6.	Stock Based Compensation

The Corporation follows a fair-value based method for valuing stock-based compensation that measures compensation cost at the grant date based on the fair value of the award.

The fair value of each option granted was estimated on the date of grant using the modified Black-Scholes options-pricing model.

In 2012 and 2013, no options were granted as the Corporation awarded restricted shares in lieu of options related to goals achieved within the 2011 and 2012 officer incentive plan.

A summary of the status of the Corporation’s stock option plans as of September 30, 2013 and December 31, 2012, and changes during the periods ending on those dates is presented below:


	Nine Months ended September 30, 2013					Year ended December 31, 2012
	Shares			Weighted- average exercise price		Shares			Weighted- average exercise price
Outstanding at beginning of period		581,888		$	4.62		587,342		$	4.68
Granted		0			0		0			0
Exercised		0			0		0			0
Forfeited		(587	)		2.40		(5,454	)		10.63
Expired		(16,518	)		16.13		0			0

Outstanding at end of period		564,783		$	4.29		581,888		$	4.62

Options exercisable at period end		456,473		$	4.76		395,233		$	5.70

Weighted-average fair value of options granted during the period				$	N/A				$	N/A

The following information applies to options outstanding at September 30, 2013:


	Options Outstanding								Options Exercisable
Range of Exercise Prices	Number Outstanding		Weighted- Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value		Weighted- Average Exercise Price		Number Exercisable		Aggregate Intrinsic Value		Weighted- Average Exercise Price
$1.90 – $2.51		470,100		6.6			$	2.39		361,790			$	2.41
$8.92		18,877		4.3				8.92		18,877				8.92
$11.36 – $12.35		43,473		2.6				13.69		43,473				13.69
$16.51 – $17.17		32,333		1.2				16.60		32,333				16.60

		564,783		5.9	$	773,157	$	4.29		456,473	$	586,638	$	4.76

⁽¹⁾	The intrinsic value is based on the difference of Camco’s stock price on the grant date and the stock price at September 30, 2013.

A summary of unvested options as of, and changes during the period ended, September 30, 2013, were as follows:


Unvested options:	Number			Intrinsic Value
Beginning of period		186,655		$	193,447
Granted		0
Forfeited		(271	)
Vested during the period		(78,074	)

Unvested options at September 30, 2013		108,310		$	186,519

The total intrinsic value of options exercised during the nine months ended September 30, 2013 and for the year ended December 31, 2012, was $0 as no options were exercised.

As of September 30, 2013, there was $77,000 of total unrecognized compensation cost related to non-vested stock options. The unrecognized compensation cost is expected to be recognized over a weighted-average period of 1.25 years.

In 2009, Camco granted 50,000 restricted shares of stock out of the current authorized common stock related to an employment agreement. The issuance of restricted stock vested in four equal annual increments beginning in 2010.

In March 2012, Camco granted 262,492 shares of restricted stock with an impact to unearned/deferred compensation of $625,000. The stock was granted under the Camco Financial Corporation 2010 Equity Plan to officers based on 2011 performance. The restricted stock vests over three years, 20% vested on the date of the award, 20% vested on the date that the Compensation Committee certified Camco’s 2012 financial results and 60% will vest on the date that the Compensation Committee certifies Camco’s 2013 financial results (such results are expected to be certified in the first quarter of 2014). However, if Camco’s pre-tax earnings for the fiscal year ended December 31, 2013 are not equal to or greater than the pre-tax earnings for the fiscal year ended December 31, 2011, the participant will forfeit 25% of the equity award that is to vest on that date. The fair value per share of restricted stock is the stock price at close on the grant date, which value is expensed on a straight-line basis during the vesting period.

In October 2012, Camco granted 53,187 shares of restricted stock with an impact to unearned/deferred compensation of $94,150. The stock was granted under the Camco Financial Corporation 2010 Equity Plan based on achievement of a 2012 performance goal. The restricted stock vested immediately.

In February 2013, Camco granted 90,428 shares of restricted stock with an impact to unearned/deferred compensation of $313,785 of which $62,760 was expensed in the prior year related to shares which immediately vested. The stock was granted under the Camco Financial Corporation 2010 Equity Plan to officers based on 2012 performance. Of the 90,428 shares granted, 7,378 shares were withheld for the payment of taxes. The restricted stock vests over three years, 20%, which equated to 10,700 shares, vested on the date of the award, 20% will vest on the date that the Compensation Committee certifies Camco’s 2013 financial results and 60% will vest on the date that the Compensation Committee certifies Camco’s 2014 financial results (such results are expected to be certified in the first quarter of 2014 and 2015, respectively). However, if Camco’s pre-tax earnings for the fiscal year ending December 31, 2013 or 2014 are not equal to or greater than the budgeted pre-tax earnings for the fiscal year ended December 31, 2012, the participant will forfeit 25% of the equity award that is to vest on such date. Additionally, the shares may not be transferred for one year after vesting except for settlement of taxes. The fair value per share of restricted stock is the stock price at close on the grant date, which value is expensed on a straight-line basis during the vesting period.

In February 2013, Camco granted 81,391 shares of restricted stock with an impact to unearned/deferred compensation of $282,427 of which $141,212 was expensed in the prior year related to shares which immediately vested. The stock was granted under the Camco Financial Corporation 2010 Equity Plan based on 2012 performance and 29,331 shares of the 81,391 shares granted were withheld for tax purposes related to an 83B election. The restricted stock vested 50%, or 11,364 shares, on the date of the award and 50% on the date that the Compensation Committee certifies Camco’s 2013 financial results.

The shares represented by restricted stock awards are considered outstanding at the grant date, as the recipients are entitled to voting rights and dividends, if declared. A summary of restricted stock award activity for the period is presented below:


	Non-vested Number of Shares			Weighted Average Grant Date Fair Value
Non-vested balance at December 31, 2012		219,989		$	2.39
Granted		171,819		$	3.47
Vested		(123,134	)	$	2.91
Forfeited		(951	)	$	3.09

Non-vested balance at September 30, 2013		267,723		$	2.84

At September 30, 2013, there was approximately $276,000 of compensation cost that had not been recognized related to restricted stock awards. That cost is expected to be recognized over the next 15 months.