STOCK COMPENSATION

Board of Directors' Stock Compensation

Members of the Board of Directors receive common shares of the Corporation equal in value to the amount of fees individually earned during the previous year for service as a director. The common shares are distributed to the Corporation's individual board members from treasury shares of the Corporation on or about January 15 following the calendar year of service.

Additionally, the Chief Executive Officer of the Corporation, who does not receive cash compensation as a member of the Board of Directors, is awarded common shares equal in value to the average of those awarded to board members not employed by the Corporation who have served for 12 months during the prior year.

During January 2017 and 2016, 7,880 and 9,532 shares, respectively, were re-issued from treasury to fund the stock component of directors' compensation. An expense of $68 thousand and $65 thousand related to this compensation was recognized during the three-month periods ended September 30, 2017 and 2016, respectively. An expense of $222 thousand and $200 thousand related to this compensation was recognized during the nine month periods ended September 30, 2017 and 2016, respectively. This expense is accrued as shares are earned.

Restricted Stock Plan

Pursuant to the Corporation’s Restricted Stock Plan, the Corporation may make discretionary grants of restricted stock to officers other than the Corporation's Chief Executive Officer. Compensation expense is recognized over the vesting period of the awards based on the fair value of the stock at issue date.

A summary of restricted stock activity for the three month period ended September 30, 2017 is presented below:



	Shares	Weighted–Average Grant Date Fair Value
Nonvested at July 1, 2017	22,240	$	29.96
Granted	—	—
Vested	—	—
Forfeited or cancelled	—	—
Nonvested at September 30, 2017	22,240	$	29.96

A summary of restricted stock activity for the nine month period ended September 30, 2017 is presented below:



	Shares		Weighted–Average Grant Date Fair Value
Nonvested at January 1, 2017	23,794		$	29.90
Granted	—		—
Vested	(415	)	26.59
Forfeited or cancelled	(1,139	)	29.97
Nonvested at September 30, 2017	22,240		$	29.96

As of September 30, 2017, there was $504 thousand of total unrecognized compensation cost related to nonvested shares granted under the Plan. The cost is expected to be recognized over a weighted-average period of 3.21 years. The total fair value of shares vested was $16 thousand and $17 thousand for the nine month periods ended September 30, 2017 and 2016, respectively.