Note 11 - Employee Benefit Plans

The Bank has established a 401(k) profit sharing plan, which allows eligible employees to save at a minimum one percent of eligible compensation on a pre-tax basis, subject to certain Internal Revenue Service limitations. The Bank will match 50% of employee 401(k) contributions up to four percent of total eligible compensation. In addition, the Bank may make a discretionary contribution from time to time. A participant is 100% vested in the participant’s deferral contributions and employer matching contributions. A six-year vesting schedule applies to employer discretionary contributions. Contributions to the 401(k) profit sharing plan for both the employer matching contribution and the discretionary contribution were $670, $744 and $680 thousand for 2013, 2012 and 2011, respectively.

Restricted Stock Awards

The Company has a Long-Term Stock Incentive Plan under which 11,000 shares of restricted stock were issued to 53 employees during 2013, 11,000 shares of restricted stock were issued to 54 employees and 11,000 shares to 56 employees during 2012 and 2011, respectively. Under the plan, the shares vest 100% in three years. During the 3 year vesting period, the employees received dividends or dividend equivalent compensation on the shares. Due to employee termination, there were 620, 1,135 and 778 shares forfeited during 2013, 2012 and 2011, respectively. During 2012, 8,700 shares awarded in 2009 were vested 100%, and 41 employees received the stock. During 2013, 9,160 shares awarded in 2010 were vested 100%, and 45 employees received the stock. Due to retirement, one employee received 210 shares from awards granted in 2009, 2010 and 2011. The majority of shares, 8,875, awarded in 2008 were vested 100% during 2011 and 44 employees received the stock. Three employees received 557 shares from awards granted in 2008, 2009 and 2010 due to retirement. Compensation expense applicable to the restricted stock totaled $253, $219 and $202 thousand for the year ending December 31, 2013, 2012 and 2011, respectively.

The following table summarizes the activity of restricted stock awards as of December 31:


	Shares
	2013			2012			2011
Beginning of period		30,670			29,715			28,925
Granted		11,000			11,000			11,000
Vested		(9,160	)		(8,910	)		(9,432	)
Forfeited		(620	)		(1,135	)		(778	)

Nonvested, end of period		31,890			30,670			29,715

As of December 31, 2013, there was $366 thousand of unrecognized compensation cost related to the nonvested portion of restricted stock awards under the plan.