INCENTIVE AND RESTRICTED STOCK PLAN AND DIVIDEND REINVESTMENT PLAN

We adopted an Incentive Stock Plan in 1992 that provided for granting incentive stock options, nonstatutory stock options, restricted stock and appreciation rights. On October 17, 1994, the 1992 Stock Plan was amended to include outside directors. The 1992 Stock Plan had a maximum of 3,200,000 shares of our common stock and expired ten years from the date of board approval. At December 31, 2002, 3,180,822 nonstatutory stock options and restricted stock had been granted under the 1992 Stock Plan. No further awards will be made under the 1992 Stock Plan. All grants under the 1992 Stock Plan have expired at December 31, 2012.

We adopted an Incentive Stock Plan in 2003 that provides for granting incentive stock options, nonstatutory stock options, restricted stock and appreciation rights. The 2003 Stock Plan has a maximum of 1,500,000 shares of our common stock and expires ten years from the date of board approval. The 2003 Stock Plan is similar to the 1992 Stock Plan, which the 2003 Stock Plan replaced. No further awards will be granted under the 2003 Stock Plan.

We adopted an Incentive Stock Plan in 2014 that provides for cash performance awards and for granting incentive stock options, nonstatutory stock options, restricted stock, restricted stock units and appreciation rights. The 2014 Incentive Plan has a maximum of 750,000 shares of our common stock and expires ten years from the date of board approval. With respect to stock compensation provisions, the 2014 Incentive Plan is similar to the 2003 Stock Plan, which the 2014 Stock Plan replaced.

Stock Options

As of December 31, 2014, 155,500 nonstatutory stock options are outstanding under the 2003 Stock Plan. Nonstatutory stock options granted in 2006 and 2005 are fully vested and have a ten year life. These stock options were fully expensed in 2010.

The fair value of nonstatutory stock option awards under the 2003 Stock Plan were estimated on the date of grant using the Black-Scholes valuation model, which is dependent upon certain assumptions. We use the simplified method in developing the estimated life of the option, whereby the expected life is presumed to be the midpoint between the vesting date and the end of the contractual term. There have been no nonstatutory stock options granted since 2006.

The following table summarizes activity for nonstatutory stock options for the years ended December 31:



	2014					2013					2012
	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term
Outstanding at beginning of year	428,900		$	37.36		675,500		$	35.18		757,050		$	34.33
Granted	—		—			—		—			—		—
Exercised	—		—			—		—			—		—
Forfeited	(273,400	)	37.08			(246,600	)	31.39			(81,550	)	27.29
Outstanding at End of Year	155,500		$	37.86	1.0 year	428,900		$	37.36	1.4 years	675,500		$	35.18	2.0 years
Exercisable at End of Year	155,500		$	37.86	1.0 year	428,900		$	37.36	1.4 years	675,500		$	35.18	2.0 years

The aggregate intrinsic value of options outstanding and exercisable was zero as of December 31, 2014, 2013 and 2012. The aggregate intrinsic value represents the total pretax intrinsic value (the difference between our closing stock price on the last trading day of the fourth quarter and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on December 31, 2014.

As of December 31, 2014, 2013 and 2012 all outstanding stock options have vested. During the years ended December 31, 2014, 2013 and 2012 no stock options were exercised.

Restricted Stock

We periodically issue restricted stock to employees and directors, pursuant to our Stock Plans. As of December 31, 2014, 259,673 restricted shares have been granted under the 2003 Stock Plan and 80,455 restricted shares have been granted under the 2014 Stock Plan.

During 2014, 2013 and 2012, we granted 13,824, 18,942 and 19,362 restricted shares of common stock, to outside directors. The 2014 grants were issued under the 2014 Stock Plan and the 2013 and 2012 grants were issued under the 2003 Stock Plan. The grants are part of the compensation arrangement approved by the Compensation and Benefits Committee whereby the directors receive compensation in both the form of cash and restricted shares of common stock. These shares fully vest one year after the date of grant.

Also during 2014, 2013 and 2012, we granted 66,631, 3,247 and 48,008 restricted shares of common stock to senior management. The 2014 grants were issued under the 2014 Stock Plan and the 2013 and 2012 grants were issued under the 2003 Stock Plan. The awards to senior management were granted in accordance with performance levels set by the Compensation and Benefits Committee. During 2013 and 2012 restricted shares were granted on two occasions and have different vesting periods. The restricted stock grants for 2013 of 3,247 shares and for 2012 of 9,897 shares vest fully on the second anniversary of the grant dates. The restricted shares granted under our Long Term Incentive Plan, or LTIP, for 2014 and 2012 of 66,631 and 38,111 shares, respectively consisted of both time and performance-based awards. The 2014 grants were issued under the 2014 Stock Plan and there were no shares granted under the 2003 Stock Plan in 2013. Vesting for the time-based awards is 50 percent after two years and the remaining 50 percent at the end of the third year. The performance-based awards vest at the end of the three year period. During the vesting period, the recipient receives dividends and has the right to vote the unvested shares granted, except for the 2014 LTIP performance-based award. If the recipient leaves S&T before the end of the vesting period, shares will be forfeited except in the case of retirement, disability or death where accelerated vesting provisions are defined within the awards agreement.

Compensation expense for time-based restricted stock is recognized ratably over the period of service, generally the entire vesting period, based on fair value on the date of grant. For grants made to directors, the fair value is determined by the closing price of the stock on the date of grant. The average of the high and low prices of the stock on the grant date is used for senior management. Compensation expense for performance-based restricted stock is recognized ratably over the remaining vesting period once the likelihood of meeting the performance measure is probable. During 2014, 2013 and 2012, we recognized compensation expense of $0.9 million, $0.6 million and $0.9 million and realized a tax benefit of $0.3 million, $0.2 million and $0.3 million related to restricted stock grants.

The following table provides information about restricted stock granted under the 2003 Stock Plan for the years ended December 31:



	Restricted Stock	Weighted Average Grant Date Fair Value
Non-vested at December 31, 2012	115,019	$	22.39
Granted	22,189	19.18
Vested	45,864	19.68
Forfeited	11,929	21.30
Non-vested at December 31, 2013	79,415	$	21.50
Granted	—	—
Vested	41,740	20.70
Forfeited	14,530	20.97
Non-vested at December 31, 2014	23,145	$	23.28

The following table provides information about restricted stock granted under the 2014 Stock Plan for the years ended December 31:



	Restricted Stock	Weighted Average Grant Date Fair Value
Non-vested at December 31, 2013	—	$	—
Granted	80,455	23.24
Vested	158	23.19
Forfeited	473	23.19
Non-vested at December 31, 2014	79,824	$	23.24

As of December 31, 2014, there was $1.5 million of total unrecognized compensation cost related to restricted stock that will be recognized as compensation expense over a weighted average period of 1.97 years.

Dividend Reinvestment Plan

We also sponsor a Dividend Reinvestment and Stock Purchase Plan, or Dividend Plan, where shareholders may purchase shares of S&T common stock at the average fair value with reinvested dividends and voluntary cash contributions. The plan administrator and transfer agent may purchase shares directly from us from shares held in treasury or purchase shares in the open market to fulfill the Dividend Plan’s needs.