Arrow has established three stock-based compensation plans: a Long Term Incentive Plan, an Employee Stock Purchase Plan (ESPP) and an Employee Stock Ownership Plan (ESOP). When applicable, share and per share data have been adjusted for the September 26, 2023 3% stock dividend.

The Long Term Incentive Plan provides for the grant of incentive stock options, non-qualified stock options, restricted stock, restricted stock units, performance units and performance shares. The Compensation Committee of the Board of Directors administers the Long Term Incentive Plan.

Restricted Stock Awards - From time to time, the Company grants restricted stock awards which will generally vest over a four-year period. Unvested restricted stock will generally be forfeited if the recipient ceases to be employed by the Company, with limited exceptions. Grantees of restricted stock awards are entitled to receive all dividends and distributions declared and paid on restricted stock, or cash payments equivalent to such dividends or distributions, including those declared and paid during the vesting period.


	Restricted Stock Awards	Weighted Average Grant Date Fair Value

Outstanding at January 1, 2025	21,818	24.54

Granted	43,250	27.50
Vested	(11,504)	25.68
Forfeited	—	—
Outstanding at December 31, 2025	53,564	26.68


	2025
Restricted Stock Awards Granted	43,250
Weighted Average Grant Date Information:
Fair Value of Awards Granted	$	27.50

Total Grant Date Fair Value of Awards Granted in Period	$	1,189
Total Fair Value of Awards Vested in Period	$	300
Amount Expensed During the Year	$	546
Compensation Costs for Non-vested Awards Not Yet Recognized	$	1,099
Weighted Average Expected Vesting Period, In Years	2.78

Stock Options - Options may be granted at a price no less than the greater of the par value or fair market value of such shares on the date on which such option is granted, and generally expire ten years from the date of grant. The options usually vest over a four-year period. The Company did not grant stock options in 2025 or 2024.


	Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value
Outstanding at January 1, 2025	246,453	$	29.50
Granted	—	$	—
Exercised	(10,813)	$	23.74
Forfeited	(6,485)	$	27.37
Outstanding at December 31, 2025	229,155	$	29.83	3.69	$	486
Vested at Period-End	204,615	$	29.55	3.32	$	484
Expected to Vest	24,540	$	32.15	6.78	$	2


	Exercise Price Ranges
	$19.99 to $20.41		$27.04 to $27.47		$30.26		$31.34 to $33.78		Total
Outstanding at December 31, 2025
Number of Stock Options Outstanding	7,608		81,059		27,687		112,801		229,155
Weighted-Average Remaining Contractual Life (in years)	0.07		2.81		0.91		5.25		3.69
Weighted-Average Exercise Price	$	20.41	$	27.27	$	30.26	$	32.20	$	29.83

Vested at December 31, 2025
Number of Stock Options Outstanding	7,608		81,059		27,687		88,261		204,615
Weighted-Average Remaining Contractual Life (in years)	0.07		2.81		0.91		4.82		3.32
Weighted-Average Exercise Price	$	20.41	$	27.27	$	30.26	$	32.21	$	29.55


	2025			2024			2023
Stock Options Granted	—			—			57,680
Weighted Average Grant Date Information:
Fair Value of Options Granted	$	—		$	—		$	7.78
Fair Value Assumptions:
Dividend Yield	—		%	—		%	3.30		%
Expected Volatility	—		%	—		%	28.38		%
Risk Free Interest Rate	—		%	—		%	3.57		%
Expected Lives (in years)	0			0			8.34

Amount Expensed During the Year	$	104		$	197		$	284
Compensation Costs for Non-vested Awards Not Yet Recognized	68			201			536
Weighted Average Expected Vesting Period, In Years	1.04			1.77			2.29
Proceeds From Stock Options Exercised	$	256		$	433		$	96
Tax Benefits Related to Stock Options Exercised	120			34			11
Intrinsic Value of Stock Options Exercised	65			115			34

Restricted Stock Units - Historically, the Company has granted restricted stock units which gives the recipient the right to receive shares of Company stock upon vesting. The fair value of each restricted stock unit is the market value of Company stock on the date of grant. Restricted stock units vested over three years from the grant date. Once vested, the restricted stock units are no longer forfeitable. Vested units settle upon retirement of the recipient. Unvested restricted stock units generally forfeit if the recipient ceases to be employed by the Company, with limited exceptions. The Company did not grant restricted stock units in 2025.

There were no grants or vestings of restricted stock units for the years ended December 31, 2025 or 2024. The following table summarizes the activity for the year ended December 31, 2023.


	Restricted Stock Units	Weighted Average Grant Date Fair Value












Non-vested at January 1, 2023	13,925	$	30.47
Granted	5,164	31.47
Vested	(19,089)	30.74

Non-vested at December 31, 2023	—	—

There was no expense related to restricted stock units awarded pursuant to the Long Term Incentive Plan for the years ended December 31, 2025 or 2024. During the year ended December 31, 2023, the Company recorded expense of $321 thousand related to restricted stock units.

In April 2023, Arrow suspended the operation of the ESPP as a result of the now resolved delay in filing the 2022 Form 10-K and the 2023 Q1 Form 10-Q and the related effects under applicable securities laws. In October 2023, the Board of Directors approved the adoption of the 2023 ESPP, which is intended to satisfy the requirements of Section 423 of the Internal Revenue Code. Under this plan, the amount of the discount is 10%. Arrow previously sponsored an ESPP under which employees purchased Arrow's common stock at a 5% discount below market price. Under current accounting guidance, a stock purchase plan with a discount of 5% or less is not considered a compensatory plan. The new qualified 2023 ESPP was approved by Arrow shareholders at the 2024 annual meeting of shareholders.

Arrow maintains a director stock plan, pursuant to which a portion of the directors’ fees, as determined by the Board in its sole discretion, is paid to the directors in shares of Company common stock, as opposed to cash or any other form of compensation, subject to applicable law. Each director may elect to receive a greater amount or percentage of his or her directors’ fees payable in common stock from the portion that would otherwise have been payable in cash to the director.

Arrow maintains an employee stock ownership plan. Substantially all employees of Arrow and its subsidiaries are eligible to participate upon satisfaction of applicable service requirements. The Company makes voluntary cash contributions to the Plan each year.