2.	STOCK COMPENSATION

The Corporation has a stock incentive plan for key employees and independent directors. The stock incentive plan, which is administered by a committee of the Board of Directors, provides for aggregate grants of up to 500,000 shares of common stock in the form of nonqualified options or restricted stock. For key employees, the plan vesting is one-fourth of the granted options or restricted stock per year beginning one year after the grant date, with 100% vested on the fourth anniversary of the grant date. For independent directors, the vesting schedule is one-third of the granted options or restricted stock per year beginning one year after the grant date, with 100% vested on the third anniversary of the grant date.

At September 30, 2017, there was no unrecognized compensation cost related to nonvested stock options granted under this plan and no stock options were granted during the three and nine month periods ended September 30, 2017 and 2016.

On February 14, 2017, the Corporation’s Board of Directors granted performance-based restricted stock awards (“PBRSAs”) with a maximum of 10,000 shares to an employee. The number of PBRSAs will depend on certain performance conditions and are also subject to service-based vesting.

Compensation expense for the restricted stock awards is recognized over the requisite service period noted above based on the fair value of the shares at the date of grant. Nonvested restricted stock awards are recorded as a reduction of additional paid-in-capital in shareholders’ equity until earned. Compensation expense resulting from these restricted stock awards was $204 and $600 for the three and nine months ended September 30, 2017 and $216 and $628 for the three and nine months ended September 30, 2016. As of September 30, 2017, there was $1,578 of total unrecognized compensation cost related to unvested restricted stock awards.

A summary of changes in nonvested restricted stock awards for the three months ended September 30, 2017 follows:


				Per Share Weighted Average
	Shares			Grant Date Fair Value
Nonvested at beginning of period		99,233		$	20.68
Forfeited		(135	)		25.92
Vested		(250	)		18.58

Nonvested at end of period		98,848			20.68

A summary of changes in nonvested restricted stock awards for the nine months ended September 30, 2017 follows:


				Per Share Weighted Average
	Shares			Grant Date Fair Value
Nonvested at beginning of period		100,726		$	17.36
Granted		38,123			25.92
Forfeited		(285	)		21.56
Vested		(39,716	)		17.29

Nonvested at end of period		98,848		$	20.68

The fair value of shares vested was $6 and $3 during the three months ended September 30, 2017 and 2016, respectively. The fair value of shares vested was $929 and $559 during the nine months ended September 30, 2017 and 2016, respectively.