The AMERISAFE 2005 Equity Incentive Plan (the “2005 Incentive Plan”) is administered by the Compensation Committee of the Board and was designed to provide incentive compensation to executive officers and other key management personnel. The 2005 Incentive Plan permitted awards in the form of incentive stock options, as defined in Section 422(b) of the Internal Revenue Code of 1986, non-qualified stock options, restricted shares of common stock and restricted stock units. In connection with the approval of the 2012 Equity and Incentive Compensation Plan by the Company’s shareholders, no further grants were made under the 2005 Incentive Plan. As of December 31, 2020, there are no outstanding options or restricted stock awards under the 2005 Incentive Plan.

Stock options granted under the 2005 Incentive Plan were exercisable, subject to vesting requirements determined by the Compensation Committee, for periods of up to ten years from the date of grant. Stock options generally expire 90 days after the cessation of an optionee’s service as an employee. However, in the case of an optionee’s death or disability, the unexercised portion of a stock option remains exercisable for up to one year after the optionee’s death or disability. Stock options that were granted under the 2005 Incentive Plan are not transferable, except by will or the laws of descent and distribution.

The Company used the Black-Scholes-Merton option pricing model to estimate the fair value of each option on the date of grant. The expected terms of options were developed by considering the Company’s historical attrition rate for those employees at the officer level, who were eligible to receive options. Further, the Company aggregated individual awards into homogenous groups based upon grant date. Expected volatility was estimated using daily historical volatility for six companies within the property and casualty insurance sector. The Company believes that historical volatility of this peer group was the best estimate of expected volatility of the market price of the Company’s common shares. The dividend yield was assumed to be zero as the Company did not pay cash dividends until 2013. The risk-free interest rate is the yield on the grant date of U.S. Treasury zero coupon securities with a maturity comparable to the expected term of the options.

The following table summarizes information about the stock option activity under the 2005 Incentive Plan:

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)
Outstanding at January 1, 2018		20,000			5.21		2.1
Granted		—			—		—
Exercised		(15,000	)		4.46		0.9
Canceled, forfeited, or expired		—			—		—
Outstanding at December 31, 2018		5,000			3.95		1.9
Exercisable at December 31, 2018		5,000			3.95		1.9
Outstanding at January 1, 2019		5,000			3.95		1.9
Granted		—			—		—
Exercised		(5,000	)		3.95		0.9
Canceled, forfeited, or expired		—			—		—
Outstanding at December 31, 2019		—			—		—
Exercisable at December 31, 2019		—			—		—
Outstanding at January 1, 2020		—			—		—
Granted		—			—		—
Exercised		—			—		—
Canceled, forfeited, or expired		—			—		—
Outstanding at December 31, 2020		—			—		—
Exercisable at December 31, 2020		—			—		—

	2020		2019		2018
	(in thousands)
Cash received from option exercises	$	—	$	20	$	67
Total intrinsic value of options exercised		—		287		766
Aggregate intrinsic value of vested options outstanding		—		—		264

The Company recognized no compensation expense in 2020 and 2019 and $12,000 in 2018, related to awards made under the 2005 Incentive Plan.

In 2012, the Company’s shareholders approved the AMERISAFE 2012 Equity and Incentive Compensation Plan (the “2012 Incentive Plan”). The 2012 Incentive Plan is administered by the Compensation Committee of the Board and is designed to attract, retain and motivate non-employee directors, officers, key employees and consultants by providing incentives for superior performance. The 2012 Incentive Plan authorizes the grant of equity-based compensation in the form of option rights, appreciation rights, restricted shares, restricted stock units, cash incentive awards, performance shares and units, and other types of awards.

A maximum of 500,000 shares of common stock may be issued or transferred upon the exercise of option rights or appreciation rights, as restricted shares and released from substantial risk of forfeiture, in payment of restricted stock units, in payment of performance shares or performance units that have been earned, as awards of shares of common stock, as other awards granted under the 2012 Incentive Plan, or in payment of dividend equivalents paid with respect to awards made under the plan subject to adjustment in the event of a merger, stock dividend, stock split or similar event, which may be original issue shares or treasury shares or a combination of the two.

In 2020, 23,207 shares of common stock were granted under the 2012 Incentive Plan. In 2019, 9,391 shares of common stock and 13,322 shares of restricted stock were granted under the 2012 Incentive Plan, which will vest through 2024. At December 31, 2020, there were 297,227 shares of common stock available for future awards under the 2012 Incentive Plan.

The following table summarizes information about the common and restricted stock activity under the 2012 Incentive Plan:

	Shares			Weighted Average Grant Date Fair Value per Share
Nonvested balance at January 1, 2018		60,879			45.71
Granted		3,304			59.16
Vested		(24,608	)		44.31
Forfeited		—			—
Nonvested balance at December 31, 2018		39,575			48.93
Granted		22,713			61.08
Vested		(29,760	)		51.86
Forfeited		—			—
Nonvested balance at December 31, 2019		32,528			54.02
Granted		23,207			58.62
Vested		(40,421	)		54.31
Forfeited		—			—
Nonvested balance at December 31, 2020		15,314			60.23

The Company recognized compensation expense of $605,000, $676,000 and $726,000 in 2020, 2019 and 2018, respectively, related to share-based grants. The Company recognized compensation expense of $2,341,000, $1,359,000 and $976,000 in 2020, 2019 and 2018, respectively, related to long-term incentive awards under the 2012 Incentive Plan. The long-term incentive award is a liability award.

The AMERISAFE Non-Employee Director Restricted Stock Plan (the “Restricted Stock Plan”) is administered by the Compensation Committee of the Board and provides for the automatic grant of restricted stock awards to non-employee directors of the Company. Awards to non-employee directors are generally subject to terms including non-transferability, immediate vesting upon death or total disability of a director, forfeiture of unvested shares upon termination of service by a director and acceleration of vesting upon a change of control of the Company. The maximum number of shares of common stock that may be issued pursuant to restricted stock awards under the Restricted Stock Plan is 150,000 shares, subject to the authority of the Board to adjust this amount in the event of a merger, consolidation, reorganization, stock split, combination of shares, recapitalization or similar transaction affecting the common stock. At December 31, 2020, there were 47,748 shares of common stock available for future awards under the Restricted Stock Plan.

Under the Restricted Stock Plan, each non-employee director is automatically granted a restricted stock award for a number of shares equal to $50,000 divided by the closing price of the Company’s common stock on the date of the annual meeting of shareholders at which the non-employee director is elected or is continuing as a member of the Board. Each restricted stock award vests on the date of the next annual meeting of shareholders following the date of grant, subject to the continued service of the non-employee director. Under the terms of the Restricted Stock Plan, the Company’s Board of Directors may increase the dollar amount of the annual award to an amount up to $75,000 without further shareholder approval.

As of December 31, 2020, there were 5,068 shares of restricted stock outstanding under the Non-Employee Director Restricted Stock Plan, all of which will vest on the date of the annual meeting of shareholders in 2021.

The following table summarizes information about the restricted stock activity under the Non-Employee Director Restricted Stock Plan:

	Shares			Weighted Average Grant Date Fair Value per Share
Nonvested balance at January 1, 2018		6,454			54.20
Granted		5,761			60.75
Vested		(6,454	)		54.20
Forfeited		—			—
Nonvested balance at December 31, 2018		5,761			60.75
Granted		4,890			61.34
Vested		(5,761	)		60.75
Forfeited		—			—
Nonvested balance at December 31, 2019		4,890			61.34
Granted		5,269			68.88
Vested		(5,091	)		61.49
Forfeited		—			—
Nonvested balance at December 31, 2020		5,068			69.03

The Company recognized compensation expense of $349,000 in 2020, $317,000 in 2019 and $351,000 in 2018 related to the Non-Employee Director Restricted Stock Plan.