NOTE 11 – STOCK-BASED COMPENSATION

In November 2006, the Company adopted the United Community Bancorp 2006 Equity Incentive Plan (2006 Equity Incentive Plan) for the issuance of restricted stock, incentive stock options and non-statutory stock options to employees, officers and directors of the Company. The aggregate number of shares of common stock reserved and available for issuance pursuant to awards granted under the Equity Incentive Plan was 381,648, of which 272,606 were available to be issued in connection with the exercise of stock options and 109,042 were available to be issued as restricted stock. In December 2006, the Board of Directors of the Company authorized the funding of a trust that purchased 109,042 shares of the Company’s outstanding common stock to be used to fund restricted stock awards granted under the 2006 Equity Incentive Plan.

In February 2014, the Company adopted the United Community Bancorp 2014 Equity Incentive Plan (2014 Equity Incentive Plan) for the issuance of restricted stock, incentive stock options and non-statutory stock options to employees, officers and directors of the Company. The aggregate number of shares of common stock reserved and available for issuance pursuant to awards granted under the Equity Incentive Plan is 372,102, of which 275,099 are available to be issued in connection with the exercise of stock options and 97,003 are available to be issued in the form of restricted stock and performance shares. In 2014, the Board of Directors of the Company authorized the funding of a trust that purchased 97,003 shares of the Company’s outstanding common stock to be used to fund restricted stock awards granted under the 2014 Equity Incentive Plan.

In April 2014, the Company granted awards as follows:

	Number issued under the
	2006 Incentive		2014 Incentive		Total
Award Type	Stock Plan		Stock Plan		Awarded
Restricted share awards		13,310		65,260		78,570
Incentive stock options		36,802		128,258		165,060
Non-statutory stock options		-		57,771		57,771

		50,112		251,289		301,401

These awards vest at 20% annually from April 2015 through April 2019. As of June 30, 2015, 80% of all awards granted during the year ended June 30, 2015 remained outstanding and unvested. Total recognized compensation expense was $262,000 and $44,000 for the years ended June 30, 2015 and 2014, respectively. The unvested expense as of June 30, 2015 that will be recorded as expense in future periods is $1,003,000. The time over which this expense will be recorded will be recorded is 46 months. This expense has been calculated for stock options using the following assumptions: expected volatility of 14.22%, risk-free interest rate of 2.70%, expected term of ten years and expected dividend yield of 2.12%.

Of awards granted in December 2006, 126,523 incentive stock options and 101,101 non-statutory stock options are fully vested and remain outstanding as of June 30, 2015. There was no compensation expense recognized for the years ended June 30, 2015 and 2014, nor is there any remaining unvested expense as of June 30, 2015 that will be recorded as expense in future periods.

Information related to stock options for the years ended June 30, 2015 and 2014 is as follows:

					Weighted
			Weighted		Average
			Average		Remaining
			Exercise		Contractual
	Shares		Price		Term

Outstanding at June 30, 2013		227,626		17.54
Granted		222,831		11.33
Forfeited		—		—
Exercised		—		—
Outstanding at June 30, 2014		450,457		14.47
Granted		—		—
Forfeited		—		—
Exercised		—		—
Outstanding at June 30, 2015		450,457		14.47	5.1 years

Exercisable at June 30, 2015		272,192		16.52	2.7 years

Fair value of options			$	2.75

A summary of the status of unvested stock options for the years ended June 30, 2015 and 2014 is as follows:

			Weighted
			Average
			Grant Date
	Shares		Fair Value

Outstanding at June 30, 2013		—		—
Granted		222,831		1.88
Vested		—		—
Forfeited		—		—
Outstanding at June 30, 2014		222,831		1.88
Granted		—		—
Vested		(44,566)		1.88
Forfeited		—		—
Outstanding at June 30, 2015		178,265		1.88

Information related to restricted stock grants for the years ended June 30, 2015 and 2014 is as follows:

			Weighted
			Average
			Grant Date
	Shares		Fair Value

Outstanding at June 30, 2013		—		—
Granted		78,570		11.33
Vested		—		—
Forfeited		—		—
Outstanding at June 30, 2014		78,570		11.33
Granted		—		—
Vested		(15,714)		11.33
Forfeited		—		—
Outstanding at June 30, 2015		62,856		11.33