(12) Equity Incentive Plan

At the Company’s 2014 annual meeting, the shareholders adopted the Company’s 2014 Incentive Plan (“2014 Incentive Plan”). The 2014 Incentive Plan authorizes the Company to grant options, stock awards, stock units and other awards for up to 375,000 common shares of the Company. There were 292,576 shares available for future grants under this plan at June 30, 2017.

During each of the last three years, the Board of Directors has awarded restricted common shares to senior officers of the Company. The restricted shares vest ratably over a three-year period following the grant date. The product of the number of restricted shares granted and the grant date market price of the Company’s common shares determines the fair value of restricted shares under the Company’s 2014 Incentive Plan. Management recognizes compensation expense for the fair value of restricted shares on a straight-line basis over the requisite service period for the entire award.

On January 4, 2016, directors of the Company’s banking subsidiary, Civista, were paid a retainer in the form of non-restricted common shares of the Company. The aggregate of 2,730 common shares were issued to Civista directors as payment of their retainer for their service on the Civista Board of Directors covering the period up to the 2016 Annual Meeting. This issuance was expensed in its entirety when the shares were issued in the amount of $32.

On May 17, 2016, directors of the Company’s banking subsidiary, Civista, were paid a retainer in the form of non-restricted common shares of the Company. The aggregate of 12,285 common shares were issued to Civista directors as payment of their retainer for their service on the Civista Board of Directors covering the period up to the 2017 Annual Meeting. This issuance was expensed in its entirety when the shares were issued in the amount of $130.

Finally, on May 16, 2017, directors of the Company’s banking subsidiary, Civista, were paid a retainer in the form of non-restricted common shares of the Company. The aggregate of 6,804 common shares were issued to Civista directors as payment of their retainer for their service on the Civista Board of Directors covering the period up to the 2018 Annual Meeting. This issuance was expensed in its entirety when the shares were issued in the amount of $144.

No options had been granted under the 2014 Incentive Plan as of June 30, 2017 and 2016.

The Company classifies share-based compensation for employees with “Salaries, wages and benefits” in the consolidated statements of operations. Additionally, generally accepted accounting principles require the Company to report: (1) the expense associated with the grants as an adjustment to operating cash flows, and (2) any benefits of realized tax deductions in excess of previously recognized tax benefits on compensation expense as an operating cash flow.

The following is a summary of the status of the Company’s restricted shares and changes therein for the three- and six-month periods ended June 30, 2017:


	Three months ended				Six months ended
	June 30, 2017				June 30, 2017
	Number of Restricted Shares		Weighted Average Grant Date Fair Value		Number of Restricted Shares			Weighted Average Grant Date Fair Value
Nonvested at beginning of period		42,138	$	15.60		37,050		$	10.77
Granted		—		—		17,898			22.15
Vested		—		—		(12,810	)		10.76
Forfeited		—		—		—			—

Nonvested at June 30, 2017		42,138	$	15.60		42,138		$	15.60

The following is a summary of the status of the Company’s restricted shares as of June 30, 2017:


At June 30, 2017
Shares	Expense		Years
16,699	$	18		0.50
15,748		50		1.50
11,713		146		2.50
10,260		77		3.50
6,185		125		4.50

60,605	$	416		3.08

During the six months ended June 30, 2017, the Company recorded $173 of share-based compensation expense and $144 of director retainer fees for shares granted under the 2014 Incentive Plan. At June 30, 2017, the total compensation cost related to unvested awards not yet recognized is $416, which is expected to be recognized over the weighted average remaining life of the grants of 3.08 years.