Share-Based Compensation Plan

3 Months Ended

Mar. 31, 2022

Share-Based Compensation Plan

Share-Based Compensation Plan

NOTE 11 Share-Based Compensation

Before May 6, 2016, the Company granted equity awards pursuant to the Alerus Financial Corporation 2009 Stock Plan. The awards were in the form of restricted stock or restricted stock units and represent an element of employee compensation. The Related compensation expense for the awards is based on the fair value of Alerus Financial Corporation common stock at the time of grant. The value of awards that are expected to vest is amortized as an expense over the applicable vesting periods. The ability to grant awards under this plan has expired.

On May 6, 2019, the Company’s stockholders approved the Alerus Financial Corporation 2019 Equity Incentive Plan. This plan gives the compensation committee the ability to grant a wide variety of equity awards, including stock options, stock appreciation rights, restricted stock, restricted stock units and cash incentive awards in such forms and amounts as it deems appropriate to accomplish the goals of the plan. Any shares subject to an award that is cancelled, forfeited, or expires prior to exercise or realization, either in full or in part, shall again become available for issuance under the plan. However, shares subject to an award shall not again be made available for issuance or delivery under the plan if such shares are (a) tendered in payment of the exercise price of a stock option, (b) delivered to, or withheld by, the Company to satisfy any tax withholding obligation, or (c) covered by a stock-settled stock appreciation right or other awards and were not issued upon the settlement of the award. Shares vest, become exercisable and contain such other terms and conditions as determined by the compensation committee and set forth in individual agreements with the participant receiving the award. The plan authorizes the issuance of up to 1,100,000 shares of common stock. As of March 31, 2022, 948,428 shares of common stock are still available for issuance under the plan.

The compensation expense relating to awards under these plans was $378 thousand and $498 thousand for the three months ended March 31, 2022 and 2021, respectively.

The following table presents the activity in the stock plans for the three months ended March 31, 2022 and 2021:

	Three months ended March 31,
	2022			2021
		Weighted-			Weighted-
		Average Grant			Average Grant
	Awards	Date Fair Value		Awards	Date Fair Value
Restricted Stock and Restricted Stock Unit Awards
Outstanding at beginning of period	260,850	$	21.04	325,030	$	19.48
Granted	70,850		28.39	59,374		26.36
Vested	(96,618)		18.66	(81,092)		20.72
Forfeited or cancelled	(2,209)		22.75	—		—
Outstanding at end of period	232,873	$	23.33	303,312	$	20.49

As of March 31, 2022, there was $3.1 million of unrecognized compensation expense related to non-vested awards granted under the plans. The expense is expected to be recognized over a weighted-average period of 2.9 years.