The Company has maintained option plans and maintains an equity incentive plan, which allow for the grant of options to officers, employees and members of the Board of Directors. Grants of options under the Company’s plans generally vest over 3 years and must be exercised within 10 years of the date of grant. Transactions under the Company’s stock option plans for 2022, 2021 and 2020 are summarized in the following table:

On April 25, 2019, the Company adopted the 2019 Equity Compensation Plan providing for grants of up to 500,000 shares to be allocated between incentive and non-qualified stock options, restricted stock awards, performance units and deferred stock. The Plan replaced all previously approved and established equity plans then currently in effect. As of December 31, 2022, 281,500 options and 209,400 shares of restricted stock have been awarded from the plan. In addition, 15,496 unvested options and 12,400 unvested shares of restricted stock were cancelled and returned to the plan leaving 36,996 shares available for future grants.

The fair values of the options granted during 2021 and 2020 were estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions. There were no options granted during 2022.

Upon exercise, the Company issues shares from its authorized but unissued common stock to satisfy the options. The following table presents information about options exercised during 2022, 2021 and 2020:


	For the years ended December 31,
	2022		2021		2020
Number of options exercised		115,538		71,267		63,011
Total intrinsic value of options exercised	$	1,614,421	$	974,776	$	564,314
Cash received from options exercised		1,698,357		630,302		451,420
Tax deduction realized from options		485,698		293,261		169,774

The following table summarizes information about stock options outstanding and exercisable at December 31, 2022:


	Options outstanding					Options exercisable
			Weighted average	Weighted			Weighted
		Options	remaining contractual	average		Options	average
Range of exercise prices		outstanding	life (in years)	exercise price		exercisable	exercise price
$7.25 - $16.51		140,533	4.0	$	11.93	128,867	$	11.54
$16.52 - $19.26		135,166	6.8		18.08	97,013		18.16
$19.27 - $20.88		143,500	6.5		20.30	110,834		20.22
$20.89 - $22.57		140,300	6.4		22.02	118,300		21.92
Total		559,499	5.9	$	18.09	455,014	$	17.76

FASB ASC Topic 718, “Compensation - Stock Compensation,” requires an entity to recognize the fair value of equity awards as compensation expense over the period during which an employee is required to provide service in exchange for such an award (vesting period). Compensation expense related to stock options and the related income tax benefit for the years ended December 31, 2022, 2021 and 2020 are detailed in the following table:


	For the years ended December 31,
	2022		2021		2020
Compensation expense	$	567	$	867	$	744
Income tax benefit		164		251		215

As of December 31, 2022, unrecognized compensation costs related to nonvested share-based compensation arrangements granted under the Company’s stock option plans totaled approximately $350 thousand. That cost is expected to be recognized over a weighted average period of 1.1 years.

Restricted Stock Awards

Restricted stock is issued under the 2019 Equity Compensation Plan to reward employees and directors and to retain them by distributing stock over a period of time. Restricted stock awards granted to date vest over a period of 4 years and are recognized as compensation to the recipient over the vesting period. The awards are recorded at fair market value at the time of grant and amortized into salary expense on a straight line basis over the vesting period. The following table summarizes nonvested restricted stock activity for the year ended December 31, 2022:


		Average grant
	Shares	date fair value
Nonvested restricted stock at December 31, 2021	119,487	$	21.00
Granted	97,700		27.48
Cancelled	(11,587)		23.29
Vested	(41,030)		20.68
Nonvested restricted stock at December 31, 2022	164,570	$	24.77

Restricted stock awards granted during the years ended December 31, 2022, 2021 and 2020 were as follows:


	For the years ended December 31,
	2022		2021		2020
Number of shares granted		97,700		68,550		27,250
Average grant date fair value	$	27.48	$	22.15	$	17.12

Compensation expense related to the restricted stock for the years ended December 31, 2022, 2021 and 2020 is detailed in the following table:


	For the years ended December 31,
	2022		2021		2020
Compensation expense	$	1,114	$	750	$	667
Income tax benefit	$	320	$	217	$	193

As of December 31, 2022, there was approximately $3.3 million of unrecognized compensation cost related to nonvested restricted stock awards granted under the Company’s stock incentive plans. That cost is expected to be recognized over a weighted average period of 3.0 years.

401(k) Savings Plan

The Bank has a 401(k) savings plan covering substantially all employees. Under the Plan, an employee can contribute up to 75 percent of their salary on a tax deferred basis. The Bank may also make discretionary contributions to the Plan. The Bank contributed $790 thousand, $786 thousand, and $675 thousand to the Plan in 2022, 2021 and 2020, respectively.

Deferred Fee Plan

The Company has a deferred fee plan for Directors and eligible management. Directors of the Company have the option to elect to defer up to 100 percent of their respective retainer and Board of Director fees, and each eligible member of management has the option to elect to defer 100 percent of their total compensation. Director and executive deferred compensation totaled $674 thousand in 2022, $593 thousand in 2021 and $591 thousand in 2020, and the interest paid on deferred balances totaled $162 thousand in 2022, $136 thousand in 2021 and $132 thousand in 2020. The deferred balances distributed totaled $14 thousand in 2022, 2021 and 2020.

Benefit Plans

In addition to the 401(k) savings plan which covers substantially all employees, in 2015 the Company established an unfunded supplemental defined benefit plan to provide additional retirement benefits for the President and Chief Executive Officer (“CEO”) and unfunded, non-qualified deferred retirement plans for certain other key executives.

On June 4, 2015, the Company approved the Supplemental Executive Retirement Plan (“SERP”) pursuant to which the President and CEO is entitled to receive certain supplemental nonqualified retirement benefits. The retirement benefit under the SERP is an amount equal to sixty percent (60%) of the average of the President and CEO’s base salary for the thirty-six (36) months immediately preceding the executive’s separation from service after age 66, adjusted annually thereafter by a percentage equal to the Consumer Price Index as reported by the U.S. Bureau of Labor Statistics for All Urban Consumers (CPI-U). The total benefit is to be made payable in fifteen annual installments. The future payments are estimated to total $7.2 million. A discount rate of four percent (4%) was used to calculate the present value of the benefit obligation.

The President and CEO commenced vesting to this retirement benefit on January 1, 2014, and it will vest an additional three percent (3%) each year until fully vested on January 1, 2024. In the event that the President and CEO’s separation from service from the Company were to occur prior to full vesting, the President and CEO would be entitled to and shall be paid the vested portion of the retirement benefit calculated as of the date of separation from service. Notwithstanding the foregoing, upon a Change in Control, and provided that within 6 months following the Change in Control the President and CEO is involuntarily terminated for reasons other than “cause” or the President and CEO resigns for “good reason”, as such is defined in the SERP, or the President and CEO voluntarily terminates his employment after being offered continued employment in a position that is not a “Comparable Position”, as such is also defined in the SERP, the President and CEO shall become one hundred percent (100%) vested in the full retirement benefit.

No contributions or payments have been made for the year 2022, 2021 or 2020. The following table summarizes the components of the net periodic pension cost of the defined benefit plan recognized during the years ended December 31, 2022, 2021 and 2020:


	For the years ended December 31,
(In thousands)	2022		2021		2020
Service cost	$	150	$	515	$	126
Interest cost		186		161		147
Amortization of prior service cost		—		332		83
Net periodic benefit cost	$	336	$	1,008	$	356

The following table summarizes the changes in benefit obligations of the defined benefit plan recognized during the years ended December 31, 2022, 2021 and 2020


	For the years ended December 31,
(In thousands)	2022		2021		2020
Benefit obligation, beginning of year	$	4,521	$	3,845	$	3,572
Service cost		150		515		126
Interest cost		186		161		147
Benefit obligation, end of period	$	4,857	$	4,521	$	3,845

On October 22, 2015, the Company entered into an Executive Incentive Retirement Plan (the “Plan”) with key executive officers other than the President and CEO. The Plan has an effective date of January 1, 2015.

The Plan is an unfunded, nonqualified deferred compensation plan. For any Plan Year, a guaranteed annual Deferral Award percentage of seven and one half percent (7.5%) of the participant’s annual base salary shall be credited to each Participant’s Deferred Benefit Account. A discretionary annual Deferral Award equal to seven and one half percent (7.5%) of the participant’s annual base salary may be credited to the Participant’s account in addition to the guaranteed Deferral Award, if the Bank exceeds the benchmarks set forth in the Annual Executive Bonus Matrix. The total Deferral Award shall never exceed fifteen percent (15%) of the participant’s base salary for any given Plan Year. Each Participant shall be one hundred percent (100%) vested in all Deferral Awards as of the date they are awarded.

As of December 31, 2022, the Company had total expenses related to the Plan of $142 thousand, compared to $108 thousand in 2021 and $86 thousand in 2020. The Plan is reflected on the Company’s balance sheet as accrued expenses.

Certain members of management are also enrolled in a split-dollar life insurance plan with a post retirement death

benefit of $250 thousand. Total expenses related to this plan were $22 thousand in 2022 and $5 thousand in 2021 and 2020, respectively. Additionally, $55 thousand of prior period expense was reversed during 2022. This was related to adjustments made to the members of management participating in the plan.