COMPENSATION PLANS

The Company has adopted share-based compensation plans to reward and provide long-term incentive for directors and key employees of the Company. These plans provide for the granting of stock, stock options, stock-settled stock appreciation rights ("SSARs"), and restricted stock units (“RSUs”), as designated by the Company's Board of Directors upon the recommendation of the Compensation Committee of the Board. The Company uses authorized and unissued shares to satisfy share award exercises. At December 31, 2016, there were 218,173 shares available for grant under the various share-based compensation plans.

Total share-based compensation expense that was charged against income was $3.4 million, $3.6 million, and $2.9 million for the years ended December 31, 2016, 2015, and 2014 respectively. The total income tax benefit recognized in additional paid in capital for share-based compensation arrangements was $1.3 million, $0.4 million, and $0.2 million for the years ended December 31, 2016, 2015, and 2014, respectively.

Employee Stock Options and Stock-settled Stock Appreciation Rights

In determining compensation cost for stock options and SSARs, the Black-Scholes option-pricing model is used to estimate the fair value on date of grant. There were no grants of employee stock options or SSARs during the years ended December 31, 2016, 2015, or 2014.

Stock options have been granted to key employees with exercise prices equal to the market price of the Company's common stock at the date of grant and 10-year contractual terms. Stock options have a vesting schedule of three to five years. The SSARs are subject to continued employment, have a 10-year contractual term and vest ratably over five years. Neither stock options nor SSARs carry voting or dividend rights until exercised. At December 31, 2016, there was no remaining unrecognized compensation expense related to stock options and SSARs and all outstanding awards are vested. Various information related to the stock options and SSARs is shown below.



(in thousands)	2016		2015		2014
Compensation expense	$	—	$	50	$	103
Intrinsic value of option exercises on date of exercise	1,156		74		226
Cash received from the exercise of stock options	87		126		149

Following is a summary of the employee stock option and SSAR activity for 2016.



(in thousands, except share and per share data)	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at December 31, 2015	388,103		$	19.15
Granted	—		—
Exercised	(117,857	)	19.85
Forfeited	—		—
Outstanding at December 31, 2016	270,246		$	18.85	1.9 years	$	6,527
Exercisable at December 31, 2016	270,246		$	18.85	1.9 years	$	6,527

Restricted Stock Units

The Company awards nonvested stock, in the form of RSUs to employees and directors. RSUs generally are subject to continued employment and vest ratably over two to five years. Vesting is accelerated upon a change in control or the employee meeting certain retirement criteria. RSUs do not carry voting or dividend rights until vested. Sales of the units are restricted prior to vesting. Various information related to the RSUs is shown below.



($ in thousands)	2016		2015		2014
Compensation expense	$	850	$	725	$	945
Total fair value at vesting date	2,275		809		913
Total unrecognized compensation cost for nonvested stock units	1,084		942		1,462
Expected years to recognize unearned compensation	1.6 years		1.7 years		2.7 years

A summary of the status of the Company's RSU awards as of December 31, 2016 and changes during the year then ended is presented below.



	Shares		Weighted Average Grant Date Fair Value
Outstanding at December 31, 2015	86,354		$	14.31
Granted	32,913		29.71
Vested	(56,089	)	14.25
Forfeited	(4,480	)	13.51
Outstanding at December 31, 2016	58,698		$	23.06

Stock Plan for Non-Management Directors

The Company has adopted a Stock Plan for Non-Management Directors, which provides for issuing up to 200,000 shares of common stock to non-management directors as compensation in lieu of cash. At December 31, 2016, there were 29,694 shares of stock available for issuance under the Stock Plan for Non-Management Directors.

Various information related to the Director Plan is shown below.



(in thousands, except share and per share data)	2016		2015		2014
Shares issued	12,528		16,283		23,135
Weighted average fair value	$	31.25	$	24.43	$	19.20
Compensation expense	407		373		329

Employee Stock Issuance

Restricted stock was issued to certain key employees as part of their compensation. The restricted stock may be in the form of a one-time award or paid in pro rata installments. The stock is restricted for at least 2 years and upon issuance may be fully vested or vest over 5 years. The Company recognized zero, $0.2 million, and $0.1 million of stock-based compensation expense for the shares issued to the employees in 2016, 2015, and 2014, respectively. The Company issued zero, 14,110, and 34,034 shares in 2016, 2015, and 2014, respectively.

Long-term incentives

The Company has entered into long-term incentive agreements with certain key employees. These awards are conditioned on certain performance criteria and market criteria measured against a group of peer banks over a 3 year period for each grant. The awards contain minimum (threshold), target, and maximum (exceptional) performance levels. In the event of a change in control, as defined in the plan, the awards will vest at a minimum of the target level. The amount of the awards are determined at the end of the 3 year vesting and performance period. In February 2017, the Company awarded 118,519 shares to employees upon completion of the 2014-2016 performance cycle. In January 2016, the Company awarded 159,094 shares to employees upon completion of the 2013-2015 performance cycle. In February 2015, the Company awarded 122,470 shares to employees upon completion of the 2012-2014 performance cycle. Information related to the outstanding grants at December 31, 2016 is shown below:



(in thousands, except share and per share data)	2015 - 2017 Cycle		2016 - 2018 Cycle
Shares issuable at target	113,903		95,694
Maximum shares issuable	142,292		117,681
Unrecognized compensation cost	$	1,140	$	1,929
Weighted average grant date fair value	19.21		25.26

The Company recorded $2.5 million, $2.7 million and $1.8 million of stock-based compensation expense for these awards during 2016, 2015 and 2014, respectively. In 2016, this expense included an additional $0.2 million related to modifications made for retiring executives. The modification allows for portions of outstanding performance awards to continue to vest as though employment had not terminated and will be paid based on actual performance as determined by the compensation committee following completion of the applicable performance period.

401(k) plans

The Company has a 401(k) savings plan which covers substantially all full-time employees over the age of 21. The amount charged to expense for the Company's contributions to the plan was $1.7 million, $1.6 million and $1.4 million for 2016, 2015, and 2014, respectively.