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Stock Compensation Plans

12 Months Ended

Dec. 31, 2024

Note 19: Stock Compensation Plans

The Company established the 2013 Equity Incentive Plan (the “2013 Plan”) for employees and directors of the Company and its subsidiaries. Under the plan, stock options or other awards could be granted with respect to 700,000 shares of common stock. On May 9, 2018, the Company’s stockholders approved the Great Southern Bancorp, Inc. 2018 Omnibus Incentive Plan (the “2018 Plan”). Upon the stockholders’ approval of the 2018 Plan, the 2013 Plan was frozen. As a result, no new stock options or other awards may be granted under the 2013 Plan; however, existing outstanding awards under the 2013 Plan were not affected. At December 31, 2024, 124,676 options were outstanding under the 2013 Plan.

The Company established the 2018 Plan for employees and directors of the Company and its subsidiaries. Under the plan, stock options or other awards could be granted with respect to 800,000 shares of common stock. On May 11, 2022, the Company’s stockholders approved the Great Southern Bancorp, Inc. 2022 Omnibus Incentive Plan (the “2022 Plan”). Upon the stockholders’ approval of the 2022 Plan, the 2018 Plan was frozen. As a result, no new stock options or other awards may be granted under the 2018 Plan; however, existing outstanding awards under the 2018 Plan were not affected. At December 31, 2024, 492,658 options were outstanding under the 2018 Plan.

The 2022 Plan provides for the grant from time to time to directors, emeritus directors, officers, employees and advisory directors of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares and performance units. The number of shares of common stock available for awards under the 2022 Plan is 900,000 (the “2022 Plan Limit”). Shares utilized for awards other than stock options and stock appreciation rights will be counted against the 2022 Plan Limit on a 2.5-to-1 basis. At December 31, 2024, 589,987 options were outstanding under the 2022 Plan.

Stock options may be either incentive stock options or nonqualified stock options, and the option price must be at least equal to the fair value of the Company’s common stock on the date of grant. Options generally are granted for a 10-year term and generally become exercisable in four cumulative annual installments of 25% commencing two years from the date of grant. The Compensation Committee has discretion to accelerate a participant’s right to exercise an option.

Stock awards may be granted upon terms and conditions determined solely at the discretion of the Compensation Committee.

The table below summarizes transactions under the Company’s stock compensation plans, all of which related to stock options granted under such plans:


		Shares	Weighted
	Available	Under	Average
	to be Granted	Option	Exercise Price

Balance, January 1, 2022	86,672	1,033,303	$	50.528
Granted from 2018 Plan	(2,500)	2,500		61.550
Forfeited from terminated plan(s)	39,235	(39,235)		52.523
Termination of 2018 Plan	(123,407)	—		—
Available to be granted from 2022 Plan	900,000	—		—
Granted from 2022 Plan	(205,900)	205,900		61.505
Exercised	—	(136,801)		42.149
Forfeited from current plan(s)	750	(750)		61.550

Balance, December 31, 2022	694,850	1,064,917		53.671
Forfeited from terminated plan(s)	—	(9,100)		51.123
Granted from 2022 Plan	(210,300)	210,300		53.166
Exercised	—	(22,762)		38.830
Forfeited from current plan(s)	3,050	(3,050)		61.550

Balance, December 31, 2023	487,600	1,240,305		53.857
Forfeited from terminated plan(s)	—	(15,634)		51.289
Granted from 2022 Plan	(214,800)	214,800		61.706
Exercised	—	(203,601)		49.586
Forfeited from current plan(s)	28,549	(28,549)		57.483

Balance, December 31, 2024	301,349	1,207,321	$	55.921

The Company’s stock option grants contain terms that provide for a graded vesting schedule whereby portions of the options vest in increments over the requisite service period. These options typically vest one-fourth at the end of each of years two, three, four and five from the grant date. As provided for under FASB ASC 718, the Company has elected to recognize compensation expense for options with graded vesting schedules on a straight-line basis over the requisite service period for the entire option grant. In addition, ASC 718 requires companies to recognize compensation expense based on the estimated number of stock options for which service is expected to be rendered. The Company’s historical forfeitures of its share-based awards have not been significant. Forfeitures are estimated annually based on historical information.

The fair value of each option award is estimated on the date of the grant using the Black-Scholes option pricing model with the following assumptions for the years ended December 31, 2024, 2023 and 2022:


	2024			2023			2022

Expected dividends per share	$	1.60		$	1.60		$	1.60
Risk-free interest rate		4.31	%		4.51	%		3.77	%
Expected life of options		6 years			6 years			6 years
Expected volatility		25.48	%		23.69	%		23.70	%
Weighted average fair value of options granted during year	$	15.01		$	11.69		$	13.46

Expected volatilities are based on the historical volatility of the Company’s stock price over the measured period. The expected life of options granted is based on actual historical exercise behavior of all employees and directors and approximates the graded vesting period of the options. Expected dividends are based on the annualized dividends declared at the time of the option grant. The risk-free interest rate is based on the average of the five-year treasury rate and the seven-year treasury rate on the grant date of the options.

The following table presents the activity related to options under all plans for the year ended December 31, 2024:


				Weighted
		Weighted		Average
		Average		Remaining
		Exercise		Contractual
	Options	Price		Term

Options outstanding, January 1, 2024	1,240,305	$	53.857	6.74 years
Granted	214,800		61.706
Exercised	(203,601)		49.586
Forfeited	(44,183)		55.291
Options outstanding, December 31, 2024	1,207,321		55.921	6.80 years

Options exercisable, December 31, 2024	539,611	$	53.798	4.63 years

For the years ended December 31, 2024, 2023 and 2022, options granted were 214,800, 210,300, and 208,400, respectively. The total intrinsic value (amount by which the fair value of the underlying stock exceeds the exercise price of an option on exercise date) of options exercised during the years ended December 31, 2024, 2023 and 2022, was $2.7 million, $354,000 and $2.6 million, respectively. Cash received from the exercise of options for the years ended December 31, 2024, 2023 and 2022, was $10.1 million, $884,000 and $6.3 million, respectively. The actual tax benefit realized for the tax deductions from option exercises totaled $2.5 million, $212,000 and $2.3 million for the years ended December 31, 2024, 2023 and 2022, respectively. The total intrinsic value of options outstanding at December 31, 2024, 2023 and 2022, was $5.4 million, $7.4 million and $6.7 million, respectively. The total intrinsic value of options exercisable at December 31, 2024, 2023 and 2022, was $3.3 million, $4.5 million and $4.1 million, respectively.

The following table presents the activity related to nonvested options under all plans for the year ended December 31, 2024.


		Weighted		Weighted
		Average		Average
		Exercise		Grant Date
	Options	Price		Fair Value

Nonvested options, January 1, 2024	668,815	$	55.711	$	11.640
Granted	214,800		61.706		15.013
Vested this period	(176,580)		55.582		11.002
Nonvested options forfeited	(39,325)		56.320		12.113

Nonvested options, December 31, 2024	667,710	$	57.638	$	12.866

For the years ended December 31, 2024, 2023 and 2022, compensation expense for stock option grants was $1.8 million, $1.6 million and $1.4 million, respectively. At December 31, 2024, there was $8.1 million of total unrecognized compensation cost related to nonvested options granted under the Company’s plans. This compensation cost is expected to be recognized through 2030, with the majority of this expense recognized in 2025 and 2026.

The following table further summarizes information about stock options outstanding at December 31, 2024:


	Options Outstanding
		Weighted			Options Exercisable
		Average	Weighted			Weighted
		Remaining	Average			Average
	Number	Contractual	Exercise		Number	Exercise
Range of Exercise Prices	Outstanding	Term	Price		Exercisable	Price

$41.300 to 41.740	149,610	4.74 years	$	41.632	113,686	$	41.598
$50.710 to 59.750	551,814	6.24 years		54.831	270,205		55.046
$60.150 to 61.790	505,897	8.02 years		61.336	155,720		60.537

	1,207,321	6.80 years	$	55.921	539,611	$	53.798