Share-Based Compensation

The Corporation adopted the 2012 Equity Incentive Plan (the “Plan”) during the quarter ended June 30, 2012. The Plan is administered by the Compensation Committee of the Board of Directors of the Corporation and provides for the grant of equity ownership opportunities through incentive stock options and nonqualified stock options (together, “Stock Options”), restricted stock, restricted stock units and dividend equivalent units, and any other type of award permitted by the Plan. As of December 31, 2015, 311,445 shares were available for future grants under the Plan. Shares covered by awards that expire, terminate or lapse will again be available for the grant of awards under the Plan. The Corporation may issue new shares and shares from treasury for shares delivered under the Plan.

Stock Options

The Corporation may grant Stock Options to senior executives and other employees under the Plan. Stock Options generally have an exercise price that is equal to the fair value of the common shares on the date the option is awarded. Stock Options granted under the Plan are subject to graded vesting, generally ranging from 4 years to 8 years, and have a contractual term of 10 years. For any new awards issued, compensation expense is recognized over the requisite service period for the entire award on a straight-line basis. No Stock Options were granted since the Corporation became a reporting company under the Securities Exchange Act of 1934 and no Stock Options have been modified, repurchased or canceled since such time. For that reason, no stock-based compensation related to Stock Options was recognized in the Consolidated Financial Statements for the years ended December 31, 2015, 2014 and 2013. As of December 31, 2015, all Stock Options granted and not previously forfeited had vested. The benefits of tax deductions as a result of disqualifying dispositions upon exercise of stock options are recognized as a financing cash flow activity.

The following table represents a summary of Stock Options activity for the periods indicated.



	For the Years Ended December 31,
	2015				2014				2013
	Options		Weighted average price		Options		Weighted average price		Options		Weighted average price
Outstanding at beginning of year	24,000		$	12.50	102,000		$	12.12	248,068		$	11.22
Granted	—		—		—		—		—		—
Exercised	(24,000	)	12.50		(78,000	)	12.00		(139,368	)	10.57
Expired	—		—		—		—		(6,700	)	11.00
Forfeited	—		—		—		—		—		—
Outstanding at end of year	—		—		24,000		12.50		102,000		12.12
Options exercisable at end of year	—		—		24,000		12.50		102,000		12.12

Restricted Stock

Under the Plan, the Corporation may grant restricted shares to plan participants, subject to forfeiture upon the occurrence of certain events until the dates specified in the participant’s award agreement. While the restricted shares are subject to forfeiture, the participant may exercise full voting rights and will receive all dividends and other distributions paid with respect to the restricted shares. The restricted shares granted under the Plan are subject to graded vesting. Compensation expense is recognized over the requisite service period of generally four years for the entire award on a straight-line basis. Upon vesting of restricted share awards, the benefit of tax deductions in excess of recognized compensation expense is recognized as a financing cash flow activity.

Restricted share activity for the years ended December 31, 2015, 2014 and 2013 was as follows:



	For the Year Ended December 31,
	2015				2014				2013
	Number of restricted shares		Weighted average grant-date fair value		Number of restricted shares		Weighted average grant-date fair value		Number of restricted shares		Weighted average grant-date fair value
Nonvested balance at beginning of year	154,998		$	16.97	169,418		$	11.55	189,012		$	9.10
Granted	53,790		22.52		64,522		22.49		50,060		16.50
Vested	(64,874	)	15.23		(78,942	)	9.86		(69,654	)	8.44
Forfeited	(8,443	)	15.03		—		—		—		—
Nonvested balance as of end of year	135,471		20.13		154,998		16.97		169,418		11.55

As of December 31, 2015, $2.3 million of deferred compensation expense was included in additional paid-in capital in the Consolidated Balance Sheets related to unvested restricted shares which the Corporation expects to recognize over approximately 2.8 years. As of December 31, 2015, all restricted shares that vested were delivered.

For the years ended December 31, 2015, 2014 and 2013, share-based compensation expense included in the Consolidated Statements of Income was as follows:



	For the Year Ended December 31,
	2015		2014		2013
	(In Thousands)
Share-based compensation expense	$	1,063	$	887	$	660