The Company maintains the 2016 Stock Plan (“2016 Plan”), the 2006 Stock Plan (“2006 Plan”) and the 2011 Employee Stock Purchase Plan (“2011 ESPP”).

In connection with the acquisition of Virginia Heritage, the Company assumed the Virginia Heritage 2006 Stock Option Plan and the 2010 Long Term Incentive Plan (the “Virginia Heritage Plans”).

The Company adopted the 2016 Plan upon approval by the shareholders at the 2016 Annual Meeting held on May 12, 2016. The 2016 Plan provides directors and selected employees of the Bank, the Company and their affiliates with the opportunity to acquire shares of stock, through awards of options, time vested restricted stock, performance-based restricted stock and stock appreciation rights. Under the 2016 Plan, 1,000,000 shares of common stock were initially reserved for issuance.

For awards that are service based, compensation expense is being recognized over the service (vesting) period based on fair value, which for stock option grants is computed using the Black-Scholes model. For restricted stock awards granted under the 2006 plan, fair value is based on the average of the high and low stock price of the Company’s shares on the date of grant. For restricted stock awards granted under the 2016 plan, fair value is based on the Company’s closing price on the date of grant. For awards that are performance-based, compensation expense is recorded based on the probability of achievement of the goals underlying the grant.

In February 2020, the Company awarded 152,184 shares of time vested restricted stock to senior officers, directors, and certain employees. The shares vest in three substantially equal installments beginning on the first anniversary of the date of grant.

In February 2020, the Company awarded senior officers a targeted number of 44,741 performance vested restricted stock units (“PRSUs”). The vesting of PRSUs is 100% after three years with payouts based on threshold, target or maximum average performance targets over a three year period. There are two performance metrics: 1) total shareholder's return; and 2) return on average assets.

In April 2020, the Company awarded 24,068 shares of time vested restricted stock to the Chairman of the Board of Directors. The shares vest in three substantially equal installments beginning on the first anniversary of the date of grant.

The Company has unvested restricted stock awards and PRSU grants of 308,673 shares at December 31, 2020. Unrecognized stock based compensation expense related to restricted stock awards and PRSU grants totaled $7.9 million at December 31, 2020. At such date, the weighted-average period over which this unrecognized expense was expected to be recognized was 1.89 years.


	Years Ended December 31,
	2020			2019
Performance Awards	Shares	Weighted- Average Grant Date Fair Value		Shares	Weighted- Average Grant Date Fair Value

Unvested at beginning	58,780	$	57.74	98,958	$	54.76
Issued	44,741	40.19		43,145	55.76
Forfeited	(8,586)	54.89		(65,589)	55.25
Vested	(4,293)	62.70		(17,734)	45.50
Unvested at end	90,642	$	49.11	58,780	$	57.74


	Years Ended December 31,
	2020			2019
Time Vested Awards	Shares	Weighted- Average Grant Date Fair Value		Shares	Weighted- Average Grant Date Fair Value
Unvested at beginning	110,714	$	57.84	173,721	$	58.93
Issued	176,252	42.51		112,636	55.76
Forfeited	(18,385)	50.06		(44,600)	58.73
Vested	(50,550)	58.76		(131,043)	57.20
Unvested at end	218,031	$	45.89	110,714	$	57.84

Below is a summary of stock option activity for the twelve months ended December 31, 2020, 2019 and 2018. The information excludes restricted stock units and awards.


	Years Ended December 31,
	2020			2019			2018
	Shares	Weighted- Average Exercise Price		Shares	Weighted- Average Exercise Price		Shares	Weighted- Average Exercise Price
Beginning balance	6,589	$	19.99	34,123	$	14.69	143,224	$	9.13
Issued	2,500	47.95		—	—		—	—
Exercised	(3,300)	11.40		(26,784)	12.42		(108,201)	7.17
Forfeited	—	—		(750)	49.08		(900)	34
Ending balance	5,789	$	36.96	6,589	$	19.99	34,123	$	14.69

The following summarizes information about stock options outstanding at December 31, 2020. The information excludes restricted stock units and awards.


Outstanding:		Stock Options Outstanding	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life (Years)
Range of Exercise Prices
$5.76 -	$10.72	—	—		—
$10.73 -	$11.40	1,789	$	10.73	1.30
$11.41 -	$24.86	—	—		—
$24.87 -	$49.91	4,000	48.69		7.65
		5,789	$	36.96	5.69


Exercisable:		Stock Options Exercisable	Weighted-Average Exercise Price
Range of Exercise Prices
$5.76 -	$10.72	—	—
$10.73 -	$11.40	1,789	$	10.73
$11.41 -	$24.86	—	—
$24.87 -	$49.91	1,500	49.91
		3,289	$	28.60

There were no grants of stock options during the years ended December 31, 2019 and 2018. For 2020, there was one grant to an executive officer for 2,500 incentive stock options in January 2020, which has a ten-year term and vests in three equal installments beginning on the first anniversary of the date of grant. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option pricing model with the assumptions shown in the table below used for the grants during 2020.


	Year Ended December 31, 2020
Expected volatility	42.3		%
Weighted-Average volatility	42.3		%
Expected dividends	—
Expected term (in years)	6.5
Risk-free rate	1.67		%
Weighted-average fair value (grant date)	$	21.06

The expected lives were based on the "simplified" method allowed by ASC 718 "Compensation," whereby the expected term is equal to the midpoint between the vesting date and the end of the contractual term of the award.

The total intrinsic value of outstanding stock options was $54 thousand and $192 thousand, respectively, at December 31, 2020 and 2019. The total fair value of stock options vested was $6 thousand, $35 thousand and $80 thousand, for 2020, 2019 and 2018, respectively. Unrecognized stock-based compensation expense related to stock options totaled $35 thousand at December 31, 2020. At such date, the weighted-average period over which this unrecognized expense was expected to be recognized was 2.02 years.


	Years Ended December 31,
(dollars in thousands)	2020		2019		2018
Proceeds from stock options exercised	$	63	$	332	$	776
Tax benefits realized from stock compensation	24		50		5
Intrinsic value of stock options exercised	91		1,022		4,958

Approved by shareholders in May 2011, the 2011 ESPP reserved 550,000 shares of common stock (as adjusted for stock dividends) for issuance to employees. Whole shares are sold to participants in the plan at 85% of the lower of the stock price at the beginning or end of each quarterly offering period. The 2011 ESPP is available to all eligible employees who have completed at least one year of continuous employment, work at least 20 hours per week and at least five months a year. Participants may contribute a minimum of $10 per pay period to a maximum of $6,250 per offering period or $25,000 annually (not to exceed more than 10% of compensation per pay period). At December 31, 2020, the 2011 ESPP had 346,301 shares reserved for issuance.

Included in salaries and employee benefits in the accompanying Consolidated Statements of Income, the Company recognized $5.3 million, $7.7 million and $6.6 million in stock-based compensation expense for 2020, 2019 and 2018, respectively. In addition, during 2019 the Company accrued $4.5 million in stock-based compensation costs associated with the retirement of our former Chairman and Chief Executive Officer. Stock-based compensation expense is recognized ratably over the requisite service period for all awards.