NOTE 8 — EQUITY INCENTIVES

In 2006, the Board and shareholders of the Company approved the 2006 Equity Incentive Plan (“2006 Plan”), and in May 2010, our shareholders approved an amendment and restatement of the 2006 Plan increasing the number of shares that may be issued under the plan by 4,500,000 shares to 9,600,000 shares and extend the expiration date of the 2006 Plan to May 2020, as well as making other technical changes related to tax law and accounting rule changes, and to make administrative clarifying changes. In June 2016, our shareholders approved an additional amendment to the 2006 Plan increasing the number of shares that may be issued under the plan by 5,000,000 shares to 14,600,000 shares. In June 2019, our shareholders approved an amendment and restatement of the 2006 Plan increasing the number of shares that may be issued under the plan by 6,500,000 shares to 21,100,000 shares. The 2006 Plan authorizes the Board, or a committee of the Board, to issue or transfer up to an aggregate of 21,100,000 shares of common stock, of which 7,855,920 remain available for issuance as of March 31, 2020. Awards under the 2006 Plan may include incentive stock options, non-statutory stock options, restricted stock units, restricted stock awards, and stock appreciation rights (“SARs”). At the option of the Board, SARs may be settled with cash, shares, or a combination of cash and shares. The Company settles the exercise of other stock-based compensation with newly issued common shares.

Stock-based compensation cost is estimated at the grant date based on the award’s fair value as calculated by the Black-Scholes option pricing model and is recognized as compensation ratably on a straight-line basis over the requisite vesting/service period. As of March 31, 2020, there was $0.4 million of total unrecognized compensation cost related to share-based compensation arrangements, which is expected to be recognized over a weighted-average period of 1.4 years.

Stock Options and Stock Appreciation Rights

All stock options and SARs are approved by the Board prior to or on the date of grant. Stock options and SARs are granted at an exercise price equal to or greater than the Company’s closing stock price on the date of grant. Both award types vest over a period of zero to three years with a contractual term of five years after vesting. The Company estimates the fair value of stock options and SARs using the Black-Scholes valuation model. Key inputs and assumptions used to estimate the fair value of stock options and SARs include the grant price of the award, expected option term, volatility of the Company’s stock, the risk-free rate and the Company’s dividend yield.

At March 31, 2020, the outstanding and exercisable (fully vested) SARs had an aggregate intrinsic value of nil and had a weighted-average remaining contractual term of 1.1 years. No SARs were exercised during the three months ended March 31, 2020.

Restricted Stock Units and Stock Awards

Grants of restricted stock units and stock awards (“Stock Awards”) have been granted as performance based awards, earned over a required service period, or to Board members and the Company Secretary without any service requirement. Performance based grants are recognized as compensation based on the probable outcome of achieving the performance condition. Stock Awards issued to members of the Board of Directors and the Company Secretary that are fully vested at the time of issuance are recognized as compensation upon grant of the award.

The compensation expense recognized by the Company for Stock Awards is based on the closing market price of the Company’s common stock on the date of grant. For the three months ended March 31, 2020, the weighted-average grant date fair value for Stock Awards was $0.24. The total fair value of stock awards vested during the three months ended March 31, 2020 is $0.1 million.

Summary of Equity Incentive Awards

The following table summarizes activity under the Plans during the three months ended March 31, 2020:


	SARs			Stock Awards
	Weighted		Number	Weighted
	Average		of Shares	Average
	Strike		Under	Grant		Number of
	Price		Option	Price		Shares
Balance at January 1, 2019	$	3.19	938,667	$	1.18	2,401,268
Awards Granted		—	—		0.24	135,000
Awards Exercised or Earned		—	—		0.38	(2,115,000)
Awards Forfeited		—	—		—	—
Awards Expired		2.56	(28,830)		—	—
Balance at December 31, 2019	$	3.21	909,837	$	4.90	421,268

Exercisable at December 31, 2019	$	1.69	27,693

	SARs			Stock Awards
	Weighted		Number	Weighted
	Average		of Shares	Average
	Strike		Under	Grant		Number of
	Price		Option	Price		Shares
Balance at January 1, 2020	$	3.21	909,837	$	4.90	421,268
Awards Granted		—	—		0.24	2,569,000
Awards Exercised or Earned		—	—		0.38	(369,000)
Awards Forfeited		—	—		—	—
Awards Expired		—	—		—	—
Balance at March 31, 2020	$	3.21	909,837	$	0.99	2,621,268

Exercisable at March 31, 2020	$	1.69	27,693

A summary of the status of the non-vested awards as of March 31, 2020 and changes during the three months there ended is presented below:


	SARs			Stock Awards
	Weighted		Number	Weighted
	Average		of Shares	Average
	Fair		Under	Fair		Number of
	Value		Option	Value		Shares
Balance at January 1, 2019	$	3.25	892,896	$	1.44	1,735,553
Awards Granted		—	—		0.39	2,145,000
Awards Vested or Earned		—	—		0.30	(1,435,000)
Awards Forfeited		1.15	(10,752)		1.46	(44,285)
Balance at March 31, 2019	$	3.26	882,144	$	1.18	2,401,268

	Weighted		Number	Weighted
	Average		of Shares	Average
	Fair		Under	Fair		Number of
	Value		Option	Value		Shares
Balance at January 1, 2020	$	3.26	882,144	$	1.18	2,401,268
Awards Granted		—	—		0.24	135,000
Awards Vested or Earned		—	—		0.38	(2,115,000)
Awards Forfeited		—	—		—	—
Balance at March 31, 2020	$	3.26	882,144	$	4.90	421,268
Balance at December 31, 2020