SHARE-BASED COMPENSATION PLANS

6 Months Ended

Jun. 30, 2020

Share-based Payment Arrangement [Abstract]

The Company maintains share-based compensation plans under the shareholder-approved 2011 Plan. The purpose of the share-based compensation plans is to provide officers, employees, and non-employee members of the Board of Directors of the Company with additional incentive to further the success of the Company. At June 30, 2020, 881,920 shares of the common stock of the Company were reserved to be issued and 347,721 shares were available to be issued.

The 2011 Plan incentive awards may consist of grants of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, deferred stock units and performance shares. All employees and members of the Board of Directors of the Company and its subsidiaries, are eligible to participate in the 2011 Plan. The 2011 Plan allows for the Compensation Committee of the Board of Directors to determine the type of incentive to be awarded, its term, manner of exercise, vesting and restrictions on shares. Generally, awards are nonqualified under the IRC, unless the awards are deemed to be incentive awards to employees at the Compensation Committee’s discretion.

The table below presents a summary of nonvested restricted shares activity for the six months ended June 30, 2020:


	Shares	Weighted Average Grant Date Fair Value
Nonvested shares, beginning of year	228,758	$	21.90
Granted	111,307	20.24
Forfeited	(4,000)	19.65
Vested	(61,731)	20.52
Nonvested shares, at period end	274,334	$	21.57

The following table presents restricted shares compensation expense, with tax benefit information, and fair value of shares vested, for the three and six months ended June 30, 2020 and 2019:


	Three months ended June 30,						Six months ended June 30,
	2020		2019		2020		2019
Restricted share award expense	$	654	$	181	$	1,173	$	676
Restricted share award tax benefit	137		38		246		148
Fair value of shares vested	347		—		1,089		444

The unrecognized compensation expense related to the share awards totaled $3.1 million at June 30, 2020 and $2.2 million at December 31, 2019. The unrecognized compensation expense at June 30, 2020 is expected to be recognized over a weighted-average period of 2.0 years.

The following table presents a summary of outstanding stock options activity for the six months ended June 30, 2020:


	Shares	Weighted Average Exercise Price
Outstanding, beginning of year	30,559	$	21.56
Forfeited	(1,000)	21.14
Expired	(2,792)	25.76

Options outstanding and exercisable	26,767	$	21.14

The exercise price of each option equals the market price of the Company’s stock on the grant date. An option’s maximum term is ten years. All options are fully vested upon issuance. The following table presents information pertaining to options outstanding and exercisable at June 30, 2020:


Exercise Price	Number Outstanding	Remaining Contractual Life (Years)	Exercise Price





$21.14	26,767	0.06	$	21.14

Outstanding and exercisable options had an intrinsic value of zero at June 30, 2020 and $41 thousand at December 31, 2019.

The Company maintains an employee stock purchase plan to provide its employees with an opportunity to purchase Company common stock. Eligible employees may purchase shares in an amount that does not exceed 10% of their annual

salary, at the lower of 95% of the fair market value of the shares on the semi-annual offering date or related purchase date. The purchases occur in March and September of each year. The Company reserved 350,000 shares of its common stock to be issued under the employee stock purchase plan. At June 30, 2020, 164,453 shares were available to be issued.

The following table presents information for the employee stock purchase plan for the three and six months ended June 30, 2020 and 2019:


	Three months ended June 30,						Six months ended June 30,
	2020		2019		2020		2019
Shares purchased	—		—		3,613		3,004
Weighted average price of shares purchased	$	—	$	—	$	16.91	$	18.96
Compensation expense recognized	—		—		3		3
Tax benefits	—		—		1		1

The Company issues either new shares or treasury shares, depending on market conditions, for award through its share-based compensation plans.