Share-Based Compensation

3 Months Ended

Mar. 31, 2023

Share-Based Compensation

Share-Based Compensation

NOTE 12 Share-Based Compensation

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, 2023, 828,400 shares of common stock are still available for issuance under the plan.

The compensation expense relating to awards under these plans was $159 thousand and $378 thousand for the three months ended March 31, 2023, and 2022, respectively.

The following table presents the activity in the stock plans for the three months ended March 31, 2023, and 2022:

	Three months ended March 31,
	2023			2022
		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	238,929	$	23.66	260,850	$	21.04
Granted	82,810		20.85	70,850		28.39
Vested	(91,867)		21.29	(96,618)		18.66
Forfeited or cancelled	(22,204)		21.39	(2,209)		22.75
Outstanding at end of period	207,668	$	23.83	232,873	$	23.33

As of March 31, 2023, there was $3.3 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 2.6 years.