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Stock Based Compensation
 12 Months Ended
Dec. 31, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock Based Compensation

Note 14 - Stock Based Compensation

 

Options to buy stock have been granted to key employees under an incentive stock option plan to provide them with additional equity interests in ChoiceOne. No compensation expense was recognized in 2014, 2013, and 2012 in connection with stock options during these years. The Amended and Restated Executive Stock Incentive Plan under which the stock options were granted expired in 2012. The Stock Incentive Plan of 2012 was approved by the Company’s shareholders at the Annual Meeting held on April 25, 2012. The new plan provides for the issuance of up to 100,000 shares of common stock. At December 31, 2014, there were 90,250 shares available for future grants.

 

A summary of the activity in the plan follows:

 

  2014  2013  2012
      Weighted     Weighted     Weighted
      average     average     average
      exercise     exercise     exercise
   Shares  price  Shares  price  Shares  price
                   
Options outstanding, beginning of year   38,625   $17.29    40,725   $16.99    46,656   $16.62 
Options granted   —    —    —    —    —    — 
Options exercised   14,550    18.87    2,100    13.70    2,625    13.70 
Options forfeited or expired   3,825    18.51    —    —    3,306    13.04 
Options outstanding, end of year   20,250   $16.65    38,625   $17.29    40,725   $16.99 
                               
Options exercisable at December 31   20,250   $16.65    38,625   $17.29    40,725   $16.99 

  

The excercise prices for options outstanding and exercisable at the end of 2014 ranged from $13.50 to $18.85 per share. The weighted average remaining contractual life of options outstanding and exercisable at the end of 2014 was approximately 2.22 years. All options exercisable as of December 31, 2014 had an exercise price lower than ChoiceOne’s closing stock price as of the end of 2014. Information pertaining to options outstanding at December 31, 2014 is as follows:

  

Exercise price of
stock options:		 
Number of
options
outstanding
at year-end		 

Number of

options
exercisable at
year-end

  Average
remaining
contractual
life (in years)
$13.50    7,000    7,000    3.23 
$17.95    8,000    8,000    2.05 
$18.85    5,250    5,250    1.05 

  

The fair value of each option award is estimated on the date of grant using a Black-Scholes option valuation model. ChoiceOne uses historical data to estimate the volatility of the market price of ChoiceOne stock and employee terminations within the valuation model. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. No options were granted in 2014, 2013, or 2012.

 

Effective July 1, 2013, ChoiceOne began granting restricted stock units to a select group of employees under the Stock Incentive Plan of 2012. All of the restricted stock units are initially unvested and vest in three annual installments on each of the next three anniversaries of the grant date. Certain additional vesting provisions apply. Each unit, once vested, is settled by delivery of one share of ChoiceOne common stock. ChoiceOne recognized compensation expense of $48,000 and $11,000 in 2014 and 2013, respectively, in connection with restricted stock units for current participants during these years. At December 31, 2014 there were 7,750 restricted stock units outstanding with an approximate stock value of $178,000. At December 31, 2013 there were 3,300 units outstanding with an approximate stock value of $62,000. Unrecognized compensation expense as of December 31, 2014 is approximately $128,000 and will be allocated $58,000 to 2015, $48,000 to 2016, and $22,000 to 2017.