Employee Benefit and Deferred Compensation Plans

(In Thousands, Except Share Data)

The Company sponsors a noncontributory defined benefit pension plan, under which participation and future benefit accruals ceased as of December 31, 1996. In connection with the acquisition of Heritage Financial Group, Inc. (“Heritage”) in July 2015, the Company assumed the noncontributory defined benefit pension plan maintained by HeritageBank of the South, Heritage's wholly-owned banking subsidiary (“HeritageBank”), under which accruals had ceased and the plan had been terminated by HeritageBank immediately prior to the acquisition date. Final distribution of all benefits under the plan was completed in August 2016.

The Company also provides retiree health benefits for certain employees who were employed by the Company and enrolled in the Company's health plan as of December 31, 2004. To receive benefits, an eligible employee must retire from service with the Company and its affiliates between age 55 and 65 and be credited with at least 15 years of service or with 70 points, determined as the sum of age and service at retirement. The Company periodically determines the portion of the premium to be paid by each eligible retiree and the portion to be paid by the Company. Coverage ceases when an employee attains age 65 and is eligible for Medicare. The Company also provides life insurance coverage for each retiree in the face amount of $5 until age 70. Retirees can purchase additional insurance or continue coverage beyond age 70 at their sole expense.

The plan expense for the legacy Renasant defined benefit pension plan (“Pension Benefits - Renasant”), the assumed HeritageBank defined pension plan (“Pension Benefits - HeritageBank”) and post-retirement health and life plans (“Other Benefits”) for the periods presented was as follows:



	Pension Benefits						Pension Benefits
	Renasant						HeritageBank					Other Benefits
	Three Months Ended						Three Months Ended					Three Months Ended
	September 30,						September 30,					September 30,
	2017			2016			2017		2016			2017		2016
Service cost	$	—		$	—		$	—	$	—		$	2	$	1
Interest cost	292			304			—		34			11		14
Expected return on plan assets	(485		)	(468		)	—		(23		)	—		—
Recognized actuarial loss	101			101			—		—			2		23
Settlement/curtailment/termination gains	—			—			—		(780		)	—		—
Net periodic benefit (return) cost	$	(92	)	$	(63	)	$	—	$	(769	)	$	15	$	38



	Pension Benefits						Pension Benefits
	Renasant						HeritageBank					Other Benefits
	Nine Months Ended						Nine Months Ended					Nine Months Ended
	September 30,						September 30,					September 30,
	2017			2016			2017		2016			2017		2016
Service cost	$	—		$	—		$	—	$	—		$	6	$	9
Interest cost	876			912			—		172			32		43
Expected return on plan assets	(1,456		)	(1,404		)	—		(113		)	—		—
Recognized actuarial loss	301			303			—		—			5		57
Settlement/curtailment/termination gains	—			—			—		(780		)	—		—
Net periodic benefit (return) cost	$	(279	)	$	(189	)	$	—	$	(721	)	$	43	$	109

In March 2011, the Company adopted a long-term equity incentive plan, which provides for the grant of stock options and the award of restricted stock. The plan replaced the long-term incentive plan adopted in 2001, which expired in October 2011. The Company issues shares of treasury stock to satisfy stock options exercised or restricted stock granted under the plan. Options granted under the plan allow participants to acquire shares of the Company's common stock at a fixed exercise price and expire ten years after the grant date. Options vest and become exercisable in installments over a three-year period measured from the grant date. Options that have not vested are forfeited and canceled upon the termination of a participant's employment. There were no stock options granted during the three or nine months ended September 30, 2017 or 2016.

The following table summarizes the changes in stock options as of and for the nine months ended September 30, 2017:



	Shares		Weighted Average Exercise Price
Options outstanding at beginning of period	185,625		$	15.97
Granted	—		—
Exercised	(93,625	)	16.22
Forfeited	—		—
Options outstanding at end of period	92,000		$	15.72

The Company awards performance-based restricted stock to executives and other officers and employees and time-based restricted stock to directors, executives and other officers and employees under the long-term equity incentive plan. The performance-based restricted stock vests upon completion of a specified performance cycle and the attainment of designated performance goals. Performance-based restricted stock is issued at the target level; the number of shares ultimately awarded is determined at the end of each performance cylce and may be increased or decreased depending on the Company falling short of, meeting or exceeding financial performance measures defined by the Board of Directors. Time-based restricted stock vests at the end of the service period defined in the respective grant. The fair value of each restricted stock award is the closing price of the Company's common stock on the day immediately preceding the award date. The following table summarizes the changes in restricted stock as of and for the nine months ended September 30, 2017:



	Performance-Based Restricted Stock		Weighted Average Grant-Date Fair Value		Time- Based Restricted Stock		Weighted Average Grant-Date Fair Value
Nonvested at beginning of period	—		$	—	117,345		$	31.76
Awarded	54,450		42.22		153,270		42.81
Vested	—		—		(43,305	)	32.36
Cancelled	(2,000	)	42.22		(5,460	)	37.74
Nonvested at end of period	52,450		$	42.22	221,850		$	39.13

During the nine months ended September 30, 2017, the Company reissued 99,318 shares from treasury in connection with the exercise of stock options and awards of restricted stock. The Company recorded total stock-based compensation expense of $1,359 and $848 for the three months ended September 30, 2017 and 2016, respectively, and $3,770 and $2,563 for the nine months ended September 30, 2017 and 2016, respectively.