STOCK-BASED COMPENSATION

The Company has stock-based incentive arrangements to attract and retain key personnel. In May 2015, the 2015 Equity Compensation Plan (the “2015 plan”) was approved by shareholders, which authorizes the issuance of restricted stock, stock appreciation rights, stock units and stock options to the Board of Directors and key employees. Compensation expense for service-based awards is recognized over the vesting period. Performance-based awards are recognized based on a vesting schedule and the probability of achieving goals specified at the time of the grant. The 2015 plan replaced the 2005 Equity Compensation Plan.

Stock-based compensation expense totaled $329,000, $474,000 and $515,000 for the years ended December 31, 2019, 2018 and 2017, respectively, which consisted of grants of restricted stock and restricted stock units.

The Company has not granted any stock options since 2007 and all outstanding options expired on July 17, 2017. The fair value of the Company’s outstanding employee stock options was estimated on the date of grant using the Black-Scholes option pricing model. The Company estimated expected market price volatility and expected term of the options based on historical data and other factors. The exercise price for options granted is set at the discretion of the committee administering the Plan but is not less than the market value of the shares as of the date of grant. An option’s maximum term is 10 years and the options vest at the discretion of the committee.

The following tables below summarize option activity and outstanding and exercisable options at and for the year ended December 31, 2017.



(dollars in thousands, except per share amounts)	Shares		Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted-Average Contractual Life Remaining In Years
Outstanding at January 1, 2017	15,081		$	27.70	$	—	—
Exercised	(14,231	)	27.70		134		—
Expired	(350	)	27.70		—		—
Forfeited	(500	)	27.70		—		—

Outstanding at December 31, 2017	—		$	—	$	—	—

Exercisable at December 31, 2017	—		$	—	$	—	—

The Company has outstanding restricted stock in accordance with the Plan. As of December 31, 2019 and 2018, unrecognized stock compensation expense was $304,000 and $430,000, respectively. The following tables summarize the unvested restricted stock awards outstanding at December 31, 2019 and 2018 respectively.



	2019				2018				2017
	Number of Shares		Weighted Average Grant Date Fair Value		Number of Shares		Weighted Average Grant Date Fair Value		Number of Shares		Weighted Average Grant Date Fair Value
Nonvested at beginning of year	25,473		$	28.76	32,809		$	22.61	47,881		$	20.41
Granted	6,524		31.82		10,662		36.43		6,752		30.20
Vested	(17,557	)	25.83		(17,607	)	21.85		(21,738	)	20.13
Cancelled	—		—		(391	)	27.69		(86	)	20.75
Nonvested at end of year	14,440		$	25.79	25,473		$	28.76	32,809		$	22.61