NOTE 10, Share-Based Compensation

The Company has adopted an employee stock purchase plan and offers share-based compensation through its equity compensation plan. Share-based compensation arrangements may include stock options, restricted and unrestricted stock awards, restricted stock units, performance units and stock appreciation rights. Accounting standards require all share-based payments to employees to be valued using a fair value method on the date of grant and to be expensed based on that fair value over the applicable vesting period. The Company accounts for forfeitures during the vesting period as they occur.

The Company's 1998 Stock Option Plan, pursuant to which stock options could be granted to key employees and non-employee directors, expired on March 9, 2008. Stock options that were outstanding on March 9, 2008 remained outstanding in accordance with their terms, but no new awards could be granted under the plan after March 9, 2008. At December 31, 2017, no options to purchase shares of common stock granted under the stock option plan remain outstanding.

Stock option activity for the year ended December 31, 2017 is summarized below:

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)		Aggregate Intrinsic Value (in thousands)
Options outstanding, January 1, 2017		60,605		$	20.05
Granted		-			-
Exercised		(58,105	)		20.05
Canceled or expired		(2,500	)		20.05
Options outstanding, December 31, 2017		-		$	-		-	$	-
Options exercisable, December 31, 2017		-		$	-		-	$	-

During 2017 and 2016, the Company received $1.3 million and $25 thousand, respectively, from the exercise of stock options.

No options were granted during the years ended December 31, 2017 or December 31, 2016. As of December 31, 2017 and December 31, 2016, all outstanding stock options were fully vested and there was no unrecognized stock-based compensation expense.

The 2016 Incentive Stock Plan (the Incentive Stock Plan) permits the issuance of up to 300,000 shares of common stock for awards to key employees and non-employee directors of the Company and its subsidiaries in the form of stock options, restricted stock, restricted stock units, stock appreciation rights, stock awards and performance units. The Company did not award any equity compensation under the Incentive Stock Plan during 2016.

Restricted stock activity for the year ended December 31, 2017 is summarized below.

	Shares		Weighted Average Grant Date Fair Value
Nonvested, January 1, 2017		-	$	-
Issued		2,245		33.60
Vested		-		-
Forfeited		-		-
Nonvested, December 31, 2017		2,245	$	33.60

The weighted average period over which nonvested awards are expected to be recognized in compensation expense is two years.

The fair value of restricted stock granted during the year ended December 31, 2017 was $75 thousand.

The remaining unrecognized compensation expense for the shares granted during the year ended December 31, 2017 totaled $58 thousand as of December 31, 2017.

Stock-based compensation expense was $17 thousand for the year ended December 31, 2017. There was no stock compensation expense in 2016.

Under the Company's Employee Stock Purchase Plan (ESPP), substantially all employees of the Company and its subsidiaries can authorize a specific payroll deduction from their base compensation for the periodic purchase of the Company's common stock. Shares of stock are issued quarterly at a discount to the market price of the Company's stock on the day of purchase, which can range from 0-15% and for 2017 and 2016 was set at 5%.

Total stock purchases under the ESPP amounted to 3,548 shares during 2017 and 999 shares during 2016. At December 31, 2017, the Company had 245,453 remaining shares reserved for issuance under this plan.