STOCK OPTIONS

The Company’s 2015 Equity Incentive Plan (the “Plan”) which was adopted by the Company and approved by its shareholders in April 2015, amended and restated the Company’s 2014 Stock Option Plan. The maximum number of shares of common stock that may be issued pursuant to stock-based awards under the Plan equals 1,000,000 shares, all of which may be subject to incentive stock option treatment. Option awards are generally granted with an exercise price equal to the market price of the Company’s common stock at the date of grant. Currently outstanding option awards have vesting periods ranging from 5 to 10 years and have 10-year contractual terms.

The fair value of each option award is estimated on the date of grant using a closed form option valuation (Black-Scholes) model that uses the assumptions noted in the table below. Expected volatilities are based on historical volatilities of the Company’s common stock and similar peer group averages. The Company uses historical data to estimate option exercise and post-vesting termination behavior. The expected term of options granted is based on historical data and represents the period of time that options granted are expected to be outstanding, which takes in to account that the options are not transferable. The risk-free interest rate for the expected term of the option is based on U.S. Treasury yield curve in effect at the time of the grant.

A summary of activity in the Plan during the nine months ended September 30, 2018 and 2017 follows:



Nine Months Ended September 30, 2018	Number of Shares		Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life in Years	Aggregate Intrinsic Value
Outstanding at beginning of year	471,442		$	24.98	7.30	$	2,696
Granted	90,000		32.59		9.72	—
Exercised	(6,000	)	23.33		5.98	41
Forfeited	(11,800	)	23.41		5.74	81
Balance, September 30, 2018	543,642		$	26.29	7.10	$	2,393

Exercisable at end of period	172,143		$	24.16	5.79	$	1,053



Nine Months Ended September 30, 2017	Number of Shares		Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life in Years	Aggregate Intrinsic Value
Outstanding at beginning of year	340,377		$	23.43	7.34	$	194
Granted	150,598		27.64		9.62	657
Exercised	(7,033	)	11.94		4.48	141
Forfeited	(6,000	)	23.17		7.13	53
Balance, September 30, 2017	477,942		$	24.93	7.57	$	3,376

Exercisable at end of period	98,044		$	23.45	6.17	$	838

A summary of nonvested activity in the Plan during the nine months ended September 30, 2018 and 2017 follows:



Nine Months Ended September 30, 2018	Number of Shares		Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life in Years	Aggregate Intrinsic Value
Outstanding at beginning of year	336,798		$	25.54	7.88	$	1,747
Granted	90,000		32.59		9.72	—
Vested	(45,899	)	25.64		7.93	228
Forfeited	(9,400	)	23.41		5.74	81
Balance, September 30, 2018	371,499		$	27.28	7.70	$	1,340



Nine Months Ended September 30, 2017	Number of Shares		Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life in Years	Aggregate Intrinsic Value
Outstanding at beginning of year	250,700		$	23.73	7.65	$	69
Granted	150,598		27.64		9.62	657
Vested	(17,400	)	23.13		7.91	154
Forfeited	(4,000	)	23.17		7.13	53
Balance, September 30, 2017	379,898		$	25.31	7.93	$	2,538

Information related to the Plan is as follows for the nine months ended:



	September 30, 2018		September 30, 2017
Intrinsic value of options exercised	$	41	$	141
Cash received from options exercised	140		84
Weighted average fair value of options granted	5.62		5.40

As of September 30, 2018, there was $1,997 of total unrecognized compensation expense related to unvested stock options granted under the Plan. The expense is expected to be recognized over a weighted-average period of 3.93 years.

The Company granted options under the Plan during the first nine months of 2018 and 2017. Expense of $378 and $247 was recorded during the nine months ended September 30, 2018 and 2017, respectively.