During 2017, the Company, with the approval of shareholders, created the 2017 Equity Incentive Plan (the “2017 Plan”). The 2017 Plan permits the award of up to 800 thousand shares to the Company’s directors and employees to attract and retain exceptional personnel, motivate performance and most importantly to help align the interests of Farmers’ executives with those of the Company’s shareholders. There were 25,729 service time based shares and 62,919 performance based shares granted under the 2017 Plan during the year ended December 31, 2018, as shown in the table below. The actual number of performance based stock awards issued will depend on certain performance conditions which are mainly average return on equity compared to a group of peer companies over a three year vesting period.

During 2012, the Company, with the approval of shareholders, created the 2012 Equity Incentive Plan (the “2012 Plan”). The 2012 Plan permitted the award of up to 500 thousand shares to the Company’s directors and employees to promote the Company’s long-term financial success by motivating performance through long-term incentive compensation and to better align the interests of its employees with those of its shareholders. There were no additional shares granted under the Plan during 2018. Any new restricted stock awards will be issued under the 2017 Plan described above.

The restricted stock awards were granted with a fair value price equal to the market price of the Company’s common stock at the date of grant. Expense recognized was $1.7 million for 2018, $2.4 million for 2017 and $892 thousand for 2016. As of December 31, 2018, there was $1.5 million of total unrecognized compensation expense related to the non-vested shares granted under the Plan. The remaining cost is expected to be recognized over 2.20 years.

	Maximum Awarded Service Units			Weighted Average Grant Date Fair Value		Maximum Awarded Performance Units			Weighted Average Grant Date Fair Value
Beginning balance - non-vested shares		323,331		$	9.20		266,515		$	9.43
Granted		25,729			14.83		62,919			14.31
Vested		(261,105	)		8.46		(63,873	)		7.76
Forfeited		0			0		(61,733	)		7.76
Ending balance - non-vested shares		87,955		$	13.04		203,828		$	11.96

The 324,978 shares that vested in 2018 had a weighted average fair value of $15.21 per share.