Stock Option Plan and Restricted Stock Plan

6 Months Ended

Jun. 30, 2019

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock Option Plan and Restricted Stock Plan

Note 10 – Stock Option Plan and Restricted Stock Plan

The Company grants incentive stock options for a fixed number of shares with an exercise price equal to the fair value of the shares at the date of grant to employees. On June 26, 2019, the Company granted 398,850 incentive stock options with an exercise price of $29.70 per share. The fair value of the options was $7.31 per option and was estimated using the Black-Scholes options pricing model with the following weighted average assumptions: risk free interest rate of 1.83%; expected dividend yield of 1.62%; expected life of 6.64 years; and expected volatility of 26.69%. No options were granted in 2018.

The Company recorded stock option expense totaling $313,000 and $377,000 for the three-month periods ended June 30, 2019 and 2018, respectively. The Company recorded stock option expense totaling $625,000 and $754,000 for the six months ended June 30, 2019 and 2018, respectively. The additional disclosure requirements under authoritative accounting guidance have been omitted due to the amounts being insignificant.

On April 25, 2017, upon re-election of existing directors, 29,300 restricted shares with a total value of $600,000 were granted to the ten non-employee directors and were expensed over the period from the grant date to April 24, 2018, the date of the next annual shareholders’ meeting at which these directors’ term expired. On April 24, 2018, upon re-election of nine of the existing directors, 21,420 restricted shares with a total value of $540,000 were granted to these non-employee directors and were expensed over the period from grant date to April 23, 2019, the date of the next annual shareholders’ meeting at which the directors’ term expired. On April 23, 2019, upon re-election of nine of the existing directors and two new directors, 21,714 restricted shares with a total value of $660,000 were granted to these non-employee directors and will be expensed over the period from the grant date to April 28, 2020, the Company’s next annual shareholders’ meeting at which the directors’ term expires. The Company recorded director expense related to these restricted share grants of $135,000 and $140,000 for the three-month periods ended June 30, 2019 and 2018, respectively. The Company recorded director expense related to these restricted stock grants of $270,000 and $290,000 for the six months ended June 30, 2019 and 2018, respectively.

On October 27, 2015, the Company granted 62,546 restricted shares with a total value of $1,060,000 to certain officers that was expensed over the vesting period of three years. On October 25, 2016, the Company granted 30,810 restricted stock shares with a total value of $560,000 to certain officers that is being expensed over the vesting period of three years. On October 24, 2017, the Company granted 28,382 restricted shares with a total value of $655,000 to certain officers that is being expensed over the vesting period of one to three years. On October 23, 2018, the Company granted 52,042 restricted shares with a total value of $1,440,000 to certain officers that will be expensed over a three-year vesting period. On June 26, 2019, the Company granted 25,818 restricted shares with a total value of $766,000 to certain officers that is being expensed over the vesting period of three years. The Company recorded restricted stock expense for officers of $210,000 and $158,000 for the three-month periods ended June 30, 2019 and 2018, respectively. The Company recorded restricted stock expense for officers of $415,000 and $326,000 for the six-month periods ended June 30, 2019 and 2018, respectively.