14.) Equity Compensation:

During 2015, the Company, created the 2015 Omnibus Equity Plan and The Director Equity Plan.

The Omnibus Equity Plan permits the award of up to 340,000 shares to the Company’s employees to promote the long-term financial success of the Company, increasing shareholder value by providing employees the opportunity to acquire an ownership interest in the Company and enabling the Company and its related entities to attract and retain the services of those upon whom the successful conduct of business depends. In the first quarter of 2018 there were not any shares granted under the plan, however there were 12,976 restricted Board approved shares granted under the plan in March 2017. The Company is expensing the grant date fair value of all share-based compensation over the requisite vesting periods on a prorated straight-line basis. In the first three months of 2018 and 2017 compensation expense of $34,000 and $18,000, respectively, was recorded in the Consolidated Statements of Income. As of March 31, 2018, there was $218,000 of total unrecognized compensation expense related to the non-vested shares granted under the Plan. Shares awarded under this plan vest in equal thirds on the first three anniversaries of the award date if the employee remains employed with Cortland Bancorp. The remaining cost is expected to be recognized over a weighted average period of 18.9 months.

Granted shares are awarded upon meeting achievement of performance objectives derived from one or more of the performance criteria. The main metrics used for the periods presented were three-year earnings per share growth and three-year total shareholder return ranked versus a peer group.

The Director Equity Plan permits the award of up to 113,000 shares to nonemployee directors to promote the long-term financial success of the Company, increasing shareholder value by enabling the Company and its related entities to attract and retain the services of those directors upon whom the successful conduct of business depends. There were 1,656 Board approved shares granted under the plan in March 2017 with immediate vesting. In 2017, expense of $30,000 was recorded in the Consolidated Statements of Income, with none recorded as of March 31, 2018.

The following is the activity under the two plans during the three months ended March 31, 2018:

	Shares			Weighted Average Grant Date Fair Value
Nonvested at January 1, 2018		20,814		$	17.02
Granted		—			—
Vested		(4,081	)		18.25
Forfeited		—			—
Nonvested at March 31, 2018		16,733		$	16.72