Stock Plans

12 Months Ended

Dec. 31, 2021

Stock Plans

Stock Plans

NOTE 15 – STOCK PLANS

The Company’s 2021 Equity Incentive Plan  (the "Equity Incentive Plan") covers 500,000 shares of Unico's common stock (subject to adjustment in the case of merger, consolidation, reorganization, recapitalization, stock split, reverse stock split, split up, spin-off, combination of shares, exchange of shares, stock dividend, dividend in kind, etc.) and was approved by Unico’s stockholders on May 27, 2021.  The Equity Incentive Plan provides for the grant of the following equity-based incentive awards to participants: (i) non-qualified stock options, (ii) stock appreciation rights, (iii) restricted stock, (iv) restricted stock units and (v) other stock-based awards.  Through the date of this filing, there have been 44,250 non-qualified stock options granted, 30,000 were forfeited and 14,250 outstanding. and 48,000 restricted stock grants, 31,000 forfeited with 17,000 outstanding under the Equity Incentive Plan, of which none were vested and exercisable. 

The exercise price, term, and other conditions applicable to each non-qualified stock option and restricted stock granted under the Equity Incentive Plan are determined by the Company’s Compensation Committee of the Board of Directors.  The exercise price of the stock options is set on the grant date and may not be less than the fair market value per share of the Company’s stock on that date (at market close). The non-qualified stock options granted under the Plan in 2021 vest 25% on the first anniversary of the grant date and 25% annually thereafter on the anniversary date and expire four years after the date of the grant. The restricted stock grants granted under the Plan in 2021 vest 100% on the fourth anniversary of the grant date.

The Company recognized stock-based compensation expense in the amount of $11,589 for all awards issued under the Equity Incentive Plan in the “Salaries and employee benefits” line item in the Consolidated Statements of Operations for the year ended December 31, 2021.  

The fair value of each option award is estimated on the date of the grant using the Black-Scholes Option-Pricing Model using a number of complex and subjective variables.  These variables include expected stock price volatility over the term of the awards, a risk-free interest rate and expected dividends.  

Expected dividend yield is based on the historical dividend behavior as well as the expected dividend behavior of the Company.  Expected volatility is based on the historical volatility of the Company’s stock.  The risk-free rate for periods within the contractual life of the option is based on the U.S. treasury yield curve for a 30-day treasury in effect at the time of grant.  The expected term represents an estimate of time the options are expected to remain outstanding.  In accordance with ASC Topic 718, “Compensation – Stock Compensation,” the Company estimates forfeitures at the time of the grant and revises those estimates in subsequent periods if the actual forfeitures differ from those estimates.

The assumptions used to value each option award granted during the year ended December 31, 2021, are as follows:

Weighted-average grant date fair value	$	4.52
Expected dividend yield		0.00	%
Expected volatility		96.35	%
Risk-free interest rate		0.09	%
Expected term (years)		4.00
Expected forfeiture		50.00	%

The following table summarizes non-qualified stock option and restricted stock grants activity for the year ended December 31, 2021:

	Number of Shares			Weighted Average  Exercise Price		Weighted Average Remaining Contractual Terms		Aggregate Intrinsic Value
Outstanding at December 31, 2020		-			-		-		-
Non-qualified stock option granted		14,250		$	4.52		4.00		-
Restricted stock granted		17,000			4.52		4.00		-
Forfeited or expired		(61,000	)		4.52		-		-
Exercised		-			-		-		-
Outstanding at December 31, 2021		31,250		$	4.52		3.79		-
Exercisable at December 31, 2021		-			-		-		-

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price and the exercise price, multiplied by the number of in the money options) that would have been received by the option holders had all options been exercised on December 31, 2021.  

Options were granted to employees during 2021.  Unrecognized compensation cost was $152,003 as of December 31, 2021 and is expected to be recognized over a weighted-average exercise period of 3.74 years. As of December 31, 2021, 500,000 shares of the Company’s common stock were available under the Equity Incentive Plan.