exercise Price		Options Outstanding			Weighted Average Exercise Price		Options Outstanding			Weighted Average Exercise Price
Balance, beginning of year		412,943		$	13.74		447,693		$	13.61		518,275		$	13.85
Granted		—			—		—			—		62,475			11.30
Exercised		(28,999	)		6.83		(14,000	)		6.38		(16,408	)		6.37
Forfeited or expired		(16,038	)		16.86		(20,750	)		15.81		(116,649	)		14.46

Balance, end of year		367,906		$	14.15		412,943		$	13.74		447,693		$	13.61

Options exercisable, end of year		312,020		$	14.60		295,168		$	14.36		249,177		$	14.15

A summary of non-vested stock option activity during the current fiscal year is presented below:


	Non-vested Options			Weighted Average Grant Date Fair Value
Balance, beginning of year		117,775		$	3.32
Granted		—			—
Vested		(61,889	)		3.08
Forfeited, expired, or exercised		—			—

Balance, end of year		55,886		$	3.58

The total intrinsic value (which is the amount by which the stock price exceeds the exercise price) of both options outstanding and options exercisable as of December 31, 2012, was $5. The weighted average remaining contractual term of options exercisable was 5.1 years as of December 31, 2012. The total intrinsic value of options exercised was $29, $35, and $30, in the years ended December 31, 2012, 2011, and 2010, respectively. During the years ended December 31, 2012, 2011, and 2010, the amount of cash received from the exercise of stock options was $69, $89, and $104, respectively. As of December 31, 2012, there was $83 of total unrecognized compensation cost related to non-vested stock options which is expected to be recognized over a weighted average period of 1.1 years.

In addition to the standard option exercise, in August 2012, the Company’s Board of Directors approved a transaction involving the exchange of shares of the Company’s common stock in partial payment of the option exercise consideration of one officer to exercise vested options. On September 6, 2012, the officer exercised 18,333 outstanding options using an aggregate of $1 of cash and 14,166 shares of common stock. The shares exchanged as option exercise consideration were priced at the closing price of the Company common stock on that day. The transaction resulted in net issuance of 4,167 shares.

Prior to 2011, the Company granted SARs settled in stock to selected employees. The following table summarizes information about activity on SARs settled in stock for the years ended December 31, 2012, 2011, and 2010:


	2012					2011					2010
	Stock-settled SARs Outstanding			Weighted Average Exercise Price		Stock-settled SARs Outstanding			Weighted Average Exercise Price		Stock-settled SARs Outstanding			Weighted Average Exercise Price
Balance, beginning of year		405,340		$	13.71		460,915		$	13.75		401,188		$	14.63
Granted		—			—		—			—		130,499			11.29
Exercised		—			—		—			—		—			—
Forfeited or expired		(18,268	)		13.07		(55,575	)		14.06		(70,772	)		14.22

Balance, end of year		387,072		$	13.74		405,340		$	13.71		460,915		$	13.75

Stock-settled SARs exercisable, end of year		309,980		$	14.28		247,930		$	14.80		183,330		$	15.64

A summary of non-vested stock-settled SARs activity during the current fiscal year is presented below:


	Non-vested Stock-settled SARs			Weighted Average Grant Date Fair Value
Balance, beginning of year		157,410		$	3.37
Granted		—			—
Vested		(75,436	)		3.07
Forfeited, expired, or exercised		(4,882	)		3.78

Balance, end of year		77,092		$	3.64

There is no intrinsic value on the Company’s outstanding stock-settled SARs. The weighted average remaining contractual term of exercisable stock-settled SARs was 5.7 years as of December 31, 2012. As of December 31, 2012, there was $153 of total unrecognized compensation cost related to non-vested stock-settled SARs which is expected to be recognized over a weighted average period of 1.1 years.

Prior to 2011, the Company granted SARs settled in cash to selected employees. The following table summarizes information about activity on SARs settled in cash for the years ended December 31, 2012, 2011, and 2010:


	2012					2011					2010
	Cash-settled SARs Outstanding			Weighted Average Exercise Price		Cash-settled SARs Outstanding			Weighted Average Exercise Price		Cash-settled SARs Outstanding			Weighted Average Exercise Price
Balance, beginning of year		230,607		$	14.81		250,229		$	14.78		272,711		$	14.75
Granted		—			—		—			—		—			—
Exercised		—			—		—			—		—			—
Forfeited or expired		(23,844	)		14.50		(19,622	)		14.45		(22,482	)		14.37

Balance, end of year		206,763		$	14.84		230,607		$	14.81		250,229		$	14.78

Cash-settled SARs exercisable, end of year		190,236		$	15.09		176,446		$	15.43		139,700		$	15.75

A summary of non-vested stock-settled SARs activity during the current fiscal year is presented below:


	Non-vested Cash-settled SARs			Weighted Average Grant Date Fair Value
Balance, beginning of year		54,161		$	2.48
Granted		—			—
Vested		(35,416	)		2.33
Forfeited, expired, or exercised		(2,218	)		2.76

Balance, end of year		16,527		$	2.76

There is no intrinsic value on the Company’s outstanding cash-settled SARs. The weighted average remaining contractual term of exercisable cash-settled SARs was 5 years as of December 31, 2012.

In 2011, the Company began granting RSUs to selected employees. The RSUs vest equally over 4 years. The Company’s RSUs do not accrue dividends and the grantees do not have voting rights. No RSUs were granted prior to 2011.

The following table provides information regarding RSU activity during 2012 and 2011:


	2012					2011
	Restricted Stock Units Outstanding			Weighted Average Grant Date Fair Value		Restricted Stock Units Outstanding			Weighted Average Grant Date Fair Value
Balance, beginning of year		125,888		$	9.40		—		$	—
Granted		164,519			8.76		127,192			9.40
Vested shares issued		(18,821	)		9.40		—			—
Vested shares forfeited for taxes		(11,517	)		9.40		—			—
Forfeited or expired		(8,740	)		9.20		(1,304	)		9.40

Balance, end of year		251,329		$	8.99		125,888		$	9.40

Under the terms of the 2006 SOEC Plan, shares of Pacific Continental Corporation common stock are to be issued as soon as is practicable upon vesting of RSUs.