Stock Option Plan

6 Months Ended

Jun. 30, 2016

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

Stock Option Plan

Note 6 - Stock Option Plan

In January 2009, Riverview implemented a nonqualified stock option plan. The purpose of the 2009 Stock Option Plan was to advance the development, growth and financial condition of Riverview by providing incentives through participation in the appreciation of the common stock of Riverview to secure, retain and motivate its directors, officers and key employees and to align such person’s interests with those of Riverview’s shareholders. Originally, the 2009 Stock Option Plan authorized the issuance of 170,000 shares of Riverview common stock. On January 4, 2012, the 2009 Stock Option Plan was amended and restated to increase the total number of shares of common stock that may be issued under the Plan to 220,000 shares in the aggregate. On April 16, 2014, the 2009 Plan was again amended and restated to increase the total number of shares of common stock that may be issued under the Plan to 350,000 shares in the aggregate.

The vesting schedule for all option grants is a seven year cliff, which means that the options are 100% vested in the seventh year following the grant date and the expiration date of all options is ten years following the grant date. The Plan states that, upon the date of death of a participant, all awards granted pursuant to the agreement for that participant shall become fully vested and remain exercisable for the option grant’s remaining term. As of June 30, 2016, there were 171,000 option grants fully vested and exercisable. This vesting status was the result of the Board of Director’s approval as of December 31, 2013 to accelerate the vesting period for these options. There was no acceleration of vesting during 2016 or 2015.

Information pertaining to options outstanding at June 30, 2016 is as follows:

	Options Outstanding			Options Exercisable
Range of exercise price	Number Outstanding	Weighted Average Remaining Contractual Life	Weighted Average Exercise Price	Number Exercisable	Weighted Average Exercise Price	Weighted Average Remaining Contractual Life
$9.75 - $13.05	344,250	5.1 years	$10.48	171,000	$9.83	1.7 years

There was intrinsic value associated with 318,950 stock options out of 344,250 outstanding stock options at June 30, 2016 considering that the market value of the stock as of the close of business at quarter end was $12.10 per share as compared with the option exercise price of $10.00 for 107,200 options, $9.75 for 40,750 options, $10.35 for 9,250 options, and $10.60 for 161,750 options.

The Company accounts for these options in accordance with generally accepted accounting principles related to Share Based Payments, which requires that the fair value of the equity awards be recognized as compensation expense over the period during which the employee is required to provide service in exchange for such an award. Riverview amortizes compensation expense over the vesting period (seven years). Total compensation expense relating to the options that have been recognized is $349,000, of which $21,000 was recorded for the six months ended June 30, 2016. The remaining unrecognized compensation expense as of June 30, 2016 was $212,000. In comparison with 2015, $16,000 in option compensation expense was recorded for the six months ended June 30, 2015. The increase in option compensation expense in 2016 was due to the granting of 25,300 options during the fourth quarter of 2015.

During the six months ended June 30, 2016 and 2015, no options were granted or exercised.