Note 14 – Stock‑Based Compensation

Prior to July 25, 2018, the Company issued stock‑based compensation awards to its directors and employees under the 2008 Long‑Term Incentive Plan (“2008 LTIP”). The 2008 LTIP permitted the grant of non‑qualified and incentive stock options, stock appreciation rights, full value awards and cash incentive awards for up to 2,000,000 shares of common stock. As of July 25, 2018, the Company ceased granting awards under the 2008 LTIP.

On July 25, 2018, the stockholders approved the 2018 Long‑Term Incentive Plan (“2018 LTIP”). As with the 2008 LTIP, the 2018 LTIP permits the grant of non‑qualified and incentive stock options, stock appreciation rights, full value awards and cash incentive awards. The plan will be in effect for ten years. The maximum number of shares that can be awarded under the plan is 1,293,109 shares of common stock. As of December 31, 2020, 170,335 shares had been awarded and 663,842 shares are available under the 2018 LTIP.

No stock options were granted during the years ended December 31, 2020 and December 31, 2019.

The following table summarizes stock option activity during the years ended December 31, 2020 and 2019:

	2020					2019
	Number Outstanding			Weighted Average Exercise Price		Number Outstanding			Weighted Average Exercise Price
Outstanding at beginning of year		455,000		$	1.67		537,500		$	2.19
Granted during the year	‑			‑		‑			‑
Exercised during the year	‑			‑		‑			‑
Forfeited or expired during the year		(5,000	)		6.00		(82,500	)		4.98
Outstanding at end of year		450,000		$	1.62		455,000		$	1.67
Exercisable at end of year		360,000		$	1.62		275,000		$	1.70

For each year of 2020 and 2019, the Company recorded $39 thousand and $38 thousand, respectively, of stock‑based compensation expense related to stock options. As of December 31, 2020, unrecognized compensation cost related to non-vested stock options granted under the plan was $7 thousand. The cost is expected to be recognized over a period of two months.

Options outstanding and exercisable at year‑end 2020 were as follows:

	Outstanding							Exercisable
Grant Date	Number Outstanding		Weighted Average Remaining Contractual Life	Weighted Average Exercise Price		Aggregate Intrinsic Value		Number Outstanding		Weighted Average Exercise Price		Aggregate Intrinsic Value
February 24, 2016		450,000	5.15 years	$	1.62				360,000	$	1.62
		450,000	5.15 years	$	1.62	$	103,500		360,000	$	1.62	$	82,800

In February 2020 and January 2019, the Company awarded 30,930 and 42,168 shares of common stock, respectively, to its directors under the 2018 LTIP, which are fully vested. The Company recorded $45 thousand and $52 thousand of compensation expense for the years ended December 31, 2020 and December 31, 2019, respectively, based on the fair value of the stock, which was determined using the average of the high and the low price of the stock on the date of the award.

In February 2020 and 2019, the Company awarded 140,218 shares and 428,797 shares, of which $12,846 shares were forfeited, respectively, of restricted stock to its officers and employees under the 2018 LTIP. Each restricted stock award is valued based on the fair value of the stock, which was determined using the average of the high and the low price of the stock on the date of the award. These awarded shares of restricted stock are fully vested over a two-year period from their respective dates of grants. Stock based compensation expense is recognized on a straight-line basis over the vesting period. During 2020 and 2019, the Company recorded $340 thousand and $216 thousand of stock based compensation expense related to these awards, respectively. As of December 31, 2020, unrecognized compensation costs related to non-vested restricted stock awarded in February 2020 and 2019 were $110 thousand and $43 thousand, respectively. These unrecognized compensation costs related to non-vested restricted stock awarded in February 2020 and 2019 are expected to be recognized over a period of 14 months and 2 months, respectively. However, 140,218 shares scheduled to vest in February 2022 will become fully vested upon the closing of the City First Merger, which is expected to occur on April 1, 2021.