The 2013 Stock Option and Incentive Plan (the “2013 Plan”) was approved by shareholders on April 23, 2013. Under the 2013 Plan, the maximum number of shares of the Bancorp’s common stock to be issued is 1,748,250. The 2013 Plan permits the granting of stock options and other equity incentives to officers, employees, directors and other key persons. Vesting of stock options and share awards may accelerate or may be subject to proportional vesting if there is a change in control, disability, retirement or death (as defined in the 2013 Plan).

The following table presents share-based compensation expense and the related income tax benefits recognized in the Consolidated Statements of Income for stock options, nonvested share units and nonvested performance share units:


(Dollars in thousands)
Years ended December 31,	2020	2019	2018
Share-based compensation expense	$3,766	$3,124	$2,602
Related income tax benefits (1)	$801	$982	$1,108

(1)Includes $103 thousand of excess tax expenses recognized upon the settlement of share-based compensation awards in 2020. Includes $248 thousand and $496 thousand, respectively, of excess tax benefits recognized upon the settlement of share-based compensation awards in 2019 and 2018.

As of December 31, 2020, there was $5.2 million of total unrecognized compensation cost related to share-based compensation arrangements, including stock options, nonvested share units and nonvested performance share units granted under the Plans. That cost is expected to be recognized over a weighted average period of 1.93 years.

The exercise price of each stock option may not be less than the fair market value of the Bancorp’s common stock on the date of grant, and options shall have a term of no more than ten years. Stock options are designated as either non-qualified or incentive stock options. In general, the stock option price is payable in cash, by the delivery of shares of common stock already owned by the grantee, or a combination thereof. With respect to non-qualified stock option grants issued under the 2013 Plan, the exercise may also be accomplished by withholding the exercise price from the number of shares that would otherwise be delivered upon a cash exercise of the option.

Washington Trust uses historical data to estimate stock option exercise and employee departure behavior in the option-pricing model. The expected term of options granted was derived from the output of the option valuation model and represents the period of time that options granted are expected to be outstanding. Expected volatility was based on historical volatility of Washington Trust shares. The risk-free rate for periods within the contractual life of the stock option was based on the U.S. Treasury yield curve in effect at the date of grant.

The following presents the assumptions used in determining the grant date fair value of the stock option awards granted to certain key employees:


	2020		2019		2018
Options granted	81,530		61,800		47,950
Cliff vesting period (years)	3		3		3
Expected term (years)	6.5		6.5		6.5
Expected dividend yield	3.69	%	3.40	%	3.39	%
Weighted average expected volatility	29.89	%	23.05	%	22.73	%
Weighted average risk-free interest rate	0.46	%	1.71	%	3.14	%
Weighted average grant-date fair value	$5.75		$7.44		$9.74

The following table presents a summary of the status of Washington Trust’s stock options outstanding as of and for the year ended December 31, 2020:


	Number of Stock Options	Weighted Average Exercise Price	Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (000’s)
Beginning of period	248,815	$45.38
Granted	81,530	32.23
Exercised	(4,100)	17.52
Forfeited or expired	—	—
End of period	326,245	$42.44	7.23	$2,011
At end of period:
Options exercisable	134,965	$41.40	4.77	$986
Options expected to vest in future periods	191,280	$43.18	8.97	$1,025

The total intrinsic value is the amount by which the fair value of the underlying stock exceeds the exercise price of an option on the exercise date.


	Options Outstanding			Options Exercisable
Exercise Price Ranges	Number of Shares	Weighted Average Remaining Life (Years)	Weighted Average Exercise Price	Number of Shares	Weighted Average Exercise Price

$20.01 to $30.00	22,015	1.14	22.89	22,015	22.89
$30.01 to $40.00	123,405	7.82	33.57	41,875	36.17
$40.01 to $50.00	93,050	7.79	45.83	31,250	40.25
$50.01 to $60.00	87,775	7.34	56.24	39,825	58.05




Total	326,245	7.23	$42.44	134,965	$41.40

The total intrinsic value of stock options exercised during the years ended December 31, 2020, 2019 and 2018 was $46 thousand, $580 thousand and $833 thousand, respectively.

In 2020, 2019 and 2018, the Corporation granted to directors and certain key employees 27,385, 26,070 and 13,430 share units, respectively, with 3- to 5-year cliff vesting.

The following table presents a summary of the status of Washington Trust’s nonvested share units as of and for the year ended December 31, 2020:


	Number of Shares	Weighted Average Grant Date Fair Value
Beginning of period	53,890	$52.01
Granted	27,385	35.38
Vested	(15,160)	53.39
Forfeited	—	—
End of period	66,115	$44.80

The Corporation granted performance share units to certain key employees providing the opportunity to earn shares of common stock over a 3- to 5-year performance period. The number of shares vested and earned will be contingent upon the Corporation’s attainment of certain performance measures as detailed in the performance share award agreements.


		Grant Date Fair Value per Share	Weighted Average Current Performance Assumption	Expected Number of Shares
Performance share units awarded in:	2020	$34.22	140%	65,632
	2019	52.84	148%	46,320
	2018	54.25	150%	44,415
Total				156,367

The following table presents a summary of the status of Washington Trust’s performance share units as of and for the year ended December 31, 2020:


	Number of Shares	Weighted Average Grant Date Fair Value
Beginning of period	108,964	$53.16
Granted	71,007	35.70
Vested	(23,604)	51.85
Forfeited	—	—
End of period	156,367	$45.43