The 2013 Stock Option and Incentive Plan (the “2013 Plan”) was approved by shareholders on April 23, 2013. 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, restricted stock units and performance share units:


(Dollars in thousands)
Years ended December 31,	2021	2020	2019
Share-based compensation expense	$3,316	$3,766	$3,124
Related income tax benefits (1)	$978	$801	$982

(1)Includes $182 thousand and $248 thousand, respectively, of excess tax benefits recognized upon the settlement of share-based compensation awards in 2021 and 2019. Includes $103 thousand of excess tax expenses recognized upon the settlement of share-based compensation awards in 2020.

As of December 31, 2021, there was $5.1 million of total unrecognized compensation cost related to share-based compensation arrangements, including stock options, restricted stock units and performance share units granted under the Plans. That cost is expected to be recognized over a weighted average period of 1.9 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:


	2021		2020		2019
Options granted	53,700		81,530		61,800
Cliff vesting period (years)	3		3		3
Expected term (years)	6.5		6.5		6.5
Expected dividend yield	3.80	%	3.69	%	3.40	%
Weighted average expected volatility	31.50	%	29.89	%	23.05	%
Weighted average risk-free interest rate	1.41	%	0.46	%	1.71	%
Weighted average grant-date fair value	$11.10		$5.75		$7.44


	Number of Stock Options	Weighted Average Exercise Price	Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (000’s)
Beginning of period	326,245	$42.44
Granted	53,700	54.59
Exercised	(47,365)	31.87
Forfeited or expired	(10,440)	44.82
End of period	322,140	$45.95	7.17	$3,422
At end of period:
Options exercisable	138,690	$48.81	5.03	$1,112
Options expected to vest in future periods	183,450	$43.78	8.78	$2,310

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	2,900	0.47	$23.27	2,900	$23.27
$30.01 to $40.00	104,048	7.10	33.25	30,198	35.76
$40.01 to $50.00	77,306	6.89	46.67	21,406	41.49
$50.01 to $60.00	137,886	7.52	55.60	84,186	56.24




Total	322,140	7.17	$45.95	138,690	$48.81

The total intrinsic value of stock options exercised during the years ended December 31, 2021, 2020 and 2019 was $897 thousand, $46 thousand and $580 thousand, respectively.

In 2021, 2020 and 2019, the Corporation granted to directors and certain key employees 19,185, 27,385 and 26,070 restricted stock units, respectively, with 3-year cliff vesting.


	Number of Shares	Weighted Average Grant Date Fair Value
Beginning of period	66,115	$44.80
Granted	19,185	53.00
Vested	(15,543)	52.24
Forfeited	(3,472)	45.28
End of period	66,285	$45.41

The Corporation granted performance share units to certain key employees providing the opportunity to earn shares of common stock over a 3-year 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:	2021	$46.15	140%	51,156
	2020	34.22	140%	65,632
	2019	52.84	118%	36,960
	2018	54.25	140%	5,824
Total				159,572


	Number of Shares	Weighted Average Grant Date Fair Value
Beginning of period	156,367	$45.43
Granted	40,975	44.46
Vested	(37,770)	54.25
Forfeited	—	—
End of period	159,572	$43.09