Share-Based Compensation

6 Months Ended

Jun. 30, 2024

Share-Based Compensation

Share-Based Compensation

NOTE 14 Share-Based Compensation

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. Since inception, all awards issued under the plan have been restricted stock and restricted stock units. 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. Restricted stock units issued do not participate in dividends and recipients are not entitled to vote these restricted stock units until shares of the Company’s common stock are delivered after vesting of the restricted stock units. 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. Awards issued to Company directors are not subject to any service requirements and vest immediately. The plan authorizes the issuance of up to 1,100,000 shares of common stock. As of June 30, 2024, 687,308 shares of common stock are still available for issuance under the plan.

The compensation expense relating to awards under these plans was $121 thousand and $656 thousand for the three months ended June 30, 2024 and 2023, respectively. The compensation expense relating to awards under these plans was $714 thousand and $815 thousand for the six months ended June 30, 2024 and 2023, respectively.

The following table presents the activity in the stock plans for the six months ended June 30, 2024 and 2023:

	Six months ended June 30,
	2024			2023
		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	231,657	$	22.96	238,929	$	23.66
Granted	90,585		21.33	82,810		20.85
Vested	(39,335)		25.71	(91,867)		21.29
Forfeited or cancelled	—		—	(22,204)		21.39
Outstanding at end of period	282,907	$	22.03	207,668	$	23.83

As of June 30, 2024, there was $3.4 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 2.3 years.