EQUITY COMPENSATION AND EMPLOYEE BENEFIT PLANS

12 Months Ended

Dec. 31, 2021

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, 2021, 351,032 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,
	2021		2020
	(in thousands)
Stock options	$	232	$	268
Restricted stock awards		1,732		1,537
Equity compensation expense	$	1,964	$	1,805

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 and comprehensive income.

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 specified time period.  The exercise price of each option award equals the fair value of the Company’s common stock on the date of grant.  Currently, the vesting period of option awards is 4 years.  Awards are exercisable over a ten-year term, and are forfeited within 30 days after termination for reasons other than death, disability or retirement.  The Company did not grant incentive stock options during 2021 or 2020.  The following table summarizes the stock option activity under the Incentive Plan for the year ended December 31, 2021:

		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, 2020	109,733	$	17.71	—	$	—
Granted	—		—	—		—
Exercised	(547)		17.75	—		2
Cancelled/forfeited	(5,176)		17.28	—		—
Expired	(5,175)		17.28	—		—
Outstanding at December 31, 2021	98,835	$	17.75	7.16	$	211
Exercisable at December 31, 2021	49,140	$	17.75	7.16	$	105

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, 2021 was $19.88.

As of December 31, 2021 approximately $0.3 million of unrecognized compensation cost related to nonvested stock options is expected to be recognized over a weighted-average period of 1.2 years.

Restricted stock awards

Restricted stock awards are shares of the Company’s common stock that are granted subject to defined restrictions.  The 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, and differs by either time-based or performance-based vesting metrics.  Time-based restricted stock awards typically vest over a one or four year term.  Performance-based restricted stock awards are earned based upon the level of attainment by the Company of specified performance objectives as determined by the Executive Compensation Committee of the Board of Directors over a three year performance period.  During 2020, there was a market-based 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, 2021 and 2020 is as follows:

	Number of	Weighted-Average Grant
	Shares	Date Fair Value (1)
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
Granted	239,252		15.28
Forfeited	(58,841)		17.13
Vested	(104,190)		12.02
Nonvested shares – December 31, 2021	553,304	$	11.28

1) The shares were generally 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,
	2021		2020
	(in thousands)
Stock options	$	252	$	354
Restricted stock		1,584		696

As of December 31, 2021, approximately $3.7 million of unrecognized compensation cost related to unvested restricted stock awards is expected to be recognized over a weighted-average period of 2.4 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 $0.7 million for each of the years ended December 31, 2021 and 2020.