3. STOCK BASED COMPENSATION

The Company accounts for stock-based compensation under the provisions of ASC Topic 718, “Compensation - Stock Compensation.” The Company recognizes compensation cost in its financial statements for all share-based payments granted, modified, or settled during the period.

For awards with graded vesting, compensation cost is recognized on a straight-line basis over the related vesting period.

For the three months ended June 30, 2021 and 2020, the Company recorded compensation expense of $1,464,000 and $1,149,000, respectively, related to amortization of non-vested stock grants and performance-based awards. For the six months ended June 30, 2021 and 2020, the Company recorded compensation expense of $2,920,000 and $2,273,000, respectively, related to amortization of non-vested stock grants and performance-based awards.

No stock options were exercised by employees or directors during the three and six months ended June 30, 2021 and 2020. During the three months ended June 30, 2021 and 2020, 20,043 and 15,351 shares of non-vested stock, respectively, vested. During the six months ended June 30, 2021 and 2020, 29,350 and 26,096 shares of non-vested stock, respectively, vested.

During the six months ended June 30, 2021, the Company issued 35,666 shares of non-vested stock to employees and directors which vest over periods ranging from one to five years. The per-share fair market value on the date of grant of the non-vested stock issued during the six months ended June 30, 2021 ranged from $84.06 to $100.57, resulting in an aggregate fair value of $3.5 million.

During the six months ended June 30, 2021, the Company granted performance-based awards that entitle recipients to earn up to 19,500 shares of Company stock if certain performance criteria are achieved over a three-year period. The Company estimated the aggregate fair value of the awards on the grant date to be $0.8 million.