NOTE 15: Share-Based Plans

On April 16, 2013, the Corporation’s shareholders approved the C&F Financial Corporation 2013 Stock and Incentive Compensation Plan (the 2013 Plan) for the grant of equity awards to certain key employees of the Corporation, as well as non-employee directors (including non-employee regional or advisory directors). The 2013 Plan authorizes the Corporation to issue equity awards in the form of stock options, tandem stock appreciation rights, restricted stock, restricted stock units and/or other stock-based awards. Since the 2013 Plan’s approval, equity awards have only been issued in the form of restricted stock.

Prior to the approval of the 2013 Plan, the Corporation granted equity awards under the Amended and Restated C&F Financial Corporation 2004 Incentive Stock Plan (the Amended 2004 Plan). The Amended 2004 Plan authorized the Corporation to issue equity awards in the form of stock options, stock appreciation rights, restricted stock and/or restricted stock units to key employees and non-employee directors. Since 2006, all equity awards that were issued under the Amended 2004 Plan were in the form of restricted stock, which were accounted for using the fair market value of the Corporation’s common stock on the date the restricted shares are awarded. Stock options issued under the Amended 2004 Plan prior to 2006 were issued to employees at an exercise price equal to the fair market value of the Corporation’s common stock on the date granted. As of December 31, 2017, there were no remaining outstanding stock options for the Corporation’s common stock and none were granted in 2018 or 2019. Stock option transactions under the various plans for the periods indicated were as follows:


	2017
		Weighted-
		Average
		Exercise
(Dollars in thousands, except for per share amounts)	Shares	Price
Outstanding at beginning of year	2,250	$	37.17
Granted	—		—
Exercised	(2,250)		37.17
Cancelled	—		—
Outstanding and exercisable at end of year	—		—

As permitted under the 2013 Plan and Amended 2004 Plan, the Corporation awards shares of restricted stock to certain key employees and non-employee directors. Restricted shares awarded to employees generally vest on the fifth anniversary of the grant date and restricted shares awarded to non-employee directors generally vest on the third anniversary of the grant date. A summary of the activity for restricted stock awards for the periods indicated is presented below:


	2019			2018			2017
		Weighted-			Weighted-			Weighted-
		Average			Average			Average
		Grant Date			Grant Date			Grant Date
	Shares	Fair Value		Shares	Fair Value		Shares	Fair Value
Nonvested at beginning of year	139,455	$	45.75	137,880	$	43.52	141,755	$	39.77
Granted	36,115		53.75	30,185		52.82	29,625		52.73
Vested	(32,155)		40.69	(26,450)		42.41	(31,810)		35.42
Cancelled	(1,395)		51.05	(2,160)		42.54	(1,690)		43.16
Nonvested at end of year	142,020		48.88	139,455		45.75	137,880		43.52

Compensation is accounted for using the fair value of the Corporation’s common stock on the date the restricted shares are awarded. Compensation expense is charged to income ratably over the required service periods, and was $1.47 million in 2019, $1.35 million in 2018 and $1.45 million in 2017. As of December 31, 2019, there was $3.33 million of total unrecognized compensation cost related to restricted stock granted under the 2013 Plan. This amount is expected to be recognized through 2024.