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 June 30, 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 six months ended June 30, 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	87,322		12.48
Options expired	2,188		10.40
Options forfeited	10,963		19.62
Options outstanding at June 30, 2017	700,029		20.32	5.98	$	10,311

Options fully vested and exercisable at June 30, 2017	255,860	$	18.78	5.03	$	4,162

Stock-based compensation expense included in the consolidated statements of income for the three and six months ended June 30, 2017 was approximately $216,000 and $484,000, respectively. Stock-based compensation expense included in the consolidated statements of income for the three and six months ended June 30, 2016 was approximately $269,000 and $554,000, respectively. As of June 30, 2017, there was approximately $1,838,000 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.