Note G - Stock-based Compensation

12 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

Note G — Stock-Based Compensation

We maintain stock incentive plans for the benefit of certain officers, directors, and employees. Our stock incentive plans provide for the ability to issue stock options, cash stock appreciation rights, performance stock units, phantom stock units and cash performance stock units. Our cash stock appreciation rights, phantom stock units and cash performance stock units settle solely in cash and are treated as the current liability, which are adjusted each reporting period based on changes in our stock price.

Compensation expense for stock-based awards is based on the fair values of the awards on the date of grant and is recognized on a straight-line basis over the vesting period of the entire award in the “Labor” line of the Consolidated Statements of Comprehensive Income. We recognized $2.4 million and $1.5 million of stock-based compensation expense for the years ended December 31, 2022 and 2021, respectively.

In May 2013, our stockholders approved the 2013 Omnibus Incentive Plan (“2013 Plan”), pursuant to which we may issue up to 500,000 shares of stock-based awards to directors, employees, and consultants, as adjusted for the reverse stock split. The 2013 Plan replaced the stockholder-approved 2005 Omnibus Incentive Plan (“2005 Plan”), pursuant to which we issued equity securities to directors, officers, and key employees. No additional stock-based awards will be granted under the 2005 Plan, but awards previously granted under the 2005 Plan will remain outstanding in accordance with their respective terms. In August 2018, we filed a Form S-8 to increase the total registered shares under 2013 Plan to 553,673 shares. As of December 31, 2022 and 2021, there were 188,582 and 188,285 shares available, respectively, for grant under the 2013 Plan.

In 2020, we established our 2020 Equity Incentive Plan ("2020 Plan") which replaced the 2013 Equity Incentive Plan (“2013 Plan”). Any shares of common stock that remained eligible for issuance under the 2013 Plan are now instead eligible for issuance under the 2020 Plan.   In August 2020, we filed a Form S-8 to register up to an aggregate of 2,521,244 shares that may be issued under the 2020 Plan.  The 2020 Plan provides for the issuance of stock-based awards to directors, employees and consultants. No additional stock-based awards will be granted under the 2013 Plan, but awards previously granted under the 2013 Plan will remain outstanding in accordance with their respective terms.  As of December 31, 2022 and 2021, there were 1.3 million and 1.6 million shares  available, respectively, for grant under the 2020 Plan.

We granted equity awards to our Chief Executive Officer and Chief Operating Officer in 2021, as a material inducement for acceptance of such positions. These options, restricted stock, and performance unit awards were not issued under the 2020 Plan and were not submitted for stockholder approval.

Stock Options

Options granted under the 2020 Plan, 2013 Plan or as inducement awards have an exercise price equal to the market value of the common stock on the grant date.  These options become exercisable in 25% increments on the first four anniversaries of their date of grant and expire on the tenth anniversary of their date of grant.  There were no options outstanding under the 2020 plan as of  December 31, 2022 and 2021.

Options to purchase 8,268 shares granted under 2013 Plan awards were outstanding as of  December 31, 2022, with exercise prices ranging from $76.80 to $115.20 per share. There were no inducement award options outstanding as of  December 31, 2022 and 2021.

Options under the 2005 Plan were granted at exercise prices equal to the market value of the common stock on the grant date. All such awards have met their respective vesting dates. Options to purchase 4,400 shares were outstanding under the 2005 Plan as of December 31, 2022, with exercise prices ranging from $76.80 to $115.20 per share.  Options to purchase 29,050 shares were outstanding under the 2005 Plan as of December 31, 2021, with exercise prices ranging from $76.80 to $184.65 per share.  

Options granted to officers after April 2015 vest in full upon a change in control if such options are not assumed or replaced by a publicly traded successor with an equivalent award (as defined in such officers’ change in control severance agreements). 

The following summarizes all stock option activity during the years ended December 31, 2022 and 2021:

						Weighted- Average
				Weighted-		Remaining		Aggregate
	Number of			Average		Contractual		Intrinsic Value
In thousands	Shares			Exercise Price		Term (Years)		(Thousands)
Options outstanding at December 31, 2020		87,747		$	40.25
Adjustment and Correction		—			—
Granted in 2021		—			—
Exercised in 2021		(31,906	)		2.95				—
Unvested options forfeited in 2021		(7,411	)		7.40
Vested options expired in 2021		(10,815	)		37.87
Options outstanding at December 31, 2021		37,615		$	80.21		1.36
Adjustment & Correction		(20,000	)
Granted in 2022		—			—
Exercised in 2022		—							—
Unvested options forfeited in 2022		—
Vested options expired in 2022		(4,947	)		95.80
Options outstanding at December 31, 2022		12,668		$	78.88		1.16		—
Vested and expected to vest at December 31, 2022		12,668		$	78.88		1.16		—
Exercisable at December 31, 2022		12,668		$	78.88		1.16		—

The aggregate intrinsic value at year end in the table above represents the total pre-tax intrinsic value that would have been received by the option holders if all of the in-the-money options were exercised on December 31, 2022. The pre-tax intrinsic value is the difference between the closing price of our common stock on December 31, 2022 and the exercise price for each in-the-money option. This value fluctuates with the changes in the price of our common stock.

The following table summarizes information about stock options outstanding at December 31, 2022:

Range of	Number		Weighted-Average		Weighted-Average Remaining Life		Number		Weighted-Average
Exercise Prices	Outstanding		Exercise Price		(Years)		Exercisable		Exercise Price
$76.80 - 115.20		12,668	$	78.88		1.16		12,668	$	78.88

No options were granted during 2022 and 2021.  As of December 31, 2022, there was no unrecognized compensation cost related to unvested stock options. 

Cash Stock Appreciation Rights

In 2016 and 2017, the Board of Directors approved grants of cash settling stock appreciation rights under the 2013 Plan. Cash stock appreciation rights vest in 25% increments on the first four anniversaries of the date of grant and expire after 10 years. Cash stock appreciation rights settle solely in cash and are treated as a liability.

There were no cash stock appreciation rights issued during 2022 and 2021.

The fair value of each cash stock appreciation right is estimated on the date of grant using the Black-Scholes Option-Pricing Model and is revalued at the end of each period. Changes in fair value are recorded to the income statement as changes to expense. As of December 31, 2022, there was no unrecognized compensation cost related to unvested cash stock appreciation right grants.

Restricted Stock Units

Restricted stock units granted as inducement awards or under the 2020 Plan and 2013 Plan vest in three equal increments on the first three anniversaries of their date of grant. Restricted stock units settle in treasury stock or newly issued shares and are treated as equity. Outstanding restricted stock units granted to officers as inducement awards or under the 2013 Plan vest in full (to the extent not previously vested) upon a change in control if such unvested shares are not assumed or replaced by a publicly traded successor with an equivalent award (as such terms are defined in such officers’ change-in-control severance agreements).

The following summarizes all restricted stock units’ activity during 2022 and 2021:

				Weighted-
	Number of			Average Grant
	Shares			Date Fair Value
Unvested shares outstanding at December 31, 2020		789,709		$	2.22
Granted in 2021		500,890			5.72
Vested in 2021		(396,407	)		3.00
Forfeited in 2021		(247,753	)		2.35
Unvested shares outstanding at December 31, 2021		646,439			4.41
Adjustment and Correction		40,000
Granted in 2022		208,165			8.93
Vested in 2022		(296,161	)		4.85
Forfeited in 2022		(82,267	)		3.29
Unvested shares outstanding at December 31, 2022		516,176			6.43

The fair value of each restricted stock unit is estimated on the date of grant as the closing market price of our common stock on the date prior to the grant.  As of December 31, 2022, there was $2.4 million of total unrecognized compensation cost related to restricted stock units. This cost is expected to be recognized over a weighted average period of approximately 1.89 years.

Phantom Stock Units

In 2016 and 2017, the Board of Directors approved grants of phantom stock units under the 2013 Plan. Phantom stock units vest in 25% increments on the first four anniversaries of the date of grant. Phantom stock units settle solely in cash and are treated as a liability. Grants of phantom stock units made to officers under the 2013 Plan vest in full (to the extent not previously vested) upon a change in control if they are not assumed or replaced by a publicly traded successor with an equivalent award (as such terms are defined in such officers’ change-in-control severance agreements).

The following summarizes all phantom stock unit activity during 2022 and 2021:

				Weighted-
	Number of			Average Grant
	Units			Date Fair Value
Phantom stock units outstanding as of December 31, 2020		4,346		$	9.70
Granted in 2021		—			—
Vested in 2021		(4,146	)		9.70
Forfeited in 2021		(200	)		9.70
Phantom stock units outstanding as of December 31, 2021		—			—

The fair value of each phantom stock unit is estimated on the date of grant as the closing market price of our common stock on the date prior to the grant. Changes in our stock price will result in adjustments to compensation expense and the corresponding liability over the applicable service period. As of December 31, 2022, there was no unrecognized compensation cost related to phantom stock units. 

Performance Stock Units

Performance stock units are a form of share-based award similar to unvested shares, except that the number of shares ultimately issued is based on our performance against specific performance goals over a roughly three-year period. At the end of the performance period, the number of shares of stock issued will be determined in accordance with the specified performance target(s) in a range between 0% and 100%. Performance stock units vest solely in common stock and are treated as equity. Upon a change in control, performance stock units granted to officers vest on a pro-rated basis (based on time elapsed from the grant) to the extent not previously settled if they are not assumed or replaced by a publicly traded successor with an equivalent award (as such terms are defined in such officers’ change-in-control severance agreements).  Performance Stock Units have been issued under the 2013 Plan, and the 2020 Plan as inducement awards.

The following summarizes all performance stock unit activity during 2022 and 2021:

				Weighted-
	Number of			Average Grant-
	Units			Date Fair Value
Performance stock units outstanding as of December 31, 2020		32,268		$	4.14
Granted in 2021		75,000			5.59
Settled in 2021		(13,158	)		3.30
Forfeited in 2021		—
Performance stock units outstanding as of December 31, 2021		94,110		$	5.41
Granted in 2022		117,000			7.77
Settled in 2022		(69,110	)		5.44
Forfeited in 2022		—
Performance stock units outstanding as of December 31, 2022		142,000			7.34

The fair value of each performance stock unit is estimated on the date of grant as the closing market price of our common stock on the date prior to the grant, minus the present value of anticipated dividend payments. Periodic compensation expense is based on the current estimate of future performance against specific performance goals over a three-year period and is adjusted up or down based on those estimates. As of December 31, 2022, the total unrecognized compensation cost related to performance stock units was approximately $637,040.  This cost is expected to be recognized over a weighted average period of approximately 1.17 years.

Cash Performance Stock Units

In 2016 and 2017, the Board of Directors approved grants of cash performance stock units under the 2013 Plan. Cash performance stock units are a form of share-based award similar to phantom stock units, except that the number of units ultimately issued is based on our performance against specific performance goals measured after a three-year period. At the end of the performance period, the number of units vesting will be determined in accordance with specified performance target(s) in a range between 0% and 100%. Cash performance stock units settle solely in cash and are treated as a liability. Upon a change in control, cash performance stock units granted to officers, vest on a pro-rated basis (based on time elapsed from the grant) to the extent not previously settled if they are not assumed or replaced by a publicly traded successor with an equivalent award (as such terms are defined in such officers’ change-in-control severance agreements).

There was no cash performance stock unit issued during 2022 and 2021.

The fair value of each cash performance stock unit is estimated on the date of grant as the closing market price of our common stock on the date prior to the grant, minus the present value of anticipated dividend payments. Periodic compensation expense is based on the current estimate of future performance against specific performance goals over a three-year period and is adjusted up or down based on those estimates. As of December 31, 2022, there was no unrecognized compensation cost related to cash performance stock units.