XML 28 R13.htm IDEA: XBRL DOCUMENT
v3.8.0.1

Employee Benefit Plans | 9 Months Ended
--- | ---
Sep. 30, 2017
Defined Benefit Plan [Abstract] |
Employee Benefit Plans | Employee Benefit Plans 401(k) Plan: The Company provides a deferred salary reduction plan (“Plan”) under Section 401(k) of the Internal Revenue Code covering substantially all employees. After one year of service the Company matches 100 percent of employee contributions up to 3 percent of compensation and 50 percent of employee contributions on the next 2 percent of compensation. The Company's contribution to the Plan for the three month period ending September 30, 2017 and 2016 respectively was $89,463 and $110,107 and for the nine month period ending September30, 2017 and 2016 respectively was $298,309 and $300,530 Stock Option Plans: As of September 30, 2017, the Company had one currently active equity incentive plan administered by the Board of Directors, and three plans or programs, pursuant to which the Company has outstanding prior grants. These plans are described below: Legacy Cornerstone Bancshares, Inc. 2002 Long Term Incentive Plan – The plan provided Cornerstone Bancshares, Inc. officers and employees incentive stock options or non-qualified stock options to purchase shares of common stock. The exercise price for incentive stock options was not less than 100 percent of the fair market value of the common stock on the date of the grant. The exercise price of the non-qualified stock options was equal to or more or less than the fair market value of the common stock on the date of the grant. This plan expired in 2012. Legacy Cornerstone Non-Qualified Plan Options — During 2013 and 2014, Cornerstone issued non-qualified options to employees and directors. The options were originally documented in 2013 as being issued out of the Cornerstone Bancshares, Inc. 2002 Long Term Incentive Plan but that plan expired in 2012. The non-qualified options are governed by the grant document issued to the holders which incorporate the terms of the plan by reference. Legacy SmartFinancial, Inc. 2010 Incentive Plan - This plan was assumed by the Company on August 31, 2015. This plan provides for incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, performance awards, dividend equivalents and stock or other stock-based awards. The maximum number of common shares that could be sold or optioned under the plan is 525,000 shares. Under the plan, the exercise price of each option could not be less than 100 percent of the fair market value of the common stock on the date of grant. Note 5. Employee Benefit Plans, Continued Stock Option Plans (Continued): 2015 Stock Incentive Plan – This plan provides for incentive stock options, nonqualified stock options, and restricted stock. The maximum number of shares of common stock that can be sold or optioned under the plan is 2,000,000 shares. The term of each option shall be no more than ten years from the date of grant. In the case of an incentive stock option granted to a participant who, at the time the option is granted, owns stock representing more than ten percent of the voting power of all classes of stock of the Company or any parent or subsidiary thereof, the term of the option shall be five years from the date of grant or such shorter term as may be provided in the award agreement. The per share exercise price for the shares to be issued upon exercise of an option shall be such price as is determined by the plan administrator, subject to the following: In the case of an incentive stock option: (1) granted to an employee who, at the time of grant of such option, owns stock representing more than ten percent of the voting power of all classes of stock of the company or any parent or subsidiary thereof, the exercise price shall be no less than one hundred and ten percent of the fair market value per share on the date of grant; or (2) granted to any other employee, the per share exercise price shall be no less than one hundred percent of the fair market value per share on the date of grant. In the case of a nonstatutory stock option, the per share exercise price shall be no less than one hundred percent of the fair market value per share on the date of grant, unless otherwise determined by the Administrator. The incentive stock options vest 30% on the second anniversary of the grant date, 30% on the third anniversary of the grant date and 40% on the fourth anniversary of the grant date. Director non-qualified stock options vest 50% on the first anniversary of the grant date and 50% on the second anniversary of the grant date. A summary of the status of these stock option plans is presented in the following table:
|  | Number |  | Weighted Average Exercisable Price
Outstanding at December 31, 2016 |  | 717,524 |  |  | $ | 10.57 |
Exercised |  | (505,712 | ) |  | 9.64 |
Forfeited |  | (24,496 | ) |  | 19.90 |
Outstanding at September 30, 2017 |  | 187,316 |  |  | $ | 11.85 |
|  | Number |  | Weighted Average Exercisable Price
Outstanding at December 31, 2015 |  | 817,414 |  |  | $ | 10.62 |
Exercised |  | (89,556 | ) |  | 8.98 |
Forfeited |  | (10,334 | ) |  | 28.49 |
Outstanding at December 31, 2016 |  | 717,524 |  |  | $ | 10.57 |
Note 5. Employee Benefit Plans, Continued Stock Option Plans (continued): Information pertaining to options outstanding at September 30, 2017, is as follows:
|  | Options Outstanding |  | Options Exercisable
|  |  |  | Weighted- Average Remaining |  | Weighted- Average |  |  |  | Weighted- Average
Exercise |  | Number |  | Contractual |  | Exercise |  | Number |  | Exercise
Prices |  | Outstanding |  | Life |  | Price |  | Exercisable |  | Price
6.60 |  |  | 38,250 |  |  | 4.4 years |  | 6.60 |  |  | 38,250 |  |  | 6.60 |
6.80 |  |  | 16,875 |  |  | 3.4 years |  | 6.80 |  |  | 16,875 |  |  | 6.80 |
9.48 |  |  | 26,875 |  |  | 5.4 years |  | 9.48 |  |  | 26,875 |  |  | 9.48 |
9.60 |  |  | 35,625 |  |  | 6.4 years |  | 9.60 |  |  | 35,625 |  |  | 9.60 |
11.67 |  |  | 2,000 |  |  | 3.3 years |  | 11.67 |  |  | 2,000 |  |  | 11.67 |
14.40 |  |  | 12,805 |  |  | 1.4 years |  | 14.40 |  |  | 12,805 |  |  | 14.40 |
15.05 |  |  | 41,720 |  |  | 8.0 years |  | 15.05 |  |  | 18,265 |  |  | 15.05 |
31.96 |  |  | 13,166 |  |  | 0.4 years |  | 31.96 |  |  | 13,166 |  |  | 31.96 |
Outstanding, end of period |  | 187,316 |  |  | 5.1 years |  | 11.85 |  |  | 163,861 |  |  | 11.40 |
The Company recognized stock option-based compensation expense of $23,718 and $33,000 for the three months ended September 30, 2017 and September 30, 2016, respectively and $74,248 and $99,635 for the nine months ended September 30, 2017 and September 30, 2016, respecitvely. For the nine months period ended September 30, 2017, direct stock grant expense issued to local advisory board members of $31,791 was included in salary and employee benefits expense. There was no direct grant stock grant expense for the nine months period ended September 30, 2016. The total fair value of shares underlying the options which vested during the nine months period ended September 30, 2017 and September 30, 2016 was $348,124 and $84,010 , respectively. There were no income tax benefits recognized for the exercise of options for the periods ended September 30, 2017 and September 30, 2016, respectively. The intrinsic value of options exercised during the period ended September 30, 2017 was $5,451,319. The aggregate intrinsic value of total options outstanding and exercisable options at September 30, 2017 was $2,390,463 and $2,179,133, respectively. Cash received from options exercised under all share-based payment arrangements for the period ended September 30, 2017 was $4,873,757. Information related to non-vested options for the period ended September 30, 2017, is as follows:
|  | Number |  | Weighted Average Grant-Date Fair Value
Nonvested at December 31, 2016 |  | 47,970 |  |  | $ | 12.31 |
Granted |  | — |  |  | — |
Vested |  | (14,469 | ) |  | 12.31 |
Forfeited/expired |  | (10,046 | ) |  | 12.31 |
Nonvested at September 30, 2017 |  | 23,455 |  |  | $ | 12.31 |
As of September 30, 2017 , there was approximately $282,000 of total unrecognized compensation cost related to nonvested stock-based compensation arrangements granted under the Plans. The cost is expected to be recognized over a weighted-average period of 1.0 year. There were no stock options granted during the nine month period ended September 30, 2017. Note 5. Employee Benefit Plans, Continued Restricted Stock Awards: On August 4, 2017, the the Board of Directors of the Company made grants of 27,500 shares of restricted stock under the Company’s 2015 Stock Incentive Plan to certain executives of the Company. The restricted shares of stock, which are subject to the terms of a Restricted Stock Grant Agreement between the Company and each recipient, will fully vest on the fifth anniversary of the grant date. Prior to vesting, the recipient will be entitled to vote the shares and receive dividends, if any, declared by the Company with respect to its common stock. Compensation expense for restricted stock is based on the fair value of the restricted stock awards at the time of the grant, which is equal to the market value of the Company’s common stock on the date of grant. The value of the restricted stock grants that are expected to vest is amortized monthly into compensation expense over the five year vesting period. The restricted shares had a fair value of $24.58 per share on the date of issuance. For the three and nine months ended September 30, 2017, compensation expense of $22,532 was recognized related to non-vested restricted stock awards. There was no compensation expense related to these awards in 2016. As of September 30, 2017, there was $653,418 of unrecognized compensation cost related to non-vested restricted stock awards granted under the plan. The following table summarizes activity relating to non-vested restricted stock awards:
|  | Number
Balance at December 31, 2016 |  | — |
Granted |  | 27,500 |
Forfeited |  | — |
Vested |  | — |
Balance at September 30, 2017 |  | 27,500 |

X
- Definition The entire disclosure for an entity's employee compensation and benefit plans, including, but not limited to, postemployment and postretirement benefit plans, defined benefit pension plans, defined contribution plans, non-qualified and supplemental benefit plans, deferred compensation, share-based compensation, life insurance, severance, health care, unemployment and other benefit plans. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -URI http://asc.fasb.org/topic&trid=2235017 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 712 -URI http://asc.fasb.org/topic&trid=2197446 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 710 -URI http://asc.fasb.org/topic&trid=2127225 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 + Details
Name: | us-gaap_CompensationAndEmployeeBenefitPlansTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_DefinedBenefitPensionPlansAndDefinedBenefitPostretirementPlansDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration