STOCK INCENTIVE PLAN

12 Months Ended

Dec. 31, 2018

Employee Benefits And Share Based Compensation [Abstract]

NOTE 8. STOCK INCENTIVE PLAN

In October 2012, the Company’s Board of Directors adopted and Bimini, then the Company’s sole stockholder, approved, the Orchid Island Capital, Inc. 2012 Equity Incentive Plan (the “Incentive Plan”) to recruit and retain employees, directors and other service providers, including employees of the Manager and other affiliates. The Incentive Plan provides for the award of stock options, stock appreciation rights, stock award, performance units, other equity-based awards (and dividend equivalents with respect to awards of performance units and other equity-based awards) and incentive awards. The Incentive Plan is administered by the Compensation Committee of the Company’s Board of Directors except that the Company’s full Board of Directors will administer awards made to directors who are not employees of the Company or its affiliates. The Incentive Plan provides for awards of up to an aggregate of 10% of the issued and outstanding shares of our common stock (on a fully diluted basis) at the time of the awards, subject to a maximum aggregate 4,000,000 shares of the Company’s common stock that may be issued under the Incentive Plan.

Restricted Stock Awards

The table below presents information related to the Company’s restricted common stock at December 31, 2018 and 2017.

($ in thousands, except per share data)
	2018			2017
			Weighted			Weighted
			Average			Average
			Grant Date			Grant Date
	Shares		Fair Value	Shares		Fair Value
Unvested, beginning of period	-	$	-	8,000	$	12.23
Granted	-		-	-		-
Vested and issued	-		-	(8,000)		12.23
Unvested, end of period	-	$	-	-	$	-

Compensation expense during period		$	-		$	33

Stock Awards

The Company issues immediately vested common stock under the Incentive Plan to certain executive officers and employees of its Manager and to certain directors. The following table presents information related to fully vested common stock issued during the years ended December 31, 2018 and 2017.

($ in thousands, except per share data)
		2018		2017
Fully vested shares granted⁽¹⁾		37,920		29,160
Weighted average grant date price per share	$	7.62	$	9.80
Compensation expense related to fully vested shares of common stock awards⁽²⁾	$	289	$	286

The table above includes 31,816 fully vested shares of common stock which were granted in January and April 2018 with respect to service performed during 2017 and 17,335 fully vested shares common stock which were granted in January and March 2017 with respect to service performed during 2016.
Approximately $244,000 of compensation expense related to the 2018 share awards was accrued and recognized in 2017. Approximately $168,000 of compensation expense related to the 2017 share awards was accrued and recognized in 2016.

Performance Units

The Company may issue performance units under the Incentive Plan to certain executive officers and employees of its Manager. “Performance Units” vest after the end of a defined performance period, based on satisfaction of the performance conditions set forth in the performance unit agreement. When earned, each Performance Unit will be settled by the issuance of one share of the Company’s common stock, at which time the Performance Unit will be cancelled. The Performance Units contain dividend equivalent rights, which entitle the Participants to receive distributions declared by the Company on common stock, but do not include the right to vote the shares. Performance Units are subject to forfeiture should the participant no longer serve as an executive officer or employee of the Company. Compensation expense for the Performance Units is recognized over the remaining vesting period once it becomes probable that the performance conditions will be achieved.

The following table presents information related to Performance Units outstanding during the years ended December 31, 2018 and 2017.

($ in thousands, except per share data)
	2018			2017
			Weighted			Weighted
			Average			Average
			Grant Date			Grant Date
	Shares		Fair Value	Shares		Fair Value
Unvested, beginning of period	41,693	$	9.95	45,305	$	10.33
Granted	27,935		7.45	15,707		9.55
Forfeited	(2,161)		8.49	-		-
Vested and issued	(23,795)		10.09	(19,319)		10.52
Unvested, end of period	43,672	$	8.34	41,693	$	9.95

Compensation expense during period		$	199		$	240
Unrecognized compensation expense, end of period		$	157		$	165
Intrinsic value, end of period		$	279		$	387
Weighted-average remaining vesting term (in years)			1.1			1.0

Deferred Stock Units

Beginning with the second quarter of 2018, non-employee directors received a portion of their compensation in the form of deferred stock unit awards (“DSUs”) pursuant to the Incentive Plan. Each DSU represents a right to receive one share of the Company’s common stock. The DSUs are immediately vested and are settled at a future date based on the election of the individual participant. The DSUs are settled in shares of the Company’s common stock equal to the number of units in the participant’s account at the time of settlement. The DSUs contain dividend equivalent rights, which entitle the participant to receive distributions declared by the Company on common stock. These distributions will be made in the form of additional DSUs or cash at the participant’s election. The DSUs do not include the right to vote the underlying shares of common stock. The cost of these awards is determined by the market value of the shares at the date of grant.

The following table presents information related to the DSUs outstanding during the year ended December 31, 2018.

($ in thousands, except per share data)
			Weighted
			Average
			Grant Date
	Shares		Fair Value
Outstanding, beginning of period	-	$	-
Granted and vested	12,434		7.37
Issued	-		-
Outstanding, end of period	12,434	$	7.37

Compensation expense during period		$	135
Intrinsic value, end of period		$	79