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Stock-Based Compensation

12 Months Ended

Dec. 31, 2021

NOTE 14. STOCK-BASED COMPENSATION

At the 2016 annual meeting, stockholders approved the Shore Bancshares, Inc. 2016 Stock and Incentive Plan (“2016 Equity Plan”), replacing the Shore Bancshares, Inc. 2006 Stock and Incentive Plan (“2006 Equity Plan”), which expired on that date. The Company may issue shares of common stock or grant other equity-based awards pursuant to the 2016 Equity Plan. Stock-based awards granted to date generally are time-based, vest in equal installments on each anniversary of the grant date and range over a one- to three-year period of time, and, in the case of stock options, expire 10 years from the grant date. As part of the 2016 Equity Plan, a performance equity incentive award program, known as the “Long-term incentive plan” allows participating officers of the Company to earn incentive awards of performance share/restricted stock units if certain pre-determined targets are achieved at the end of a three-year performance cycle. Stock-based compensation expense based on the grant date fair value is recognized ratably over the requisite service period for all awards and reflects forfeitures as they occur. The 2016 Equity Plan originally reserved 750,000 shares of common stock for grant, and 579,822 shares remained available for grant at December 31, 2021.

The following tables provide information on stock-based compensation expense as of and for the years ended December 31.


	December 31,
(Dollars in thousands)	2021			2020
Unrecognized stock-based compensation expense	$	80		$	97
Weighted average period unrecognized expense is expected to be recognized		0.2	years		0.3	years

The following table summarizes restricted stock award activity for the Company under the 2016 Equity Plan for the years ended December 31.


	2021			2020
		Weighted Average			Weighted Average
	Number of	Grant Date		Number of	Grant Date
	Shares	Fair Value		Shares	Fair Value
Nonvested at beginning of period	24,505	$	13.78	15,702	$	15.36
Granted	26,583		13.81	25,507		13.78
Vested	(20,240)		13.54	(15,065)		15.35
Forfeited	(1,423)		13.34	(1,639)		15.85
Nonvested at end of period	29,425	$	15.57	24,505	$	13.78

The fair value of restricted stock awards that vested during 2021 and 2020 was $309 thousand and $243 thousand, respectively.

The following table summarizes stock option activity for the Company under the 2016 Equity Plan for the years ended December 31.


	2021			2020
		Weighted Average			Weighted Average
	Number of	Grant Date		Number of	Exercise
	Shares	Exercise Price		Shares	Prices
Outstanding at beginning of period	2,709	$	6.64	11,671	$	9.25
Granted	—		—	—		—
Exercised	(2,009)		6.64	(7,760)		9.01
Expired/Cancelled	(700)		6.64	(1,202)		16.65
Outstanding at end of period	—	$	—	2,709	$	6.64

Exercisable at end of period	—	$	—	2,709	$	6.64

There were no stock options granted during 2021 and 2020, respectively.

December 31,

(Dollars in thousands)

Stock-based compensation expense

Excess tax benefits related to stock-based compensation