In May 2018, the shareholders approved the 2018 Equity Plan which authorizes the issuance of up to 9,000,000 shares of CVB’s common stock for eligible participants, which include all of the Company’s employees, officers, and directors, and expires in 2028. The plan authorizes the issuance of a variety of types of equity awards, which include incentive stock options, non-qualified stock options, restricted stock awards (“RSAs”), restricted stock units (“RSUs”), and other stock-based awards. The 2018 Equity Plan replaced the 2008 Equity Incentive Plan. No further grants will be made under the 2008 Equity Incentive Plan, but shares may continue to be issued under such plan pursuant to grants previously made. As of December 31, 2021, we have 152,700 outstanding options, unvested RSAs and RSUs under our 2008 Equity Incentive Plan.

The Company expensed $220,000, $183,000, and $352,000, for the years ended December 31, 2021, 2020 and 2019, respectively.

The estimated fair value of the options granted during 2021 and prior years was calculated using the Black-Scholes options pricing model. There were 64,500, 217,500 and 1,500 options granted during 2021, 2020 and 2019, respectively. The options will vest, in equal installments, over a five-year period. The fair value of each stock option granted in 2020, 2019 and 2018, was estimated on the date of grant using the following weighted-average assumptions.


	Year Ended December 31,
	2021			2020			2019
Dividend yield		3.6	%		4.0	%		2.4	%
Volatility		29.6	%		27.1	%		23.3	%
Risk-free interest rate		0.4	%		0.4	%		2.5	%
Expected life	5.5 years			5.3 years			5.4 years
Weighted average grant date fair value	$	3.45		$	2.56		$	4.35

The expected volatility is solely based on the daily historical stock price volatility over the expected option life. The expected life of options granted is derived from the output of the option valuation model and represents the period of time an optionee will hold an option before exercising it. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury five-year constant maturity yield curve in effect at the time of the grant. In connection with the adoption of ASU 2016-09 in 2017, the Company elected to account for forfeitures as they occur, rather than to estimate forfeitures over the vesting period.

The following table presents option activity under the Company’s stock option plans as of and for the year ended December 31, 2021.


	Number of Stock Options Outstanding			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
	(In thousands)					(In years)		(In thousands)
Outstanding at January 1, 2021		428		$	17.57
Granted		65			19.95
Exercised		(68	)		18.88
Forfeited or expired		(11	)		18.98
Outstanding at December 31, 2021		414		$	17.98		6.57	$	1,492
Vested or expected to vest at December 31, 2021		414		$	17.98		6.57	$	1,492
Exercisable at December 31, 2021		212		$	17.03		4.75	$	975

The total intrinsic value of options exercised during the years ended December 31, 2021, 2020 and 2019 was $262,000, $144,000 and $1.3 million, respectively.

As of December 31, 2021, there was a total of $480,000 in unrecognized compensation cost related to nonvested options granted under the Plan. That cost is expected to be recognized over a weighted-average period of approximately 2.8 years. The total fair value of options vested was $258,000, $183,000 and $520,000 during 2021, 2020 and 2019, respectively. Cash received from stock option exercises was $1.3 million, $232,000 and $2.2 million, in 2021, 2020 and 2019, respectively.

At December 31, 2021, options for the purchase of 414,300 shares of CVB’s common stock were outstanding under the above plans, of which options to purchase 212,100 shares were exercisable at prices ranging from $11.03 to $24.83.

The Company has a policy of issuing new shares to satisfy share option exercises.

The Company granted 394,884, 358,464 and 217,000 restricted stock awards during 2021, 2020 and 2019 respectively. The weighted average grant date fair value of RSAs and RSUs granted in 2021, 2020 and 2019 was $20.43 per share, $18.20 per share and $20.76 per share, respectively. These awards will vest, in equal installments, over a period of approximately one to five years.

Compensation cost is recognized over the requisite service period, which is approximately one to five years, and amounted to $5.0 million, $5.3 million and $5.2 million during the years ended December 31, 2021, 2020 and 2019, respectively. Total unrecognized compensation cost related to RSAs and RSUs was $9.4 million at December 31, 2021.

The table below summarizes activity related to the Company’s non-vested RSAs and RSUs for the year ended December 31, 2021.


	Shares			Weighted Average Fair Value
	(In thousands)
Nonvested at January 1, 2021		491		$	19.36
Granted		395			20.43
Vested		(176	)		19.51
Forfeited		(47	)		21.23
Nonvested at December 31, 2021		663		$	19.83