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Equity Compensation Plan Information
6 Months Ended
Jun. 30, 2015
Equity Compensation Plan Information [Abstract]  
Equity Compensation Plan Information

Note 14 - Equity Compensation Plan Information

At the 2007 Annual Meeting of Shareholders, First United Corporation’s shareholders approved the First United Corporation Omnibus Equity Compensation Plan (the “Omnibus Plan”), which authorizes the issuance of up to 185,000 shares of common stock pursuant to the grant of stock options, stock appreciation rights, stock awards, stock units, performance units, dividend equivalents, and other stock-based awards to employees or directors. 

On June 18, 2008, the Board of Directors of First United Corporation adopted a Long-Term Incentive Program (the “LTIP”).  This program was adopted as a sub-plan of the Omnibus Plan to reward participants for increasing shareholder value, align executive interests with those of shareholders, and serve as a retention tool for key executives.  Under the LTIP, participants are granted shares of restricted common stock of First United Corporation.  The amount of an award is based on a specified percentage of the participant’s salary as of the date of grant.  These shares will vest if the Corporation meets or exceeds certain performance thresholds. 

 

The Corporation complies with the provisions of ASC Topic 718, Compensation-Stock Compensation, in measuring and disclosing stock compensation cost.   The measurement objective in ASC Paragraph 718-10-30-6 requires public companies to measure the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of the award.  The cost is recognized in expense over the period in which an employee is required to provide service in exchange for the award (the vesting period).

 

Stock-based awards were made to non-employee directors in May 2015 pursuant to First United Corporation’s director compensation policy.  Beginning May 2014, each director’s annual retainer is paid in 1,000 shares of common stock, with the remainder of $10,000 paid in cash or any portion thereof, in shares of stock.  Prior to May 2014, the retainer of the 1,000 shares of stock was paid in shares of stock in the amount of $5,000.   A total of 16,022 fully-vested shares of common stock were issued to directors in 2015, which had a fair market value of $8.96 per share.  Director stock compensation expense was $75,959 for the six months ended June 30, 2015 and $56,010 for the six months ended June 30, 2014.  Stock compensation expense was $36,934 and $33,515 for the three months ended June 30, 2015 and 2014, respectively. 

 

In the first quarter of 2015, a one-time stock grant was awarded to two executive officers in the amount of 10,232 shares.  These shares do not have any performance restrictions; however, they have a two-year vesting period.    Executive stock compensation expense was $20,712 for the six months ended June 30, 2015 and $11,382 for the three months ended June 30, 2015.