Under the Randolph Bancorp, Inc. 2017 Stock Option and Incentive Plan (the “2017 Equity Plan”), the Company may grant options, restricted stock, restricted units or performance awards to its directors, officers and employees. Both incentive stock options and nonqualified stock options may be granted under the 2017 Equity Plan with 586,872 shares initially reserved for options. Any options forfeited because vesting requirements are not met or expired will become available for re-issuance under the 2017 Equity Plan. The exercise price of each option equals the market price of the Company’s stock on the date of the grant and the maximum term of each option is 10 years. The total number of shares initially reserved for restricted stock is 234,749. Options and awards generally vest ratably over three to five years. The fair value of shares awarded is based on the market price at the date of grant.

In addition, the Company granted 15,000 shares of restricted stock and 44,118 options in 2020 as an inducement for senior executives to accept employment (the “2020 Inducement Plan”). The inducement awards and options vest ratably over five years. The fair value of shares awarded is based on the market price at the date of grant.

At the 2021 Annual Meeting of Shareholders held on May 24, 2021, the Company’s shareholders approved the 2021 Equity Incentive Plan (the “2021 Equity Plan”). The 2021 Equity Plan permits equity awards to employees and directors in the form of stock options, restricted stock and other forms of compensation. The maximum number of shares of common stock that may be issued under the 2021 Equity Plan is 100,000. On August 13, 2021, the Company granted 18,000 performance-based restricted stock unit awards to certain senior level employees. These performance-based restricted stock unit awards were issued from the 2021 Equity Plan and were determined to have a grant fair value per share of $20.15. The number of stock units to be vested is contingent upon the Company’s attainment of certain performance criteria to be measured at the end of a three-year performance period, ending December 31, 2023. The awards will vest upon the earlier of the date on which it is determined if the performance goal is achieved subsequent to the performance period or April 15, 2024. Also on August 13, 2021, the Company granted 19,750 restricted stock awards to certain senior level employees and members of the Board of Directors. These restricted stock awards were issued from the 2021 Equity Plan and were determined to have a grant fair value per share of $20.15. The shares vest ratably over a three-year period.

The fair value of each option grant is estimated on the date of the grant using the Black-Scholes option-pricing model with the following assumptions:

During the three months ended March 31, 2022 and 2021, the Company made the following grants of options to purchase shares of common stock and used the following assumptions in measuring the fair value of such grants:

	2022		2021
Options granted		—		40,491
Vesting period (years)		—		5
Expiration period (years)		—		10
Expected volatility		—		30.98	%
Expected life (years)		—		6.2
Expected dividend yield		—		—
Risk free interest rate		—		0.64	%
Option fair value		—	$	6.20

A summary of stock option activity for the three months ended March 31, 2022 is presented in the table below:

Options	Stock Option Grants			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
Balance at January 1, 2022		599,383		$	13.80		8.50	$	—
Exercised		(129,437	)		14.38
Forfeited		(18,247	)		16.26
Balance at March 31, 2022		451,699		$	13.53		7.75	$	5,817,936
Exercisable at March 31, 2022		177,546		$	14.61		7.00	$	2,095,529
Unrecognized compensation cost (inclusive of directors' options)	$	885,607
Weighted average remaining recognition period (years)		2.13

For the three months ended March 31, 2022 and 2021 stock-based compensation expense applicable to stock options was $93,000 and $142,000, respectively.

Shares issued may be either authorized but unissued shares or reacquired shares held by the Company. Any shares forfeited because vesting requirements are not met will become available for reissuance under the Equity Plan. The fair market value of shares awarded, based on the market price at the date of grant, is amortized over the applicable vesting period. Restricted stock awarded to date has been at no cost to the awardee. The following table presents the activity in restricted stock awards under the Equity Plan for the three months ended March 31, 2022:

	Restricted Stock Awards			Weighted Average Grant Price		Performance-Based Restricted Stock Units⁽¹⁾		Weighted Average Grant Price		Total Restricted Stock Awards and Performance-Based Restricted Stock Units			Weighted Average Grant Price
Restricted stock awards at January 1, 2022		99,485		$	13.93		18,000	$	20.15		117,485		$	14.89
Vested		(4,614	)		14.36		—		—		(4,614	)		14.36
Forfeited		(704	)		11.48		—		—		(704	)		11.48
Restricted stock awards at March 31, 2022		94,167		$	13.93		18,000	$	20.15		112,167		$	14.93
Unrecognized compensation cost	$	957,628				$	276,944			$	1,234,572
Weighted average remaining recognition period (years)		2.39					2.04				2.33

For the three months ended March 31, 2022 and 2021 stock-based compensation expense applicable to restricted stock and performance-based restricted stock units was $191,000 and $125,000, respectively.