NOTE 12 Share-Based Compensation

The Company has granted equity awards pursuant to the Alerus Financial Corporation 2009 Stock Plan. The awards can be in the form of restricted stock or restricted stock units and are considered to represent an element of employee compensation. Compensation expense for the award is based on the fair value of Alerus Financial Corporation common stock at the time of grant. The value of awards that are expected to vest, are amortized into expense over the vesting periods. The ability to grant awards under this plan have expired. Compensation expense relating to awards under this plan was $1.2 million and $702 thousand for the nine months ending September 30, 2019 and September 30, 2018, respectively.

The following table presents the activity in the stock plan for the nine months ended September 30, 2019 and 2018:


	Nine months ended September 30, 2019			Nine months ended September 30, 2018
		Weighted-			Weighted-
		Average Grant			Average Grant
	Awards	Date Fair Value		Awards	Date Fair Value
Restricted Stock Awards
Outstanding at beginning of period	337,014	$	18.36	336,397	$	15.38
Granted	70,617		19.87	76,031		22.67
Vested	(53,882)		18.69	(76,753)		10.56
Forfeited or cancelled	(6,138)		17.34	—		—
Outstanding at end of period	347,611	$	18.64	335,675	$	18.13

As of September 30, 2019, there was $3.6 million of unrecognized compensation expense related to non-vested restricted stock awards granted under the plan. The expense is expected to be recognized over a weighted-average period of 3.29 years.

On May 6, 2019, the Company’s stockholders approved the Alerus Financial Corporation 2019 Equity Incentive Plan. This plan allows the compensation committee the ability to grant a wide variety of equity awards, including stock options, stock appreciation rights, restricted stock, restricted stock units and cash incentive awards in such forms and amounts as it deems appropriate to accomplish the goals of the plan. Any shares subject to an award that is cancelled, forfeited, or expires prior to exercise or realization, either in full or in part, shall again become available for issuance under the plan. However, shares subject to an award shall not again be made available for issuance or delivery under the plan if such shares are (a) tendered in payment of the exercise price of a stock option, (b) delivered to, or withheld by, the Company to satisfy any tax withholding obligation, or (c) covered by a stock‑settled stock appreciation right or other awards that were not issued upon the settlement of the award. Shares vest, become exercisable and contain such other terms and conditions as determined by the compensation committee and set forth in individual agreements with the participant receiving the award. The plan is authorized to issue up to 1,100,000. As of September 30, 2019, no awards had been issued under the plan

For the nine months ended September 30, 2019, the Company issued 13,144 shares of common stock pursuant to the Alerus Financial Corporation Stock Grant Plan for Non‑Employee Directors. Compensation expense relating to stock awards under this plan for the nine months ending September 30, 2019 and 2018, was $251 thousand and $245 thousand respectively.