Employee Benefit Plans

12 Months Ended

Dec. 31, 2015

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Employee Benefit Plans

(12) Employee Benefit Plans

Equity Incentive Plan

During 2006, the Company adopted the River Financial Corporation 2006 Equity Incentive Plan (the “2006 Equity Incentive Plan”). During 2015, the Company adopted the River Financial Corporation 2015 Equity Incentive Plan (the “2015 Equity Incentive Plan”). These Equity Incentive Plans were adopted to provide a means of enhancing and encouraging the recruitment and retention of individuals on whom the success of the Company depends.

The 2006 Equity Incentive Plan provides for the grant of incentive stock options and nonqualified stock options. A total of 375,000 shares were reserved for possible issuance under the 2006 Equity Incentive Plan. The exercise price of each option grant equals the market price of the Company’s stock on the date of grant and an option’s term is 10 years. This plan expires on April 3, 2016. The maximum term of options granted under the plan is ten years and the plan expires ten years after the adoption date.

The 2015 Equity Incentive Plan provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock unit awards, and restricted stock awards. A total of 300,000 shares were reserved for possible issuance under the 2015 Equity Incentive Plan. The maximum term of grants under the plan is ten years and the plan expires ten years after the adoption date.

The Company also assumed outstanding Keystone incentive stock options upon the merger with Keystone. The Keystone options were converted under the terms of the merger agreement. The assumed options were fully vested at the time of the merger. The following table provides information on the options assumed in the merger.

	Exercise
Shares	Price		Expiration
31,250	$	8.00	Wednesday, March 01, 2017
1,250	$	8.00	Wednesday, March 01, 2017
6,250	$	8.00	Sunday, February 18, 2018
3,125	$	8.40	Monday, March 01, 2021
3,125	$	8.40	Monday, March 01, 2021
45,000	$	8.06

A summary of activity in the outstanding stock options for the years ended December 31, 2015 and 2014 is presented below:

						Weighted
						Average
				Weighted		Remaining
				Average		Contractual
	Shares			Exercise Price		Term (years)
Outstanding at January 1, 2015		225,000		$	11.71		3.99
Granted		23,500			15.15
Assumed		45,000			8.06
Exercised		(4,500	)		11.33
Forfeited		(2,000	)		13.50
Outstanding at December 31, 2015		287,000		$	11.41		3.33
Exercisable at December 31, 2015		231,250		$	10.84		2.28
Outstanding at January 1, 2014		250,000		$	11.75		4.96
Granted		0			0.00
Exercised		(11,500	)		11.72
Forfeited		(13,500	)		12.61
Outstanding at December 31, 2014		225,000		$	11.71		3.99
Exercisable at December 31, 2014		174,500		$	11.32		3.02

The stock options granted in 2015 have a weighted average calculated value of $1.51. The calculated value of each grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions:

Dividend yield (after three years)	1.50	%
Expected life in years	7
Expected volatility	10.00	%
Risk free interest rate	0.57	%

The Company recognized $22,000 and $27,000 in compensation expense related to performance share awards during 2015 and 2014, respectively. As of December 31, 2015, there was approximately $52,000 of unrecorded compensation expense related to the performance share awards.

Defined Contribution Plan

The Company provides a 401(k) plan, which covers substantially all of the Company’s employees who are eligible, as to age and length of service. A participant may elect to make contributions up to $18,000 and $17,500 of the participant’s annual compensation in 2015 and 2014, respectively. The Company makes contributions up to 3% of each participant’s annual compensation and the Company matches 50% of the next 2% contributed by the employee. Contributions to the plan by Company were approximately $159,000 and $144,000 in 2015 and 2014, respectively.