Share-Based Compensation

12 Months Ended

Dec. 31, 2022

Share-Based Compensation

Share-Based Compensation

NOTE 17 Share-Based Compensation Plan

On May 6, 2019, the Company’s stockholders approved the Alerus Financial Corporation 2019 Equity Incentive Plan. This plan allows 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 that 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 December 31, 2022, 922,010 shares of common stock are still available for issue under the plan.

Amounts granted under the plans have been retroactively adjusted for all stock splits effected in the form of dividends. Activity in the stock plan for the years ended December 31, 2022, and 2021 was as follows:

	Year ended December 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	102,265		25.44	66,664		26.63
Vested	(113,562)		19.25	(104,119)		20.51
Forfeited or cancelled	(11,067)		23.90	(26,725)		18.03
Outstanding at end of period	238,486	$	23.65	260,850	$	21.04

Unrecognized compensation expense related to share-based awards was $2.5 million and $2.2 million as of December 31, 2022 and 2021, respectively. The expense is expected to be recognized over a weighted-average period of 2.7 and 2.9 years, as of December 31, 2022 and 2021, respectively.

Compensation expense relating to stock awards under these plans was $1.9 million in 2022, $3.1 million in 2021, and $1.9 million in 2020. The number of unvested shares outstanding was 128,267 and 140,228 respectively, at December 31, 2022 and 2021. The number of unvested units outstanding was 110,219 and 120,622 at December 31, 2022 and 2021, respectively.