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Stock Incentive Plan
9 Months Ended
Sep. 30, 2019
Share-based Payment Arrangement [Abstract]  
Stock Incentive Plan
Stock Incentive Plan
The Company adopted the 2017 Stock Option Plan (“2017 Plan”) following shareholder approval of the 2017 Plan at the 2017 Annual Meeting.  Subsequent to the adoption of the 2017 Plan, no additional grants may be issued under the prior plans.  The 2017 Plan provides for grants of up to 350,000 shares of common stock.
Stock Options:  Under the 2017 Plan and previous plans, certain key employees have been granted the option to purchase set amounts of common stock at the market price on the day the option was granted.  Optionees, at their own discretion, may cover the cost of exercise through the exchange at the then fair value of already owned shares of the Company’s stock.  Options are granted for a 10-year period and vest on a pro-rata basis over the initial three years from grant.
The Company measures the fair value of each stock option at the date of grant using the Black-Scholes option pricing model. For the quarters ended September 30, 2019 and 2018, the Company recognized $32,000 and $31,000, respectively, in stock option compensation expense as a component of salaries and other personnel expense. For the nine months ended September 30, 2019 and 2018, the Company recognized $97,000 and $139,000, respectively, in stock option compensation expense as a component of salaries and other personnel expense.
The Company allows stock options to be exercised through cash or cashless transactions. Cashless stock option exercises require a portion of the options exercised to be net settled in satisfaction of the exercise price and applicable tax withholding requirements. The Company issued 2,533 and 4,256 shares from the exercise of stock options for the three and nine-month periods ended September 30, 2019, respectively. In the three and nine-month periods ended September 30, 2019, the Company net settled $137,000 and $203,000 for cashless stock option exercises, respectively. The Company withheld $268,000 and $317,000 to pay for stock option exercises or income taxes that resulted from the exercise of stock options in the three and nine-month periods ended September 30, 2019, respectively.
The Company issued 11,427 and 12,423 shares from the exercises of stock options in the three and nine-month periods ended September 30, 2018. The Company received $195,000 cash for the stock option exercises in the three and nine-month periods ended September 30, 2018. In the three months ended September 30, 2018, the Company net settled $74,000 for cashless stock option exercises. In the nine-month period ended September 30, 2018, the Company net settled $130,000 for cashless stock option exercises. The Company withheld $154,000 and $227,000 to pay for stock option exercises or income taxes the resulted from the exercise of stock options in the three and nine-month periods ended September 30, 2018.
There were no stock options granted in the three or nine-month periods ended September 30, 2019 or 2018.
Restricted Stock Units:  The Company grants restricted stock units to certain key employees periodically.  Recipients of restricted stock units do not pay any cash consideration to the Company for the shares and receive all dividends with respect to such shares when the shares vest. Restricted stock units cliff vest at the end of a three-year time period. For the three months ended September 30, 2019 and 2018, the Company recognized $161,000 and $128,000, respectively, in restricted stock unit compensation expense as a component of salaries and other personnel expense. For the nine months ended September 30, 2019 and 2018, the Company recognized $447,000 and $432,000, respectively, in restricted stock unit compensation expense as a component of salaries and other personnel expense.
There were no restricted stock units granted in the three or nine-month periods ended September 30, 2019 or 2018.