STOCK- BASED COMPENSATION

9 Months Ended

Sep. 30, 2019

Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]

STOCK-BASED COMPENSATION

2.      STOCK-BASED COMPENSATION

In 2004, the Company’s Board of Directors adopted a stock option plan that authorized the reservation of up to 302,500 shares of common stock and provided for the granting of stock options to certain directors, officers and employees. The 2010 Stock Awards and Incentive Plan (the “2010 Plan”) was approved by the Company’s Board of Directors in January 2010 and approved by the stockholders at the Annual Stockholder Meeting in April 2010. The 2010 Plan authorized the reservation of an additional 700,000 shares of common stock for the granting of stock awards. The options granted to officers and employees are incentive stock options and the options granted to non-employee directors are non-qualified stock options. The purpose of the plan is to afford key employees an incentive to remain in the employment of

Southern National and to assist in attracting and retaining of non-employee directors by affording them an opportunity to share in Southern National’s anticipated future success. Under the plan, the option’s price cannot be less than the fair market value of the stock on the grant date. The maximum term of the options is ten years and options granted may be subject to a graded vesting schedule.

At the June 21, 2017 Annual Meeting of Stockholders of Southern National, the 2017 Equity Compensation Plan (the “2017 Plan”) was approved as recommended by the Board of Directors. The 2017 Plan replaced the 2010 Plan and has a maximum number of 750,000 shares reserved for issuance. The purpose of the 2017 Plan is to promote the success of the Company by providing greater incentive to employees, non-employee directors, consultants and advisors to associate their personal interests with the long-term financial success of the Company, including its subsidiaries, and with growth in stockholder value, consistent with the Company’s risk management practices. Because the 2017 Plan was approved, shares under the 2004 stock-option plan or 2010 Plan will no longer be awarded.

A summary of the activity in the stock option plan during the nine months ended September 30, 2019 follows:

				Weighted
		Weighted		Average	Aggregate
		Average		Remaining	Intrinsic
		Exercise		Contractual	Value
	Shares	Price		Term	(in thousands)
Options outstanding, beginning of period	642,350	$	9.77	5.0	$	2,219
Forfeited	(2,700)		10.52
Exercised	(73,900)		8.20
Options outstanding, end of period	565,750	$	9.97	4.5	$	3,068
Exercisable at end of period	565,750	$	9.11	3.8	$	2,552

Stock-based compensation expense associated with stock options was $12 thousand and $21 thousand for the three months ended September 30, 2019 and 2018, respectively, and $55 thousand and $99 thousand for the nine months ended September 30, 2019 and 2018, respectively. As of September 30, 2019, unrecognized compensation expense associated with stock options was $38 thousand, which is expected to be recognized over a weighted average period of 1.5 years.

As of September 30, 2019, 48,500 shares of restricted stock were granted at a weighted average exercise price of $14.15 to certain officers of Southern National under the 2017 Plan and are subject to vesting in five years. These shares are included as shares outstanding at September 30, 2019 in the consolidated balance sheet. As of September 30, 2019, 2,700 shares of restricted stock granted to certain officers of Southern National under the 2017 Plan were forfeited. Restricted stock compensation expense totaled $73 thousand and $137 thousand for the three months ended September 30, 2019 and 2018, respectively, and $297 thousand and $228 thousand for the nine months ended September 30, 2019 and 2018, respectively. As of September 30, 2019, unrecognized compensation expense associated with restricted stock was $1.2 million, which is expected to be recognized over a weighted average period of 4.0 years.