EMPLOYEE STOCK PLANS

The Company awards its employees and directors various forms of share-based incentives under certain plans approved by its shareholders. Awards granted under the plans may be in the form of qualified or nonqualified stock options, restricted stock, restricted stock units, long-term incentive compensation units consisting of cash and common stock, or any combination thereof within the limitations set forth in the plans. The plans provide that the aggregate number of shares of the Company’s common stock which may be subject to award may not exceed 560,000 subject to adjustment in certain circumstances to prevent dilution. At December 31, 2018 , there were 522,156 shares available to be issued under the plans.

Stock Options – The 75,826 options outstanding at December 31, 2018 were all issued under the plans and are incentive stock options with a term of ten years, vesting 20% each year on the anniversary date of the grant. The following table summarizes activity relating to stock options:



	Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value $(000)
Outstanding at December 31, 2016	298,995		$	13.90
Granted	—		—
Exercised	(20,499	)	12.97			$	58
Forfeited or expired	(90,221	)	13.62
Outstanding at December 31, 2017	188,275		$	14.14
Granted	—		—
Exercised	(49,532	)	12.97			$	86
Forfeited or expired	(62,917	)	15.27
Outstanding at December 31, 2018	75,826		$	13.97	3.83
Exercisable at December 31, 2017	176,024		13.92
Exercisable at December 31, 2018	75,826		13.97		3.83

A summary of changes in unvested options for the period ended December 31, 2018 is as follows:



	Number of Options		Weighted Average Grant Date Fair Value
Unvested options outstanding, beginning of year	20,256		$	4.97
Vested	(5,255	)	5.59
Forfeited	(15,001	)	4.76
Unvested options outstanding, end of year	—		$	—

As of December 31, 2018 there was no unrecognized compensation cost related to nonvested stock option grants due to all stock option grants being fully vested as of year-end. The forfeiture benefit net of options expense recognized for the year ended December 31, 2018 was $166,000. The total amount of options expensed during the year ended December 31, 2017 was $58,000.

Restricted Stock Awards and Restricted Stock Units – During 2018 and 2017, the Compensation Committee of the Board of Directors of the Company made restricted stock grants under the plans. The restricted shares of stock are subject to the terms of a Restricted Stock Grant Agreement between the Company and each recipient. Prior to vesting, the recipient will be entitled to vote the shares and receive dividends or dividends will accrue and paid at vesting, if any, declared by the Company with respect to its common stock. Compensation expense for restricted stock is based on the fair value of the restricted stock awards at the time of the grant, which is equal to the market value of the Company’s common stock on the date of grant. The value of the restricted stock grants that are expected to vest is amortized monthly into compensation expense over the vesting period of one to five years.

For the year ended December 31, 2018 and 2017, compensation expense of $185,000 and $105,000 , respectively, was recognized related to non-vested restricted stock awards and restricted stock units. As of December 31, 2018, there was $809,000 of unrecognized compensation cost related to non-vested restricted stock and restricted stock units awards granted under the plan. The unrecognized compensation cost related to restricted stock awards at December 31, 2018 is expected to be recognized over a weighted-average period of 4.2 years.

The following table summarizes activity relating to non-vested restricted stock awards and restricted stock units:



	Number of Shares		Weighted-Average Grant Date Fair Value
Restricted stock awards
Non-vested at December 31, 2016	14,764		$	13.03
Granted	48,526		13.98
Forfeited	(4,500	)	13.92
Vested	(700	)	13.92
Non-vested at December 31, 2017	58,090		$	13.74
Granted	84,998		13.89
Forfeited	(43,197	)	13.85
Vested	(2,750	)	13.92
Non-vested at December 31, 2018	97,141		13.80

Restricted stock units
Non-vested at December 31, 2017	—		$	—
Granted	26,075		13.94
Forfeited	(3,540	)	13.98
Vested	—		—
Non-vested at December 31, 2018	22,535		13.93