Note 5 — Stock Options

On April 5, 2012, the Board of Directors adopted the 2012 International Bancshares Corporation Stock Option Plan (the “2012 Plan”). There are 800,000 shares available for stock option grants under the 2012 Plan. Under the 2012 Plan, both qualified incentive stock options (“ISOs”) and non-qualified stock options (“NQSOs”) may be granted. Options granted may be exercisable for a period of up to 10 years from the date of grant, excluding ISOs granted to 10% shareholders, which may be exercisable for a period of up to only five years. As of March 31, 2017, 206,100 shares were available for future grants under the 2012 Plan.

A summary of option activity under the stock option plan for the three months ended March 31, 2017 is as follows:


				Weighted
		Weighted		average
		average		remaining	Aggregate
	Number of	exercise		contractual	intrinsic
	options	price		term (years)	value ($)
					(in Thousands)
Options outstanding at December 31, 2016	800,502	$	19.43
Plus: Options granted	—		—
Less:
Options exercised	59,751		12.40
Options expired	—		—
Options forfeited	9,213		19.28
Options outstanding at March 31, 2017	731,538		20.00	6.03	$	11,263

Options fully vested and exercisable at March 31, 2017	261,936	$	18.73	5.24	$	4,367

Stock-based compensation expense included in the consolidated statements of income for the three months ended March 31, 2017 and March 31, 2016 was approximately $268,000 and $285,000, respectively. As of March 31, 2017, there was approximately $2,054,000 of total unrecognized stock-based compensation cost related to non-vested options granted under the Company plans that will be recognized over a weighted average period of 1.6 years.