STOCK INCENTIVE PLAN

12 Months Ended

Dec. 31, 2020

Share-based Payment Arrangement [Abstract]

STOCK INCENTIVE PLAN

14. Stock Incentive Plan

We have two employee Stock Incentive Plans: the first plan, which was approved in 2010, has 300,000 (363,000 adjusted for two 10% stock dividends) shares reserved and the second plan, which was approved in 2020, has 300,000 shares reserved. No new options may be granted under the 2010 plan, as it expired on April 14, 2020. Under the 2020 plan, options are periodically granted to employees at a price not less than the fair market value of the shares at the date of grant. Employees become 20% vested after five years and then vest 20% each year until fully vested. The right to exercise each such 20% of the options is cumulative and will not expire until the tenth anniversary of the date of the grant. All employees are eligible to participate in the 2020 plan if the Executive/Long-Range Committee, in its sole discretion, determines that such person has contributed or can be expected to contribute to our profits or growth. With respect to Executive Officers, the Executive/ Long-Range Planning Committee will obtain approval from the Compensation Committee for any options granted to them.

Option awards are generally granted with an exercise price equal to the market price of the Company’s common stock at the date of grant. The fair value of each option award is estimated on the date of grant using a closed form option valuation (Black-Scholes) model that uses the assumptions noted in the table below. Expected volatilities are based on historical volatilities of our common stock. The expected term of the options granted shall not exceed ten years from the date of grant (the amount of time options granted are expected to be outstanding). The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of the grant.

The fair value of options granted was determined using the following weighted-average assumptions as of grant date:

	2020			2019			2018
Risk free interest rate		0.63	%		2.01	%		2.88	%
Expected life (in years)		7.5			7.5			7.5
Expected stock price volatility		32.90	%		33.13	%		33.69	%
Dividend yield		4.26	%		4.28	%		3.61	%

The following table presents a summary of the activity under the 2010 and 2020 Stock Incentive Plans for the years ended December 31:

	2020					2019					2018
	Shares			Weighted Average Exercise Price		Shares			Weighted Average Exercise Price		Shares			Weighted Average Exercise Price
Outstanding, January 1		86,097		$	12.92		102,760		$	11.89		117,191		$	10.79
Granted		145,750			15.31		6,250			18.92		11,275			18.23
Exercised		(19,298	)		9.39		(22,163	)		8.81		(24,056	)		8.96
Forfeited		(10,205	)		15.19		(750	)		18.92		(1,650	)		20.02
Outstanding, December 31		202,344		$	14.89		86,097		$	12.92		102,760		$	11.89
Exercisable at year end		21,113		$	9.77		27,459		$	9.03		32,219		$	8.81

Information for the 2010 Stock Incentive Plan has been retroactively adjusted for the 2018 10% stock dividend as applicable.

The following table presents information pertaining to options outstanding at December 31, 2020.

Exercise Price		Number of Options Outstanding		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price of Options Outstanding		Intrinsic Value of Options Outstanding		Number of Options Exercisable		Weighted Average Exercise Price of Options Exercisable		Intrinsic Value of Options Exercisable
$	8.61		12,136		0.50	$	8.61	$	104,491		12,135	$	8.61	$	97,440
$	9.18		3,811		1.50	$	9.18	$	34,985		3,049	$	9.18	$	22,741
$	9.92		605		1.75	$	9.92	$	6,002		484	$	9.92	$	3,252
$	12.26		3,992		3.58	$	12.26	$	48,942		1,597	$	12.26	$	6,992
$	12.40		2,057		3.00	$	12.40	$	25,507		1,234	$	12.40	$	5,232
$	13.05		13,068		4.33	$	13.05	$	170,537		2,614	$	13.05	$	9,380
$	14.54		5,500		5.25	$	14.54	$	79,970		—	$	14.54	$	—
$	15.21		130,750		9.33	$	15.21	$	1,988,708		—	$	15.21	$	—
$	16.73		10,000		9.33	$	16.73	$	167,300		—	$	16.73	$	—
$	18.23		10,450		7.25	$	18.23	$	190,504		—	$	18.23	$	—
$	19.00		2,750		6.16	$	19.00	$	52,250		—	$	19.00	$	—
$	19.82		7,225		6.09	$	19.82	$	143,200		—	$	19.82	$	—
			202,344		7.76	$	14.89	$	3,012,396		21,113	$	9.77	$	145,037

The total intrinsic value of options exercised during the years ended December 31, 2020, 2019, and 2018, was $139,837, $218,116 and $262,415, respectively.

We recognized compensation cost for the years ended December 31, 2020, 2019 and 2018 in the amount of $92,986, $78,053 and $72,408, respectively, related to the granted options.

As of December 31, 2020, there was a total of $401,582 in unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the Plan. The cost is expected to be recognized over a weighted average period of 5.95 years.