Note 13. Stock-Based Compensation

On August 10, 2005, the shareholders of the Company approved the establishment of the Home Federal Bancorp, Inc. of Louisiana 2005 Recognition and Retention Plan and Trust Agreement (the 2005 Recognition Plan) as an incentive to retain personnel of experience and ability in key positions. As a result of the second step conversion, the 2005 Recognition Plan became a stock benefit plan of the Company, and the Mid-Tier Company's common stock was exchanged for stock of the Company. The aggregate number of shares of the Company's common stock subject to award under the 2005 Recognition Plan totaled 63,547 (as adjusted for the conversion described in Note 1). As shares were acquired for the 2005 Recognition Plan, the purchase price of these shares was recorded as a contra equity account. As the shares are distributed, the contra equity account is reduced. The 2005 Recognition Plan terminated on June 8, 2015 and the remaining 564 shares vested on August 19, 2015.

On December 23, 2011, the shareholders of the Company approved the establishment of the Home Federal Bancorp, Inc. of Louisiana 2011 Recognition and Retention Plan and Trust Agreement (the 2011 Recognition Plan, together with the 2005 Recognition Plan, the Recognition Plan) as an incentive to retain personnel of experience and ability in key positions. The aggregate number of shares of the Company's common stock available under the 2011 Recognition Plan totaled 77,808 shares, all of which were awarded as of June 30, 2015.

Recognition Plan shares are earned by recipients at a rate of 20% of the aggregate number of shares covered by the Recognition Plan award over five years. If the employment of an employee or service as a non-employee director is terminated prior to the fifth anniversary of the date of grant of Recognition Plan share award for any reason other than the recipient's death, disability, or following a change in control of the Company, the recipient shall forfeit the right to any shares subject to the awards that have not been earned.

The cost associated with the 2005 Recognition Plan is based on a share price of $10.93 (as adjusted), which represents the market price of the Company's stock on the date on which the 2005 Recognition Plan shares were granted. The cost associated with the 2011 Recognition Plan is based on share prices of $14.70 and $18.92 on January 31, 2012 and July 31, 2014, respectively, which represents the fair market price of the Company's stock on the dates on which the 2011 Recognition Plan shares were granted. The cost of the Recognition Plan is being recognized over the five year vesting period. Compensation expense pertaining to the Recognition Plan was $235,000 and $210,000, for the years ended June 30, 2015 and 2014, respectively.

A summary of the changes in restricted stock follows:

	Awarded Shares
	2015			2014

Balance - Beginning of Year		41,567			55,409
Granted		8,557			--
Forfeited		--			--
Earned and Issued		(13,842	)		(13,842	)

Balance - End of Year		36,282			41,567

On August 10, 2005, the shareholders of the Company approved the establishment of the Home Federal Bancorp, Inc. of Louisiana 2005 Stock Option Plan (the 2005 Option Plan) for the benefit of directors, officers, and other employees. The aggregate number of shares of common stock reserved for issuance under the Option Plan totaled 158,868 (as adjusted for the conversion described in Note 1). Both incentive stock options and non-qualified stock options may be granted under the plan. The 2005 Stock Option Plan terminated on June 8, 2015, however outstanding stock options will remain in effect for the remainder of their original ten year terms.

On December 23, 2011, the shareholders of the Company approved the establishment of the Home Federal Bancorp, Inc. of Louisiana 2011 Stock Option Plan (the 2011 Option Plan, together with the 2005 Option Plan, the Option Plan) for the benefit of directors, officers, and other employees. The aggregate number of shares of common stock reserved for issuance under the 2011 Option Plan totaled 194,522. Both incentive stock options and non-qualified stock options may be granted under the Option Plan.

On August 18, 2005, the Company granted 158,858 options (as adjusted for the conversion described in Note 1) to directors and employees. Under the Option Plan, the exercise price of each option cannot be less than the fair market value of the underlying common stock as of the date of the option grant, which was $10.82 (as adjusted), and the maximum term is ten years. As of August 18, 2015 all of the awards were either exercised or forfeited. On August 19, 2010 and July 31, 2014, the Company granted 21,616 options and 2,133 options, respectively, under the 2005 Option Plan that were previously forfeited (as adjusted for the conversion), at an exercise price of $10.93 and $18.92 per share, respectively. On January 31, 2012 and July 31, 2014, 165,344 options and 29,178 options, respectively, were granted to directors and employees at an exercise price of $14.70 and $18.92 per share, respectively, under the 2011 Option Plan. As of June 30, 2015 there were no stock options available for future grant under the 2005 Option Plan or the 2011 Option Plan.

Incentive stock options and non-qualified stock options granted under the Option Plan become vested and exercisable at a rate of 20% per year over five years, commencing one year from the date of the grant, with an additional 20% vesting on each successive anniversary of the date the option was granted. No vesting shall occur after an employee's employment or service as a director is terminated. In the event of death or disability of an employee or director or change in control of the Company, the unvested options shall become vested and exercisable.

On November 12, 2014, the shareholders of the Company approved the adoption of the Company's 2014 Stock Incentive Plan (the "Stock Incentive Plan") for the benefit of employees and non-employee directors as an incentive to contribute to the success of the Company and reward employees for outstanding performance and the attainment of targeted goals. There are undetermined amount of unawarded shares under the 2014 Stock Incentive Plan. The Stock Incentive Plan covers a total of 150,000 shares, of which no more than 37,500 shares, or 25% of the plan, may be share rewards. The balance of the plan is reserved for stock option awards which would total 112,500 stock options assuming all the share awards are issued. All incentive stock options granted under the Stock Incentive Plan are intended to comply with the requirements of Section 422 of the Internal Revenue Code. As of June 30, 2015, there were no share awards or stock options granted pursuant to the Stock Incentive Plan.

Following is a summary of the status of the Option Plan (as adjusted for the conversion) during the fiscal years ended June 30, 2015 and 2014:

						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
	Number of			Exercise		Contract		Intrinsic
	Shares			Price		Term		Value
Outstanding at June 30, 2014		198,480		$	13.99
Granted		31,311			18.92
Exercised		(21,330	)		10.99
Forfeited		--			--
Outstanding at June 30, 2015		208,461			15.03		6.81	$	1,078,470

Options Exercisable at June 30, 2015		106,689		$	14.26		6.35	$	634,083


Outstanding at June 30, 2013		237,077		$	13.64
Granted		--			--
Exercised		(34,707	)		11.02
Forfeited		(3,890	)		14.70
Outstanding at June 30, 2014		198,480			13.99		6.87	$	1,242,576

Options Exercisable at June 30, 2014		90,627		$	13.49		6.08	$	547,385

The fair value of each option granted is estimated on the grant date using the Black-Scholes model. The following assumptions were made in estimating fair value. The fair value has been adjusted for the exchange ratio as a result of the second-step conversion:

	2011 Option Plan
	July 31, 2014			January 31, 2012			2005 Option Plan
Dividend Yield		1.50	%		1.65	%		2.0	%
Expected Term	10 years			10 years			10 Years
Risk-Free Interest Rate		2.58	%		1.83	%		4.13	%
Expected Life	10 years			10 years			10 Years
Expected Volatility		9.56	%		29.74	%		8.59	%

A summary of the status of the Company's nonvested options as of June 30, 2015, and changes during the year ended June 30, 2015, is as follows:

				Weighted
				Average
	Number of			Exercise
	Shares			Price
Nonvested at June 30, 2014		107,853		$	13.49
Granted		31,311			18.92
Vested		(37,392	)		14.29
Forfeited		--			--
Nonvested at June 30, 2015		101,772		$	15.84

The Company recognizes compensation expense during the vesting period based on the fair value of the option on the date of the grant. At June 30, 2015 and 2014, compensation expense charged to operations was $178,000 and $162,000, respectively.