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Note 8 - Stock Based Compensation
9 Months Ended
Sep. 30, 2021
Notes to Financial Statements  
Share-based Payment Arrangement [Text Block]

NOTE 8 STOCK BASED COMPENSATION

 

The Company is authorized to issue up to 4.7 million shares of common stock under the 2021 Long-Term Incentive Plan (“the Plan”) which was approved by shareholders in June 2021. As of September 30, 2021, approximately 3.9 million shares were available to be granted under the Plan.

 

As of September 30, 2021 and December 31, 2020, options to purchase an aggregate of 1.5 million and 510,000 shares of the Company’s common stock, respectively, with a weighted average exercise price of $14.37 and $10.30, respectively, were outstanding. As of September 30, 2021, 188,000 options were exercisable.

 

The Company recorded stock-based compensation expense of $1.4 million and $4.1 million during the three and nine months ended September 30, 2021, respectively, and $0.3 million and $1.9 million during the three and nine months ended September 30, 2020, respectively.

 

2021 Long-Term Incentive Compensation

 

During the nine months ended September 30, 2021, the Company granted 224,506 restricted stock units ("RSUs") with a weighted average grant price of $17.45. The RSUs will primarily vest equally over three years on the anniversary of the grant date, subject to the recipient’s continued employment or service with the Company on the applicable vesting date. The number of shares were determined based upon the closing price of our common stock on the date of the award.

 

During the nine months ended September 30, 2021, the Company awarded 50,072 market performance share units (“MSUs”) with a weighted average grant price of $18.90. The MSUs are market-based equity incentive awards based on a performance-multiplier of change in the stock price of the Company’s common stock between the grant date and March 31, 2024. The number of shares that will eventually be earned and vest may be more or less then the number of MSUs that are awarded, depending on the Company's common stock price, at a level ranging from 0% to 150%. The number of MSUs earned shall be determined and shall vest on March 31, 2024.

 

As a new grant under his compensation agreement, the Company granted to Mr. Berle, the Company’s new Chief Executive Officer, 1.0 million options on May 10, 2021 and, after Mr. Berle purchased a required amount of the Company’s common stock in the open market, as specified in this compensation agreement, granted 58,452 RSUs to him on June 3, 2021. The options were granted with an exercise price of $16.38, and vest ratably over five years and the RSUs were granted with a weighted average grant price of $17.33 and vest ratably over five years.

 

Natural Habitat Contingent Arrangement

 

In connection with the acquisition of Natural Habitat, Mr. Bressler, the founder of Natural Habitat, has an equity incentive opportunity to earn an award of options based on the future financial performance of Natural Habitat, where if the Final Year Equity Value of Natural Habitat, as defined in Mr. Bressler's amended employment agreement, exceeds $25 million, effective as of December 31, 2023, Mr. Bressler will be granted options with a fair value equal to 10.1% of such excess, subject to certain conditions.

 

Other

 

Mr. Lawrence, President of Off the Beaten Path, was issued 1,007 profit interest units in the equity of Off the Beaten Path as part of the acquisition. The profit interest units had a $132.86 per share grant date fair value and are considered vested upon issuance. The Company recorded $0.1 million in stock-based compensation expense related to the value of these profit units for the nine months ended September 30, 2021, included in the Company’s total stock-based compensation disclosed above.