Compensation cost is recognized for stock options and restricted stock awards issued to employees and non-employee directors. Compensation cost is measured as the fair value of these awards on their date of grant. A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the Company’s common stock at the date of grant is used as the fair value of restricted stock awards. Compensation cost is recognized over the required service period, generally defined as the vesting period for stock option and restricted stock awards.

The Company’s stock incentive programs are long-term retention programs intended to attract, retain, and provide incentives for key employees and non-employee directors in the form of incentive and non-qualified stock options and restricted stock.

The Company’s 2010 Incentive Plan, as amended, had available for issuance a total of 566,025 shares (adjusted for the 10% stock dividends in 2013, 2012, and 2011). The Plan expired on March 16, 2020 and no further shares may be issued from the plan.

On March 15, 2016, the Company adopted the 2016 Equity Incentive Plan, making available for issuance 400,000 stock options. The Plan expired on March 15, 2021 and no further shares may be issued from the plan.

On March 17, 2020, the Company adopted the 2020 Equity Incentive Plan, making available for issuance up to 450,000 stock options. The options may be exercised at an exercise price per share based on the fair market value and determined on the date of grant and expire 10 years from the grant date. As of December 31, 2021, there were 422,550 shares available for grant under the 2020 Equity Incentive Plan.

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A summary of the status of the stock option plan and changes for the period is presented below:


	For the years ended December 31,
	2021							2020							2019
						Weighted						Weighted								Weighted
				Weighted		Average				Weighted		Average					Weighted		Average
				average		Remaining				average		Remaining					average		Remaining
				exercise		Contractual				exercise		Contractual					exercise		Contractual
	Shares			price		Life		Shares		price		Life		Shares			price		Life
Outstanding at beginning of year		495,195		$	29.93			541,414		$	26.65				648,311		$	20.74
Granted		121,000			40.45			101,700			37.77				101,350			32.81
Exercised		(127,871	)		23.56			(93,870	)		14.79				(191,497	)		9.24
Forfeited or expired		(23,600	)		38.88			(54,049	)		38.15				(16,750	)		34.01
Outstanding at end of year		464,724		$	33.97		6.6 years	495,195		$	29.93		6.4 years		541,414		$	26.65		6.3 years
Options exercisable at year-end		239,340		$	29.68		5.0 years	287,548		$	24.93		5.0 years		305,991		$	20.00		4.9 years
Weighted average fair value of options granted during the year				$	16.40					$	11.37						$	11.81
Shares available for grant		422,550						136,339							183,990

The aggregate intrinsic value (the difference between the Company’s closing stock price on the last trading day of the year and the exercise price, multiplied by the number of in-the-money options) of 464,724 and 495,570 stock options outstanding at December 31, 2021 and 2020 was $13.3 million and $3.7 million, respectively. The aggregate intrinsic value of 239,340 and 287,548 stock options exercisable at December 31, 2021 and 2020 was $7.9 million and $3.3 million, respectively.

The fair value of the option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The following assumptions were used for grants:


	2021			2020			2019
Dividend yield		-			-			-
Expected life		7 years			7 years			7 years
Expected volatility		38.48	%		25.51	%		28.21	%
Risk-free interest rate		.74	%		1.29	%		2.59	%

At December 31, 2021, there was $2.1 million of total unrecognized compensation cost related to nonvested stock option grants. The cost is expected to be recognized over a weighted-average period of 2.7 years. The fair value of stock option grants that vested during 2021, 2020, and 2019 was $1.1 million, $1.2 million and $1.2 million, respectively.

Restricted Stock Grants

On May 17, 2016, the Company adopted the 2016 Equity Incentive Plan which included a provision for the issuance of 50,000 shares of common stock to be issuable as restricted stock grants. The Plan expired on March 17, 2021 and no further shares may be issued from the plan.

On May 12, 2020, the Company adopted the 2020 Equity Incentive Plan which included a provision for the issuance of 450,000 shares of common stock to be issuable as either stock options or restricted stock grants. As of December 31, 2021, there were 422,550 shares available for grant under the 2020 Equity Incentive Plan.

Shares of restricted stock granted to employees under the stock plans are subject to restrictions as to continuous employment for a specified time period following the date of grant. During this period, the holder is entitled to full voting rights and dividends.

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A summary of the status of the Company’s nonvested restricted stock and changes for the years ended December 31, 2021, 2020, and 2019 is as follows:


	December 31,
	2021					2020					2019
				Weighted					Weighted					Weighted
				Average					Average					Average
	Restricted			Grant-Date		Restricted			Grant-Date		Restricted			Grant-Date
	Shares			Fair Value		Shares			Fair Value		Shares			Fair Value
Nonvested at beginning of year		26,099		$	38.05		32,825		$	34.78		29,625		$	34.00
Granted		26,450			48.56		13,200			39.87		14,700			33.64
Vested		(9,600	)		38.03		(14,051	)		32.06		(10,375	)		31.61
Forfeited		(1,250	)		38.56		(5,875	)		37.74		(1,125	)		28.03
Nonvested at end of year		41,699		$	44.71		26,099		$	38.05		32,825		$	34.78

At December 31, 2021, there was $1.4 million of total unrecognized compensation cost related to nonvested restricted stock grants. The cost is expected to be recognized over a weighted-average period of 3.0 years.