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Stock Options and Award Programs
 12 Months Ended
Dec. 31, 2021
Stock Options and Award Programs  
Stock Options and Award Programs

16. Stock Options and Award Programs

 

The Company’s stock incentive plan is administered by the Compensation Committee and authorizes the grant or award of incentive stock options, non-qualified stock options (NQSO), restricted stock awards (RSA), stock appreciation rights, dividend equivalent rights, performance unit awards and phantom shares. The Company issues new shares of common stock upon the exercise of stock options. Any shares associated with options forfeited are added back to the number of shares that underlie stock options to be granted under the stock incentive plan. The Company has issued restricted stock awards and non-qualified stock option awards as described below.

Valuation of Stock Awards

 

Restricted Stock. The Company records the fair value of all restricted stock awards based on the grant date fair value and amortizes stock compensation on a straight-line basis over the vesting period. Restricted stock award shares are issued when granted and included in the total number of common shares issued and outstanding. During the years ended December 31, 2021 and 2020, the Company granted 231,873 RSAs and 66,274 RSAs, respectively.

 

Non-Qualified Stock Options. The Company estimates the fair value of nonqualified stock awards using a Black-Scholes Option Pricing model (“Black-Scholes model”). The fair value of each stock award is estimated on the date of grant using the Black-Scholes model, which requires an assumption of dividend yield, risk free interest rates, volatility, forfeiture rates and expected option life. The risk-free interest rates are based on the U.S. Treasury yield for a period consistent with the expected term of the option in effect at the time of the grant. Expected volatilities are based on the historical volatility of our common stock over the expected option term. The expected term of options granted is based on analyses of historical employee termination rates and option exercises. The Company did not grant NQSOs during the years ended December 31, 2021 and 2020.

 

Restricted Stock Awards

 

A summary of RSA activity as of December 31, 2021 and 2020, and changes for the years then ended are set forth below:

 

 

 

2021

 

 

2020

 

NON-VESTED AWARDS

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-vested awards outstanding, January 1,

 

 

173,748

 

 

 

50,750

 

Granted (+)

 

 

83,326

 

 

 

231,873

 

Cancelled (-)

 

 

-

 

 

 

-

 

Vested (-)

 

 

135,758

 

 

 

108,875

 

Non-vested awards outstanding, December 31,

 

 

121,316

 

 

 

173,748

 

 

 

 

 

 

 

 

 

 

Weighted-average remaining contractual life (in years)

 

 

0.9

 

 

 

1.2

 

 

 

 

 

 

 

 

 

 

Unamortized RSA compensation expense

 

$338,263

 

 

$362,426

 

 

 

 

 

 

 

 

 

 

Aggregate intrinsic value of RSAs non-vested, December 31

 

$476,772

 

 

$1,683,618

 

 

 

 

 

 

 

 

 

 

Aggregate intrinsic value of RSAs vested, December 31

 

$1,388,903

 

 

$708,920

 

Non-Qualified Stock Option Awards

 

A summary of NQSO activity as of December 31, 2021 and 2020, and changes during the years then ended are set forth below:

 

 

 

2021

 

 

2020

 

 

 

 

 

 

Weighted

 

 

 

 

 

Weighted

 

 

 

 

 

 

Average

 

 

 

 

 

Average

 

 

 

 

 

 

Grant Date

 

 

 

 

 

Grant Date

 

NON-VESTED AWARDS

 

Shares

 

 

Fair Value

 

 

Shares

 

 

Fair Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-vested balances, January 1,

 

 

52,500

 

 

$3.93

 

 

 

84,166

 

 

$3.81

 

Cancelled (-)

 

 

-

 

 

 

-

 

 

 

1,666

 

 

$2.60

 

Vested/Excercised (-)

 

 

27,500

 

 

$0.00

 

 

 

30,000

 

 

$3.68

 

Non-vested balances, December 31,

 

 

25,000

 

 

$3.98

 

 

 

52,500

 

 

$3.93

 

 

 

 

2021

 

 

2020

 

 

 

 

 

 

Weighted

 

 

 

 

 

Weighted

 

 

 

 

 

 

Average

 

 

 

 

 

Average

 

OUTSTANDING AND EXERCISABLE AWARDS

 

Shares

 

 

Exercise Price

 

 

Shares

 

 

Exercise Price

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Awards outstanding, January 1,

 

 

187,334

 

 

$5.66

 

 

 

350,833

 

 

$5.89

 

Cancelled (-)

 

 

834

 

 

$4.60

 

 

 

11,666

 

 

$4.47

 

Expired (-)

 

 

5,000

 

 

$13.04

 

 

 

49,333

 

 

$6.03

 

Exercised (-)

 

 

41,500

 

 

$4.38

 

 

 

102,500

 

 

$6.40

 

Awards outstanding, December 31,

 

 

140,000

 

 

$3.54

 

 

 

187,334

 

 

$5.66

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Awards vested and expected to vest,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

140,000

 

 

$5.79

 

 

 

186,197

 

 

$5.67

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Awards outstanding and exercisable,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

115,000

 

 

$5.63

 

 

 

134,834

 

 

$5.37

 

The weighted-average remaining contractual life and the aggregate intrinsic value (the amount by which the fair value of the Company’s stock exceeds the exercise price of the option) of the stock options outstanding, exercisable, and vested and expected to vest as of December 31, 2021 are as follows:

 

 

 

 

 

 

Vested and

 

 

Outstanding

 

 

 

 

 

 

Expected to

 

 

and

 

 

 

Outstanding

 

 

Vest

 

 

Exercisable

 

 

 

 

 

 

 

 

 

 

 

Weighted-average remaining contractual life (in years)

 

 

0.83

 

 

 

0.83

 

 

 

0.89

 

Aggregate intrinsic value

 

$-

 

 

$-

 

 

$-

 

 

Stock Compensation Expense

 

Share-based compensation recognized under ASC 718-10 (including restricted stock awards) represents both stock options based expense and stock grant expense. The Company recognized share-based compensation expense for the years then ended December 31 as set forth below:

 

 

 

YEAR ENDED DECEMBER 31, 2021

 

 

YEAR ENDED DECEMBER 31, 2020

 

 

 

Shared-Based Compensation Expense

 

 

Shared-Based Compensation Expense

 

 

 

Employees

 

 

Directors

 

 

Total

 

 

Employees

 

 

Directors

 

 

Non-Employees

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restricted stock compensation expense

 

$539,658

 

 

$264,534

 

 

$804,192

 

 

$375,122

 

 

$329,851

 

 

$-

 

 

$704,973

 

Non-qualified option stock compensation expense

 

 

79,571

 

 

 

-

 

 

 

79,571

 

 

 

98,789

 

 

 

-

 

 

 

6,519

 

 

 

105,308

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total share-based compensation before taxes

 

$619,229

 

 

$264,534

 

 

$883,763

 

 

$473,911

 

 

$329,851

 

 

$6,519

 

 

$810,281