Note 11. Stock-Based Compensation

Stock Option Plan

Greene County Bancorp, Inc. had a stock-based compensation plan (the “2008 Option Plan”) which allowed the Company to issue up to 360,000 options and stock appreciation rights. In 2008, the Board of Directors granted 329,000 options and stock appreciation rights (in tandem) to buy stock under the 2008 Option Plan at an exercise price of $6.25, the fair value of the stock on that date. These options had a 10-year term and vested over a three year period upon meeting specific earnings performance goals. During the year ended June 30, 2018, the remaining 37,770 options that were outstanding at June 30, 2017 were exercised. The total intrinsic value of the options exercised during the year ended June 30, 2018 was approximately $997,000. The 2008 Option Plan expired in August 2019 and no new plans have been approved by the Board of Directors.

Phantom Stock Option Plan and Long-term Incentive Plan

The Greene County Bancorp, Inc. 2011 Phantom Stock Option and Long-term Incentive Plan (the “Plan”) was adopted effective July 1, 2011, to promote the long-term financial success of the Company and its subsidiaries by providing a means to attract, retain and reward individuals who contribute to such success and to further align their interests with those of the Company’s shareholders. At June 30, 2019 and 2018, the Plan had 5,800,000 options authorized, respectively, of which, 4,159,882 and 3,567,182 options had been granted to date, respectively. The Plan is intended to provide benefits to employees and directors of the Company or any subsidiary as designated by the Compensation Committee of the Board of Directors of the Company (“Committee”). A phantom stock option represents the right to receive a cash payment on the date the award vests. The participant receives an amount equal to the positive difference between the strike price on the grant date and the book value of a share of the Company stock on the determination date, which is the last day of the plan year that is the end of the third plan year after the grant date of the award, unless otherwise specified by the Committee. The strike price will be the price established by the Committee, which will not be less than 100% of the book value of a share on a specified date, as determined under generally accepted accounting principles (GAAP) as of the last day of the quarter ending on or immediately preceding the valuation date with adjustments made, in the sole discretion of the Committee, to exclude accumulated other comprehensive income (loss). The liability for the phantom stock option plan is re-measured at each reporting period based on the difference between the strike price and the current period end book value per share of the Company’s common stock, excluding accumulated other comprehensive income (loss).

A summary of the Company’s phantom stock option activity and related information for its option plan for the years ended June 30, 2019 and 2018 is as follows:

	2019			2018
Number of options outstanding at beginning of year		1,634,160			1,522,720
Options granted		592,700			594,200
Options forfeited		(12,500	)		(27,000	)
Options paid in cash upon vesting		(502,760	)		(455,760	)
Number of options outstanding at period end		1,711,600			1,634,160

(In thousands)	2019		2018
Cash paid out on options vested	$	1,745	$	1,187
Compensation expense recognized		2,901		2,140

The total liability for the long-term incentive plan was $4.1 million and $3.0 million at June 30, 2019 and 2018, respectively, and is included in accrued expenses and other liabilities.