401(k) Retirement Plan. The Bank has a 401(k) retirement plan that covers substantially all eligible employees. The Bank makes “safe harbor” matching contributions of up to 4% of eligible compensation, depending upon the percentage of eligible pay deferred into the plan by the employee. Additional profit-sharing contributions of 4% of eligible salary have been accrued for the plan year ended June 30, 2016, which the board of directors authorizes based on management recommendations and financial performance for fiscal 2016. Total 401(k) expense for fiscal 2016, 2015, and 2014 was $834,000, $752,000, and $485,000, respectively. At June 30, 2016, 401(k) plan participants held approximately 421,000 shares of the Company’s stock in the plan. Employee deferrals and safe harbor contributions are fully vested. Profit-sharing or other contributions vest over a period of five years.

Management Recognition Plan (MRP). The Bank adopted an MRP for the benefit of non-employee directors and two MRPs for officers and key employees (who may also be directors) in April 1994. During fiscal 2012, the Bank granted 6,072 shares (split-adjusted) to employees. The shares granted are in the form of restricted stock vested at the rate of 20% of such shares per year. For fiscal 2016, 2015, and 2014, there were 1,214 shares vested each year. Compensation expense, in the amount of the fair market value of the common stock at the date of grant, is recognized pro-rata over the five years during which the shares vest.

The Board of Directors can terminate the MRP plan at any time, and if it does so, any shares not allocated will revert to the Company. The MRP expense for fiscal 2016, 2015, and 2014 was $13,000 for each year. At June 30, 2016, unvested compensation expense related to the MRP was approximately $13,000.

Equity Incentive Plan. The Company adopted an Equity Incentive Plan (EIP) in 2008, reserving for award 132,000 shares (split-adjusted). EIP shares are available for award to directors, officers, and employees of the Company and its affiliates by a committee of outside directors. The committee has the power to set vesting requirements for each award under the EIP. During fiscal 2012, the Company awarded 73,928 shares (split-adjusted); during fiscal 2014, the Company awarded 24,000 shares (split-adjusted); during fiscal 2015, the Company awarded 8,000 shares (split-adjusted); and during fiscal 2016, the Company awarded 3,750 shares. All awards have been in the form of restricted stock, and all will vest at the rate of 20% of such shares per year. During fiscal 2016, 2015, and 2014, there were 19,786, 21,186, and 14,786 EIP shares (split-adjusted), respectively, vested each year. Compensation expense, in the amount of the fair market value of the common stock at the date of grant, is recognized pro-rata over the five years during which the shares vest.

The Board of Directors can terminate EIP awards at any time, and if it does so, any shares not allocated will revert to the Company. The EIP expense for fiscal 2016, 2015, and 2014 was $260,000, 275,000, and $202,000, respectively. At June 30, 2016, unvested compensation expense related to the EIP was approximately $504,000.

Stock Option Plans. The Company adopted a stock option plan in October 2003. Under the plan, the Company has granted options to purchase 242,000 shares (split-adjusted) to employees and directors, of which, options to purchase 143,000 shares (split-adjusted) have been exercised, options to purchase 45,000 shares (split-adjusted) have been forfeited, and 54,000 remain outstanding. Under the 2003 Plan, exercised options may be issued from either authorized but unissued shares, or treasury shares.

As of June 30, 2016, there was $30,000 in remaining unrecognized compensation expense related to nonvested stock options, which will be recognized over the remaining weighted average vesting period. The aggregate intrinsic value of stock options outstanding at June 30, 2016, was $798,000, and the aggregate intrinsic value of stock options exercisable at June 30, 2016, was $726,000. During fiscal 2016, options to purchase 15,000 shares were exercised. The intrinsic value of these options, based on the Company’s closing stock price of $23.53, was $254,000. The intrinsic value of options vested in fiscal 2016, 2015, and 2014 was $37,000, $115,000, and $129,000, respectively.

	2016		2015		2014
	Weighted		Weighted		Weighted
	Average		Average		Average
	Price	Number	Price	Number	Price	Number
Outstanding at beginning of year	$ 8.28	69,000	$ 7.29	100,000	$ 7.42	168,800
Granted	-	-	17.55	10,000	-	-
Exercised	6.38	(15,000)	8.10	(41,000)	7.62	(68,800)
Forfeited	-	-	-	-	-	-
Outstanding at year-end	$ 8.74	54,000	$ 8.28	69,000	$ 7.29	100,000
Options exercisable at year-end	$ 7.03	44,000	$ 6.39	55,000	$ 7.10	86,000

The following is a summary of the assumptions used in the Black-Scholes pricing model in determining the fair values of options granted during fiscal year 2015. (No options were granted in fiscal 2016 or 2014):

	2016		2015		2014

Assumptions:
Expected dividend yield		-		1.94%		-
Expected volatility		-		22.48%		-
Risk-free interest rate		-		2.46%		-
Weighted-average expected life (years)		-		10.00		-
Weighted average fair value of options granted during the year		-		$ 4.29		-

The table below summarizes information about stock options outstanding under the plan at June 30, 2016:

	Options Outstanding		Options Exercisable
Weighted
Average		Weighted		Weighted
Remaining		Average		Average
Contractual	Number	Exercise	Number	Exercise
Life	Outstanding	Price	Exercisable	Price

28.6 mo.	10,000	6.08	10,000	6.08
42.5 mo.	30,000	6.38	30,000	6.38
64.7 mo.	4,000	11.18	2,000	11.18
98.3 mo.	10,000	17.55	2,000	17.55