The Company maintains the 2021 Stock Plan ("2021 Plan"), the 2016 Stock Plan (“2016 Plan”), the 2006 Stock Plan (“2006 Plan”), the 2021 Employee Stock Purchase Plan ("2021 ESPP") and the 2011 Employee Stock Purchase Plan (“2011 ESPP”).

In connection with the acquisition of Virginia Heritage Bank ("Virginia Heritage"), the Company assumed the Virginia Heritage 2006 Stock Option Plan and the 2010 Long Term Incentive Plan (the “Virginia Heritage Plans”).

The Company adopted the 2021 Plan upon approval by the shareholders at the 2021 Annual Meeting held on May 20, 2021. The 2021 Plan provides directors and selected employees of the Bank, the Company and their affiliates with the opportunity to acquire shares of stock, through awards of options, time vested restricted stock, performance-based restricted stock and stock appreciation rights. Under the 2021 Plan, 1,300,000 shares of common stock were initially reserved for issuance.

For awards that are service based, compensation expense is being recognized over the service (vesting) period based on fair value, which for stock option grants is computed using the Black-Scholes model. For restricted stock awards granted under the 2021 Plan, fair value is based on the Company’s closing price on the date of grant. For awards that are performance-based, compensation expense is initially recorded based on the probability of achievement of the goals underlying the grant at target.

In February 2023, the Company awarded 168,994 shares of time vested restricted stock to senior officers, directors and certain employees. The shares vest in three substantially equal installments beginning on the first anniversary of the date of grant.

In February 2023, the Company awarded senior officers a targeted number of 59,816 performance vested restricted stock units (“PRSUs”). The vesting of PRSUs is 100% after three years with payouts based on threshold, target or maximum average performance targets over a three year period. There are two performance metrics: 1) total shareholder's return; and 2) return on average assets. In February 2023, the 2020 performance award vested and 11,187 incremental shares were awarded.

In March 2023, the Company awarded 2,540 shares of time vested restricted stock to two employees. The shares vest in three substantially equal installments beginning on the first anniversary of the date of grant.

In May 2023, the Company awarded 984 shares of time vested restricted stock to two employees. The shares vest in three substantially equal installments beginning on the first anniversary of the date of grant.

In June 2023, the Company awarded 1,024 shares of time vested restricted stock to two employees. The shares vest in three substantially equal installments beginning on the first anniversary of the date of grant.

In July 2023, the Company awarded 462 shares of time vested restricted stock to an employee. The shares vest in three substantially equal installments beginning on the first anniversary of the date of grant.

In September 2023, the Company awarded 13,818 shares of time vested restricted stock to an employee. The shares vest in three substantially equal installments beginning on the first anniversary of the date of grant.

In October 2023, the Company awarded 2,434 shares of time vested restricted stock to an employee. The shares vest in three substantially equal installments beginning on the first anniversary of the date of grant.

The Company has unvested restricted stock awards and PRSU grants of 437,207 shares at December 31, 2023. Unrecognized stock based compensation expense related to restricted stock awards and PRSU grants totaled $10.1 million at December 31, 2023. At such date, the weighted-average period over which this unrecognized expense was expected to be recognized was 1.87 years.

The following table summarizes the unvested restricted stock awards for performance for the years ended December 31, 2023, 2022 and 2021:


	Years Ended December 31,
	2023			2022			2021
Performance Awards	Shares	Weighted- Average Grant Date Fair Value		Shares	Weighted- Average Grant Date Fair Value		Shares	Weighted- Average Grant Date Fair Value

Unvested at beginning	129,855	$	45.15	118,568	$	44.71	90,642	$	49.11
Issued	71,003	40.50		37,775	53.97		51,564	42.97
Forfeited	(44,084)	40.29		(1,966)	55.76		(580)	60.45
Vested	(33,559)	44.60		(24,522)	55.76		(23,058)	60.45
Unvested at end	123,215	$	44.74	129,855	$	45.15	118,568	$	44.71


	Years Ended December 31,
	2023			2022			2021
Time Vested Awards	Shares	Weighted- Average Grant Date Fair Value		Shares	Weighted- Average Grant Date Fair Value		Shares	Weighted- Average Grant Date Fair Value
Unvested at beginning	302,148	$	53.75	300,792	$	46.24	218,031	$	45.89
Issued	190,256	44.16		166,471	59.72		179,624	47.63
Forfeited	(27,558)	51.57		(12,064)	53.10		(8,489)	47.38
Vested	(150,854)	51.76		(153,051)	45.54		(88,374)	48.10
Unvested at end	313,992	$	49.08	302,148	$	53.75	300,792	$	46.24

Below is a summary of stock option activity for the years ended December 31, 2023, 2022 and 2021. The information excludes restricted stock units and awards.


	Years Ended December 31,
	2023			2022			2021
	Shares	Weighted- Average Exercise Price		Shares	Weighted- Average Exercise Price		Shares	Weighted- Average Exercise Price
Beginning balance	2,500	$	47.95	5,789	$	36.96	5,789	$	36.96
Issued	—	—		—	—		—	—
Exercised	—	—		(3,289)	28.60		—	—
Forfeited	—	—		—	—		—	—
Ending balance	2,500	$	47.95	2,500	$	47.95	5,789	$	36.96
Exercisable end of year	2,500	$	47.95	1,666	$	47.95	4,122	$	32.51

Grants of stock options have expected lives based on the "simplified" method allowed by ASC 718 "Compensation," whereby the expected term is equal to the midpoint between the vesting date and the end of the contractual term of the award.

There was no intrinsic value of outstanding stock options for both December 31, 2023 and 2022. The total fair value of stock options vested was $18 thousand for all three years ended December 31, 2023, 2022 and 2021. At December 31, 2023, there is no unrecognized stock-based compensation expense related to stock options.


	Years Ended December 31,
(dollars in thousands)	2023		2022		2021
Proceeds from stock options exercised	$	—	$	97	$	—
Tax benefits realized from stock compensation	—		3		—
Intrinsic value of stock options exercised	—		98		—

Approved by shareholders in May 2021, the 2021 ESPP reserved 200,000 shares of common stock for issuance to employees. Whole shares are sold to participants in the plan at 85% of the lower of the stock price at the beginning or end of each quarterly offering period. The 2021 ESPP is available to all eligible employees who have completed at least one year of continuous employment, work at least 20 hours per week and at least five months a year. Participants may contribute a minimum of $10 per pay period to a maximum of $25,000 annually (not to exceed more than 10% of compensation per pay period). At December 31, 2023, the 2021 ESPP had 157,524 shares reserved for issuance.

Included in salaries and employee benefits in the accompanying Consolidated Statements of Income, the Company recognized $10.0 million, $6.0 million and $7.8 million in stock-based compensation expense for 2023, 2022 and 2021, respectively. Stock-based compensation expense is recognized ratably over the requisite service period for all awards.