In February 2020, the Board of Directors, with subsequent approval of the Corporation’s shareholders, approved the adoption of the 2020 Incentive Compensation Plan. All remaining shares available for grant under the 2017 Incentive Compensation Plan were rolled into the 2020 Plan. As of December 31, 2022, approximately 8.9 million shares remained available for grant under the 2020 Plan.

Under the 2020 Plan, options are generally exercisable up to ten years from the date of grant, have an exercise price that is equal to the closing price of the Corporation’s stock on the grant date, and vest ratably over four years.

The Corporation also issues restricted stock awards under the 2020 Plan. The shares of restricted stock are restricted as to transfer, but are not restricted as to dividend payment or voting rights. Restricted stock units receive dividend equivalents but

do not have voting rights. The transfer restrictions lapse over three years or four years, depending upon whether the awards are performance-based or service-based. Performance-based awards are based on earnings per share performance goals, relative total shareholder return, and continued employment or meeting the requirements for retirement, and service-based awards are contingent upon continued employment or meeting the requirements for retirement. Performance-based restricted stock awards granted during 2021 and 2022 will cliff-vest after the three year performance period has ended. Service-based restricted stock awards granted during 2021 and 2022 will vest ratably over four years.

The 2020 Plan provides that restricted stock awards and stock options will immediately become fully vested upon retirement from the Corporation of retirement eligible colleagues. See Note 1 for the Corporation’s accounting policy for stock based compensation.

The fair values of stock options and restricted stock awards are amortized as compensation expense on a straight-line basis over the vesting period of the grants. For colleagues who meet the definition of retirement eligible under the 2017 Plan and the 2020 Plan, expenses related to stock options and restricted stock awards are fully recognized on the date the colleague meets the definition of normal or early retirement. Compensation expense recognized is included in personnel expense on the consolidated statements of income.

Performance awards are based on performance goals of earnings per share and total shareholder return with vesting ranging from a minimum of 0% to a maximum of 150% of the target award. Performance awards are valued utilizing a Monte Carlo simulation model to estimate fair value of the awards at the grant date.

Assumptions are used in estimating the fair value of stock options granted. The weighted average expected life of the stock option represents the period of time that stock options are expected to be outstanding and is estimated using historical data of stock option exercises and forfeitures. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. The expected volatility is based on the implied volatility of the Corporation’s stock. The Corporation did not grant stock options during 2022 or 2021.

The following assumptions were used in estimating the fair value for options granted in 2020:


	2020
Dividend yield	3.50	%
Risk-free interest rate	1.60	%
Weighted average expected volatility	21.00	%
Weighted average expected life	5.75 years
Weighted average per share fair value of options	$2.39

A summary of the Corporation’s stock option activity for the year ended December 31, 2022 is presented below:


Stock Options	Shares(a)	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value(a)









Outstanding at December 31, 2021	4,814	$	20.72	5.96 years	$	12,532


Exercised	663	18.27
Forfeited or expired	157	22.33
Outstanding at December 31, 2022	3,994	$	21.06	5.11 years	$	10,525
Options exercisable at December 31, 2022	3,435	$	21.40	4.82 years	$	8,223

Intrinsic value represents the amount by which the fair market value of the underlying stock exceeds the exercise price of the stock option. For the years ended December 31, 2022, 2021, and 2020, the intrinsic value of stock options exercised was $4 million, $9 million, and approximately $816,000, respectively. The total fair value of stock options that vested was $2 million for the year ended December 31, 2022, $4 million for the year ended December 31, 2021, and $4 million for the year ended December 31, 2020.

For the years ended December 31, 2022, 2021, and 2020, the Corporation recognized compensation expense of approximately $710,000, $1 million, and $4 million, respectively, for the vesting of stock options. Compensation expense for 2022 related to the accelerated vesting of stock options granted to retirement eligible colleagues was immaterial. At December 31, 2022, the Corporation had approximately $378,000 of unrecognized compensation expense related to stock options that is expected to be recognized over the remaining requisite service periods that extend predominantly through the first quarter of 2024.

The following table summarizes information about the Corporation’s restricted stock activity for the year ended December 31, 2022:


Restricted Stock	Shares(a)	Weighted Average Grant Date Fair Value








Outstanding at December 31, 2021	2,635	$	19.87
Granted	800	22.90
Vested	968	21.81
Forfeited	164	20.43
Outstanding at December 31, 2022	2,303	$	20.92

The Corporation amortizes the expense related to restricted stock awards as compensation expense over the vesting period specified in the grant's award agreement. Expense for restricted stock awards of $16 million was recorded for the year ended December 31, 2022, $15 million for the year ended December 31, 2021 and $17 million for the year ended December 31, 2020. Included in compensation expense for 2022 was $4 million of expense for the accelerated vesting of restricted stock awards granted to retirement eligible colleagues. The Corporation had $21 million of unrecognized compensation costs related to restricted stock awards at December 31, 2022 that are expected to be recognized over the remaining requisite service periods that extend predominantly through the first quarter of 2026.

The Corporation has the ability to issue shares from treasury or new shares upon the exercise of stock options or the granting of restricted stock awards. As described in Note 10, the Board of Directors has authorized management to repurchase shares of the Corporation’s common stock in the market, to be made available for issuance in connection with the Corporation’s employee incentive plans and for other corporate purposes. The repurchase of shares, if any, will be based on market and investment opportunities, capital levels, growth prospects, and regulatory constraints. Such repurchases may occur from time to time in open market purchases, block transactions, private transactions, accelerated share repurchase programs, or similar facilities.