The Company’s 2021 and 2018 Equity Compensation Plans (“the 2021 Plan” and “the 2018 Plan,” respectively), provide for the grant of stock-based compensation awards to members of management, including employees and management officials, and members of the Board. Under the 2021 Plan, a total of 427,500 shares of the Company’s common stock or equivalents were approved for issuance, of which 274,208 shares remain available for issuance at March 31, 2022. Of the total 346,000 shares of common stock approved for issuance under the 2018 Plan, 33,884 shares remain available for issuance at March 31, 2022. Hanover assumed the 2013 Savoy Bank Stock Option Plan solely in connection with options to purchase Savoy common stock held by the former Chief Executive Officer of Savoy and which, under the terms of the Agreement and Plan of Merger between the Company and Savoy, were converted into options to purchase 71,900 shares of Hanover common stock.

Stock options are granted with an exercise price equal to the fair market value of the Company’s common stock at the date of grant, and generally with vesting periods of three years and contractual terms of ten years. All stock options fully vest upon a change in control.

The fair value of stock options is estimated on the date of grant using a closed form option valuation (Black-Scholes) model. Expected volatilities are based on historical volatilities of the common stock of the Company’s peers. The Company uses historical data to estimate option exercise and post-vesting termination behavior. Expected terms are based on historical data and represent the periods in which the options are expected to be outstanding. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant.

No stock options were exercised during the three and six months ended March 31, 2022 and 2021.

A summary of stock option activity follows (aggregate intrinsic value in thousands):

(1)	All outstanding options are fully vested and exercisable.

There was no compensation expense attributable to stock options for the three and six months ended March 31, 2022 and 2021.

Restricted Stock Awards

During the six months ended March 31, 2022, restricted stock awards of 44,642 shares were granted with a three-year vesting period and 224,678 were granted with a five-year vesting period. Compensation expense is recognized over the vesting period of the awards based on the fair value of the stock at issue date. Since there is no active market for the Company’s stock, the fair value of the restricted stock awards was estimated on the date of grant based on prior quarter end tangible book value.

A summary of restricted stock awards activity follows:


		Weighted-Average
	Number of	Grant Date Fair
	Shares	Value
Unvested, October 1, 2021	75,833	$	19.87
Granted	269,930		19.73
Vested	(15,146)		20.81
Forfeited	(5,771)		19.35
Unvested, March 31, 2022	324,846	$	19.72

Compensation expense attributable to restricted stock awards was $401 thousand and $216 thousand for the three months ended March 31, 2022 and 2021, respectively. Compensation expense attributable to restricted stock was $618 thousand and $445 thousand for the six months ended March 31, 2022 and 2021, respectively. As of March 31, 2022, there was $5.7 million of total unrealized compensation cost related to unvested restricted stock, expected to be recognized over a weighted-average term of 4.24 years. The total fair value of shares vested during the six months ended March 31, 2022 and 2021 was $296 thousand and $349 thousand, respectively.

Restricted Stock Units

Long Term Incentive Plan

Restricted stock units (RSUs) represent an obligation to deliver shares to a grantee at a future date if certain vesting conditions are met. RSUs are subject to a time-based vesting schedule, and/or the satisfaction of performance conditions, and are settled in shares of the Company's common stock. RSUs do not provide voting rights and RSUs may accrue dividends from the date of grant.

The following table summarizes the unvested performance-based RSU activity for the six months ended March 31, 2022:


		Weighted-Average
	Number of	Grant Date Fair
	Shares	Value
Unvested, October 1, 2021	—	$	—
Granted	51,097		19.73
Vested	—		—
Forfeited	—		—
Unvested, March 31, 2022	51,097	$	19.73

During the six months ended March 31, 2022, the Company granted 51,097 RSUs. These performance-based RSUs cliff vest after three years and are subject to the achievement of the Company's pre-defined performance goals for the three-year period ending December 31, 2024.

Compensation expense attributable to RSUs was $57 thousand for the three and six months ended March 31, 2022. There was no compensation expense related to RSUs for the three and six months ended March 31, 2021, as no RSUs were granted in 2021. As of March 31, 2022, there was $951 thousand of total unrecognized compensation cost related to non-vested RSUs. The cost is expected to be recognized over a weighted-average period of 2.9 years.