Stock Incentive Plan

6 Months Ended

Jun. 30, 2015

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

Stock Incentive Plan

Stock Incentive Plan

The Company adopted the 2014 Stock Option Plan (“2014 Plan”) following shareholder approval of the 2014 Plan at the 2014 Annual Meeting.  Subsequent to the adoption of the 2014 Plan, no additional grants may be issued under the prior plans.  The 2014 Plan provides for grants of up to 350,000 shares of common stock.

Stock Options:  Under the 2014 Plan and previous plans, certain key employees have been granted the option to purchase set amounts of common stock at the market price on the day the option was granted.  Optionees, at their own discretion, may cover the cost of exercise through the exchange at the then fair value of already owned shares of the Company’s stock.  Options are granted for a 10-year period and vest on a pro-rata basis over the initial three years from grant.

The Company measures the fair value of each stock option at the date of grant using the Black-Scholes option pricing model. For the quarters ended June 30, 2015 and 2014, the Company recognized $22,000 and $16,000, respectively, in stock option compensation expense as a component of salaries and other personnel expense. For the six months ended June 30, 2015 and 2014, the Company recognized $44,000 and $32,000, respectively, in stock option compensation expense as a component of salaries and other personnel expense.

The Company issued 224 shares from the exercise of stock options in the three and six months ended June 30, 2015, respectively. Proceeds from the exercise of stock options in the three and six months ended June 30, 2015 were $49,000, respectively. The Company withheld $49,000 to pay for stock option exercises or income taxes that resulted from the exercise of stock options in the three and six months ended June 30, 2015, respectively.

Proceeds from the exercise of stock options in the three and six months ended June 30, 2014 were $64,000, respectively. The Company withheld no funds to pay for stock option exercises or income taxes that resulted from the exercise of stock options in the three and six months ended June 30, 2014, respectively.

There were no stock options granted in the second quarter of 2015.

Restricted Stock Units:  The Company grants restricted stock units to certain key employees periodically.  Recipients of restricted stock units do not pay any cash consideration to the Company for the shares and receive all dividends with respect to such shares when the shares vest. Restricted stock units cliff vest at the end of a three-year time period. For the three months ended June 30, 2015 and 2014, the Company recognized $97,000 and $66,000, respectively, in restricted stock unit compensation expense as a component of salaries and other personnel expense. For the six months ended June 30, 2015 and 2014, the Company recognized $193,000 and $157,000, respectively, in restricted stock unit compensation expense as a component of salaries and other personnel expense.

There were no restricted stock units granted in the second quarter of 2015.