Note I - Stock Based Compensation

In accordance with the terms of the 1981 Stock Purchase Plan (the "1981 Plan"), the Company is obligated to repurchase shares issued under the 1981 Plan, at a price equal to 90% of the book value of the shares at the end of the quarter immediately preceding the date of repurchase from one outside director. A limited number of shares have ever been repurchased under the 1981 Plan. At December 31, 2017, there were 46,875 shares (Class A) and 187,500 shares (Class B) outstanding which remain eligible for repurchase by the Company.

Restricted Stock:

The Company issues shares of restricted Class B common stock to the Company's outside directors, which serve as a portion of the annual compensation for the outside directors. The shares are distributed to the outside directors on the vesting date, one year following the date of grant. On August 31, 2017, the Company granted shares of restricted Class B common stock to a new outside director, in lieu of cash, as such director's pro-rated annual retainer compensation, which shares will vest and be distributed on May 9, 2018. The table below provides detail of the stock issuances for 2017, 2016 and 2015:

				Grant Date
Grant	Number of Shares	Vesting		Fair Value
Date	Issued	Date	Period	Per Share

5/12/2015	21,252	5/12/2016	7/1/2015 - 6/30/2016	$22.59

5/10/2016	17,677	5/10/2017	7/1/2016 - 6/30/2017	$24.89

5/9/2017	18,183	5/9/2018	7/1/2017 - 6/30/2018	$24.20

8/31/2017	1,257	5/9/2018	8/31/2017 - 6/30/2018	$21.90

Compensation expense related to the above stock grants is recognized over the period in which the directors render the services.

Director compensation expense associated with these restricted stock grants of $454, $460 and $460 was charged against income for the restricted stock awards granted in 2017, 2016 and 2015, respectively.

On February 8, 2017, the Company issued 20,181 shares of restricted Class B common stock to certain of the Company's executives under the Company's Restricted Stock Compensation Plan. The shares of restricted stock represent a portion of the calendar year 2016 compensation earned by certain executives under the terms of the Company's Executive Incentive Bonus Plan. The shares of restricted stock will vest over a three-year period from the date of grant. The shares of restricted stock were valued based on the closing price of the Company's Class B common stock on February 8, 2017, the day the shares of restricted stock were granted. Each share of restricted stock was valued at $23.80 per share, representing a total value of $480. Non-vested shares of restricted stock will be forfeited should an executive's employment terminate for any reason other than death, disability, or retirement as defined by the Compensation Committee.

In May 2017, the Company's Compensation Committee granted equity-based awards pursuant to the Company's Long-Term Incentive Plan (the "Long-Term Incentive Plan"), which was approved by the Company's shareholders at the 2017 Annual Meeting of Shareholders. Certain participants under the Long-Term Incentive Plan were granted performance-based equity awards ("2017 LTIP Awards"), with the number of shares of Class B common stock earned pursuant to such award determined by applying a performance matrix consisting of a measurement of the combined results of the Company's 2017 growth in net premiums earned and the Company's 2017 combined ratio. The combined ratio is calculated as a ratio of (A) losses and loss expenses incurred, plus other operating expenses, less commission and other income to (B) net premiums earned. Any 2017 LTIP Awards earned by the Company's named executive officers ("NEOs") will be paid in shares of restricted Class B common stock at the end of the 2017 annual performance period and will vest after a one-year period. Any 2017 LTIP Awards earned by non-NEOs will be paid in shares of restricted Class B common stock at the end of the 2017 annual performance period and will vest ratably over a three-year period. In addition to the 2017 LTIP Awards, in May 2017 the Company's Compensation Committee also granted Value Creation Incentive Plan awards ("VCIP Awards") to certain participants under the Long-Term Incentive Plan. The VCIP Awards are performance-based equity awards that will be earned based on the Company's cumulative operating income over a three-year performance period from January 1, 2017 through December 31, 2019 relative to an operating income goal for the period set by the Compensation Committee in March 2017. For the purpose of the VCIP Awards, cumulative operating income is equal to income before taxes excluding net realized gains (losses) on investments. Any VCIP Awards that are earned will be paid in unrestricted shares of the Company's Class B common stock at the end of the three-year performance period, but no later than March 15, 2020. No shares were issued as of December 31, 2017 with respect to either the 2017 LTIP Awards or the VCIP Awards.