Stock Based Compensation

9 Months Ended

Sep. 30, 2021

Share-based Payment Arrangement [Abstract]

LCNB established an Ownership Incentive Plan (the "2002 Plan") during 2002 that allowed for stock-based awards to eligible employees, as determined by the Board of Directors. The awards were made in the form of stock options, share awards, and/or appreciation rights. The 2002 Plan provided for the issuance of up to 200,000 shares of common stock. Options granted under the 2002 Plan vested ratably over a five-year period and expired ten years after the date of grant. The 2002 Plan expired on April 16, 2012. Any outstanding unexercised options, however, continued to be exercisable in accordance with their terms.

The 2015 Ownership Incentive Plan (the "2015 Plan") was ratified by LCNB's shareholders at the annual meeting on April 28, 2015 and allows for stock-based awards to eligible employees, as determined by the Compensation Committee of the Board of Directors. Awards may be made in the form of stock options, appreciation rights, restricted shares, and/or restricted share units. The 2015 Plan provides for the issuance of up to 450,000 shares of common stock. The 2015 Plan will terminate on April 28, 2025 and is subject to earlier termination by the Compensation Committee.

Stock-based awards may be in the form of treasury shares or newly issued shares.

LCNB has not granted stock option awards since 2012.

The following table summarizes stock option activity for the periods indicated:


	Nine Months Ended September 30,
	2021					2020
	Options	Weighted Average Exercise Price		Aggregate Intrinsic Value (in thousands) (1)		Options	Weighted Average Exercise Price		Aggregate Intrinsic Value (in thousands) (1)
Outstanding, January 1,	311	$	12.60			9,904	$	11.96
Granted	—	—				—	—
Exercised	(311)	12.60				(9,593)	11.94
Expired	—	—				—	—
Outstanding, September 30,	—	—		$	—	311	12.60		$	—
Exercisable, September 30,	—	—		$	—	311	12.60		$	—
(1) Aggregate Intrinsic Value is defined as the amount by which the current market value of the underlying stock exceeds the exercise price of the option.

The following table provides information related to stock options exercised during the periods indicated (in thousands):


	Nine Months Ended September 30,
	2021		2020
Intrinsic value of options exercised	$	1	46
Cash received from options exercised	4		115
Tax benefit realized from options exercised	—		5

Restricted stock awards granted under the 2015 Plan were as follows:


	2021			2020
	Shares	Weighted Average Grant Date Fair Value		Shares	Weighted Average Grant Date Fair Value
Outstanding, January 1,	28,596	$	17.42	17,752	$	18.03
Granted	26,321	16.85		19,211	16.87
Vested	(8,959)	17.54		(3,818)	18.45
Forfeited	(756)	16.86		(3,550)	16.90
Outstanding, September 30,	45,202	$	17.08	29,595	$	17.37

The following table presents expense recorded in salaries and employee benefits for restricted stock awards and the related tax information for the three and nine months ended September 30, 2021 and 2020 (in thousands):


	Three Months Ended September 30,			Nine Months Ended September 30,
	2021		2020	2021	2020
Restricted stock expense	$	52	34	197	102
Tax effect	11		7	41	21

Unrecognized compensation expense for restricted stock awards was $657,000 at September 30, 2021 and is expected to be recognized over a period of 4.4 years.