EQUITY COMPENSATION AND EMPLOYEE BENEFIT PLANS

12 Months Ended

Dec. 31, 2020

EQUITY COMPENSATION AND EMPLOYEE BENEFIT PLANS

EQUITY COMPENSATION AND EMPLOYEE BENEFIT PLANS

NOTE 9. EQUITY COMPENSATION AND EMPLOYEE BENEFIT PLANS

The Company adopted the 2014 Omnibus Incentive Plan (the “Incentive Plan”) in May 2014.  The Incentive Plan replaced the 2004 Equity Incentive Plan and provided for the granting of up to 500,000 shares of common stock through equity-based awards to directors, officers and other key employees and consultants.  The First Amendment to the Incentive Plan was adopted in May 2017, which, among other things, increased the number of shares of common stock available for issuance under the Incentive Plan by an additional 500,000 shares.  The Second Amendment to the Incentive Plan was adopted in May 2019, which, among other things, increased the number of shares of common stock available for issuance under the Incentive Plan by an additional 500,000 shares.  As of December 31, 2020, 513,343 shares remain available under the Incentive Plan for the issuance of future equity-based compensation awards.

The components of compensation expense recognized, net of forfeiture recoveries, related to equity-based compensation is reflected in the table below for the years indicated:

	Year Ended December 31,
	2020		2019
	(in thousands)
Stock options	$	268	$	299
Restricted stock awards		1,537		1,415
Equity compensation expense	$	1,805	$	1,714

Compensation expense related to all equity-based compensation awards granted under the Incentive Plan is included in salaries, wages and employee benefits in the accompanying consolidated statements of income (loss) and comprehensive income (loss).

Stock options

Stock options are the contingent right of award holders to purchase shares of the Company’s common stock at a stated price for a limited time.  The fair value of each option award is estimated on the date of grant using the Black-Scholes-Merton option-pricing formula, and is recognized over the vesting period of the award.  Historically, the vesting period of option awards has been 3 or 4 years and awards are exercisable over a three to ten year term.  The Company granted incentive stock options during 2019.  The following table summarizes the stock option activity under the Incentive Plan for the year ended December 31, 2020:

		Weighted-		Weighted-	Aggregate
		Average		Average	Intrinsic
		Exercise		Remaining	Value (in
	Number of	Price Per		Contractual	thousands)
	Shares	Share		Life (in years)	(1)
Options outstanding at December 31, 2019	154,223	$	17.72	9.17	$	—
Granted (2)	—		—	—		—
Exercised	—		—	—		—
Cancelled/forfeited	(33,367)		17.75	—		—
Expired	(11,123)		17.75	—		—
Outstanding at December 31, 2020 (3)	109,733	$	17.71	8.16	$	—
Exercisable at December 31, 2020	27,429	$	17.71	8.16	$	—

1) The intrinsic value of a stock option is the amount by which the market value of the underlying stock exceeds the exercise price of the option.  The per share market value of the Company’s common stock, as determined by the closing price on December 31, 2020 was $8.93.

2) The weighted-average grant date fair value of options granted during 2019 was $9.12.

3) The exercise prices of outstanding options granted range from $13.54 to $17.75 as of December 31, 2020.

As of December 31, 2020 approximately $0.5 million of unrecognized compensation cost related to nonvested stock options is expected to be recognized over a weighted-average period of 2.2 years.

Restricted stock awards

Restricted stock awards are shares of the Company’s common stock that are granted subject to defined restrictions.  The estimated fair value of restricted stock awards is based upon the closing price of the Company’s common stock on the date of grant.  The vesting period of restricted stock awards is ratably over a determined number of years, which has historically been three or four years.  During 2020, there was a restricted stock award granted subject to a two year vesting period and a performance element.  The fair value of this grant was determined using a Monte Carlo simulation.

Information related to the restricted stock awarded for the years ended December 31, 2020 and 2019 is as follows:

	Number of	Weighted-Average Grant
	Shares	Date Fair Value (1)
Nonvested shares – December 31, 2018	251,869	$	17.99
Granted	283,077		16.91
Forfeited	(84,620)		16.36
Vested	(61,084)		21.92
Nonvested shares – December 31, 2019	389,242	$	16.94
Granted	323,915		3.93
Forfeited	(107,968)		11.86
Vested	(128,106)		13.60
Nonvested shares – December 31, 2020	477,083	$	10.16

1) The shares were valued at the closing price of the Company’s common stock on the date(s) specified by the award agreements.

The fair value of stock options and restricted stock that vested during the year is as follows for the periods indicated:

	Year Ended December 31,
	2020		2019
	(in thousands)
Stock options	$	354	$	—
Restricted stock		696		815

As of December 31, 2020, approximately $2.1 million of unrecognized compensation cost related to unvested restricted stock awards is expected to be recognized over a weighted-average period of 2.2 years.

Employee benefit plans

The Company sponsors the USA Truck, Inc. Employees’ Investment Plan, a tax deferred savings plan under section 401(k) of the Internal Revenue Code that covers substantially all team members.  Employees can contribute up to any percentage of their compensation, subject to statutory limits, with the Company matching 50% of the first 4% of compensation contributed by each employee.  Employees’ rights to employer contributions vest after two years from their date of employment.  The Company’s matching contributions to the plan were approximately $0.6 million and $0.7 million for the years ended December 31, 2020 and 2019.