NOTE 13.         EMPLOYEE AND DIRECTOR BENEFITS

The Company has a stock incentive plan, which is described below. The compensation cost that has been charged against income for the plan was approximately $1.9 million, $1.3 million and $1.1 million for the years ended December 31, 2021, 2020 and 2019, respectively.

Stock Incentive Plan

On March 23, 2009, the Company’s board of directors adopted the 2009 Stock Incentive Plan (the “Plan”), which was effective upon approval by the stockholders at the 2009 Annual Meeting of Stockholders. The 2009 Plan originally permitted the grant of up to 2,550,000 shares of common stock. However, upon stockholder approval during 2014, the Plan was amended in order to allow the Company to grant stock options for up to 5,550,000 shares of common stock. The Plan authorizes the grant of stock appreciation rights, restricted stock, incentive stock options, non-qualified stock options, non-stock share equivalents, performance shares or performance units and other equity-based awards. Option awards are generally granted with an exercise price equal to the estimated fair market value of the Company’s stock at the date of grant.

As of December 31, 2021, there are a total of 3,140,562 shares available to be granted under the Plan.

Stock-based compensation expense for stock-based awards is based on the grant-date fair value. For stock option awards, the fair value is estimated at the date of grant using the Black-Scholes-Merton valuation model. This model requires the input of highly subjective assumptions, changes to which can materially affect the fair value estimate. The fair value of each option granted is estimated on the date of grant using the Black-Scholes-Merton model based on the weighted-average assumptions for expected dividend yield, expected stock price volatility, risk-free interest rate and expected life of options granted.

There were no grants of stock options during the years ended December 31, 2021 and 2020. The assumptions used in determining the fair value of 2019 stock option awards were as follows:

The weighted average grant-date fair value of options granted during the year ended December 31, 2019 was $12.40.

The following tables summarize stock option activity:

Exercisable options at December 31, 2021 were as follows:

As of December 31, 2021, there was $393,000 of total unrecognized compensation cost related to non-vested stock options. As of December 31, 2021, non-vested stock options had a weighted average remaining time to vest of 1.6 years.

Restricted Stock and Performance Shares

The Company periodically grants restricted stock awards that vest upon service conditions. Dividend payments are made during the vesting period. The value of restricted stock is determined to be the current value of the Company’s stock, and this total value will be recognized as compensation expense over the vesting period. As of December 31, 2021, there was $2.8 million of total unrecognized compensation cost related to non-vested restricted stock. As of December 31, 2021, non-vested restricted stock had a weighted average remaining time to vest of 2.0 years.

The Company periodically grants performance shares that give plan participants the opportunity to earn between 0% and 150% of the target number of performance shares granted based on the relative market performance of the Company’s stock, and are subject to the recipient’s continued employment through the end of the performance period. The number of performance shares earned is determined by reference to the Company’s total shareholder return relative to a peer group of other publicly traded banks and bank holding companies during the performance period. The performance period is generally three years starting on the grant date. The fair value of performance stock is determined using a Monte Carlo simulation model on the grant date.  As of December 31, 2021, there was $460,000 of total unrecognized compensation cost related to non-vested performance stock.  As of December 31, 2021, non-vested performance stock had a weighted average remaining time to vest of 2.0 years.

The following table summarizes restricted stock and performance stock activity:

Retirement Plans

The Company has a retirement savings 401(k) and profit-sharing plan in which all employees age 21 and older may participate after completion of one year of service. For employees in service with the Company at June 15, 2005, the length of service and age requirements were waived. The Company matches employees’ contributions based on a percentage of salary contributed by participants and may make additional discretionary profit-sharing contributions. The Company’s expense for the plan was $1.6 million, $2.0 million, and $1.7 million for 2021, 2020 and 2019, respectively.