NOTE 14: Share-Based Plans

On April 16, 2013, the Corporation’s shareholders approved the C&F Financial Corporation 2013 Stock and Incentive Compensation Plan (the 2013 Plan) for the grant of equity awards to certain key employees of the Corporation, as well as non-employee directors (including non-employee regional or advisory directors). The 2013 Plan authorizes an aggregate of 500,000 shares of the Corporation's common stock to be issued as equity awards in the form of stock options, tandem stock appreciation rights, restricted stock, restricted stock units and/or other stock-based awards. Since the 2013 Plan’s approval, equity awards have only been issued in the form of restricted stock, which are accounted for using the fair market value of the Corporation’s common stock on the date the restricted shares are awarded.

Prior to the approval of the 2013 Plan, the Corporation granted equity awards under the Amended and Restated C&F Financial Corporation 2004 Incentive Stock Plan (the Amended 2004 Plan). The Amended 2004 Plan authorized an aggregate of 500,000 shares of Corporation common stock to be issued as equity awards in the form of stock options, stock appreciation rights, restricted stock and/or restricted stock units to key employees and non-employee directors. Since 2006, all equity awards that were issued under the Amended 2004 Plan were in the form of restricted stock, which were accounted for using the fair market value of the Corporation’s common stock on the date the restricted shares are awarded. Stock options issued under the Amended 2004 Plan prior to 2006 were issued to employees at a price equal to the fair market value of the Corporation’s common stock on the date granted. All options outstanding under the Amended 2004 Plan are exercisable as of December 31, 2016. All options expire ten years from the grant date.

Stock option transactions under the various plans for the periods indicated were as follows:


	2016					2015			2014
		Exercise		Intrinsic			Exercise			Exercise
(Dollars in thousands, except for per share amounts)	Shares	Price*		Value		Shares	Price*		Shares	Price*
Outstanding at beginning of year	24,000	$	38.39			100,762	$	37.75	164,150	$	38.21
Granted	—		—			—		—	—		—
Exercised	(9,750)		37.17			(34,000)		37.99	(271)		39.29
Cancelled	(12,000)		39.60			(42,762)		37.21	(63,117)		38.95
Outstanding and exercisable at end of year	2,250	$	37.17	$	29	24,000	$	38.39	100,762	$	37.75

*Weighted average

The total intrinsic value of in-the-money options exercised in 2016 was $77,000. Cash received from option exercises during 2016 was $362,0000, and a $2,000 tax expense was recognized in connection with nonqualified option exercises. The Corporation has a policy of issuing new shares to satisfy the exercise of stock options.

The following table summarizes information about stock options outstanding and exercisable at December 31, 2016:


	Options Outstanding and Exercisable
		Remaining
	Number Outstanding	Contractual Life
	at December 31, 2016	(Years)	Exercise Price
Exercise Price $37.17	2,250	0.3	$	37.17

As permitted under the 2013 Plan and Amended 2004 Plan, the Corporation awards shares of restricted stock to certain key employees and non-employee directors. Restricted shares awarded to employees generally vest on the fifth anniversary of the grant date and restricted shares awarded to non-employee directors generally vest on the third anniversary of the grant date. A summary of the activity for restricted stock awards for the periods indicated is presented below:


	2016			2015			2014
		Weighted-			Weighted-			Weighted-
		Average			Average			Average
		Grant Date			Grant Date			Grant Date
	Shares	Fair Value		Shares	Fair Value		Shares	Fair Value
Nonvested at beginning of year	137,200	$	36.50	135,600	$	34.34	120,183	$	31.18
Granted	32,630		43.48	33,925		38.33	32,625		39.84
Vested	(26,000)		27.30	(27,250)		26.57	(15,208)		20.13
Cancelled	(2,075)		38.59	(5,075)		44.44	(2,000)		42.14
Nonvested at end of year	141,755	$	39.77	137,200	$	36.50	135,600	$	34.34

Compensation is accounted for using the fair value of the Corporation’s common stock on the date the restricted shares are awarded. The weighted-average grant date fair value per share of restricted stock granted for the years 2016, 2015 and 2014 was $43.48, $38.33 and $39.84, respectively. Compensation expense is charged to income ratably over the vesting periods, and was $1.22 million in 2016, $1.06 million in 2015 and $967,000 in 2014. As of December 31, 2016, there was $2.94 million of total unrecognized compensation cost related to restricted stock granted under the 2013 Plan and the Amended 2004 Plan. This amount is expected to be recognized through 2021.