Premier has established equity based compensation plans for its directors and employees. On February 27, 2018, the BoTotal Fair Valueard adopted, and the shareholders approved at the 2018 Annual Shareholders Meeting, the Premier Financial Corp. 2018 Equity Incentive Plan (the “2018 Equity Plan”). The 2018 Equity Plan replaced all existing plans, although the Company’s former equity plans remain in existence to the extent there were outstanding grants thereunder at the time the 2018 Equity Plan was approved. In addition, as a result of the Merger, Premier assumed certain outstanding stock options granted under UCFC’s Amended and Restated 2007 Long-Term Incentive Plan (the “UCFC 2007 Plan”) and UCFC’s 2015 Long Term Incentive Plan, which has since been renamed as the “Premier Financial Corp. 2015 Long Term Incentive Plan” (the “2015 Plan”). Premier also assumed the 2015 Plan with respect to the available shares under the UCFC 2015 Plan as of the effective date of the Merger, with appropriate adjustments to the number of shares available to reflect the Merger. The stock options assumed from UCFC in the Merger became exercisable solely to purchase shares of Premier, with appropriate adjustments to the number of shares subject to the assumed stock options and the exercise price of such stock options and remain subject to the terms of the 2015 Plan. Besides certain options issued under the First Defiance Financial Corp. 2010 Equity Incentive Plan, all awards currently outstanding are issued under the 2018 Equity Plan or the 2015 Plan. The 2018 Equity Plan and the 2015 Plan were each amended and restated in February 2022 to align certain administrative components of the plans in addition to enhancing certain governance components. New awards will be made under either the 2018 Equity Plan or the 2015 Plan as the Company determines. The 2018 Equity Plan allows for issuance of up to 900,000 common shares through the award of options, restricted stock, stock, stock appreciation rights or other stock-based awards. The 2015 Plan allows for the issuance of up to 1.2 million common shares, as adjusted for the Merger, through the award of options, stock, restricted stock, stock units, or stock appreciation rights.

The Company maintains a Short-Term ("STIP") Incentive Plan. Under the 2019, 2020 and 2021 STIPs, the participants can earn a cash payout. The final amount of benefits under the STIPs is determined as of December 31 of the same year and paid out in cash in the first quarter of the following year.

As of December 31, 2021, 35,661 options to acquire Premier shares were outstanding at option prices based on the market value of the underlying shares on the date the options were granted. On the date of the Merger, 39,983 Premier options were exchanged for all of the outstanding stock options on the books of UCFC at the same conversion price and ratio applied to UCFC common shares at January 31,

2020. All of these options were fully vested at the time of acquisition. All options expire ten years from the date of grant. Vested options of retirees expire on the earlier of the scheduled expiration date or twelve months after the retirement date.

The Company maintains Long-Term ("LTIP") Equity Incentive Plans for select members of management (the "Executive LTIP") and a Key Employee and Commercial Lender Plan (the "Key Plan").

Under the Executive LTIP, participants may earn between 20% to 50% of their salary for potential payout in the form of equity awards based on the achievement of certain corporate performance targets over a three-year period. The Company granted 86,058 performance stock units to the participants in the 2020 Executive LTIP during the first quarter of 2021, which represents the maximum target award. As a result of the Merger, the 2019 grant was accelerated and vested based on performance up to the date of the Merger. This resulted in the award of 51,677 shares of PFC stock to the participants with another 21,834 shares to be issued in 2021 to the then CEO of the Company. This delay in the receipt of the CEO’s shares was mandated by the Merger Agreement. The value of awards issued in 2020 and 2021 under the Executive LTIP will be determined individually at the end of each respective 36 month performance period ending December 31. The benefits earned under these LTIPs will be paid out in equity in the first quarter following the end of the performance period. The participants will receive all or a portion of the award if their employment is terminated by the Company without cause, by the participant in certain situations, or by death, disability or retirement.

Under each Key LTIP, the participants are granted restricted share units based upon the achievement of certain targets in the prior year. The participants can earn from 5% to 10% of their salary in restricted stock units that vest three years from the date of grant. The Company granted 17,542 and 12,038 RSU’s in the first quarter of 2021 and 2020, respectively, as a payout under the Key LTIP.

In 2021, the Company also granted 16,846 discretionary restricted stock units that vest three years from the date of grant and restricted stock awards for 43,460 shares. Of the 43,460 restricted stock grants, 13,708 were issued to directors and have a one-year vesting period. The remaining grants vest over a three year period. The fair value of all granted restricted shares was determined by the stock price at the date of the grant.

The fair value of each option award is estimated on the date of grant using the Black-Scholes model. Expected volatilities are based on historical volatilities of the Company’s common shares. The Company uses historical data to estimate option exercise and post-vesting termination behavior. The expected term of options granted is based on historical data and represents the period of time that options granted are expected to be outstanding, which takes into account that the options are not transferable. 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 the grant.

There were no options granted during the years ended December 31, 2021, 2020 or 2019.

Following is options activity under the plans during 2021:


	Options Outstanding			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in 000’s)
Options outstanding, January 1, 2021		36,261		$	21.59
Forfeited or cancelled		—			—
Exercised		(600	)		13.80
Exchanged		—			—
Granted		—			—
Options outstanding, December 31, 2021		35,661		$	21.72		4.33	$	328,271
Exercisable at December 31, 2021		35,661		$	21.72		4.33	$	328,271

Information related to the stock option plans is as follows:


	Year Ended December 31,
	2021		2020		2019
	(In Thousands, except per share amounts)
Intrinsic value of options exercised	$	11	$	189	$	390
Cash received from option exercises		8		—		189
Tax benefit realized from option exercises		2		40		4
Weighted average fair value of options granted	$	—	$	—	$	—

As of December 31, 2021, there was a de minimus amount of total unrecognized compensation costs related to unvested stock options granted under the Company’s equity plans. The cost is expected to be recognized over a weighted-average period of 1.0 month.

At December 31, 2021, a total of 271,707 restricted share awards were outstanding. Compensation expense is recognized over the performance or vesting period. Total expense of $2.5 million, $2.3 million and $2.1 million was recorded during the years ended December 31, 2021, 2020 and 2019, respectively, and approximately $2.7 million and $3.2 million is included within other liabilities at December 31, 2021 and 2020, respectively, related to the cash portion of the STIPs.


	Performance Stock Units					Restricted Stock Units					Stock Grants
Unvested Shares	Shares			Weighted- Average Grant Date Fair Value		Shares			Weighted- Average Grant Date Fair Value		Shares			Weighted- Average Grant Date Fair Value
Unvested at January 1, 2021		90,891		$	26.48		55,759		$	25.18		41,057		$	26.93
Granted		86,058			30.32		34,388			30.77		43,460			31.32
Vested		(9,633	)		28.24		(32,521	)		26.08		(24,849	)		28.00
Forfeited		(5,642	)		28.24		(5,853	)		24.03		(1,408	)		28.41
Unvested at December 31, 2021		161,674		$	28.36		51,773		$	28.44		58,260		$	29.71

The maximum amount of compensation expense that may be earned for the 2021 Executive LTIP at December 31, 2021, is approximately $4.3 million in the aggregate. However, the estimated expense expected to be earned as of December 31, 2021, based on the performance measures in the plans, is $2.8 million of which $480,000 was unrecognized at December 31, 2021, and will be recognized over the remaining performance period.

As of December 31, 2021, 556,698 shares were available for grant under the 2018 Equity Plan and 113,050 shares were available for grant under the 2015 Plan. Generally, grants or awards that are forfeited or cancelled under the 2018 Equity Plan and the 2015 Plan may be available for grant to other participants.