A summary of the reserved shares of common stock for future issuance are as follows:

	December 31,
Stock Plan	2021		2020
PCTEL, Inc. 2019 Stock Incentive Plan		1,870,260		2,109,184
PCTEL, Inc. 2015 Stock Incentive Plan		299,979		299,979
PCTEL, Inc. 2019 Employee Stock Purchase Plan		1,478,036		1,642,294
Total shares reserved		3,648,275		4,051,457

At the 2019 Annual Meeting of Shareholders, the shareholders adopted and approved the PCTEL, Inc. 2019 Stock Incentive Plan (the “2019 Stock Plan”) upon the recommendation of the Board of Directors. The purpose of the 2019 Stock Plan is to promote the interests of the Company and its stockholders by aiding the Company in attracting and retaining employees, officers, consultants, independent contractors, and non-employee directors capable of assuring the future success of the Company, to provide such persons with opportunities for stock ownership in the Company and to offer such persons incentives to put forth maximum effort for the success of the Company’s business. The 2019 Stock Plan replaced the PCTEL, Inc. Stock Incentive Plan adopted in 2015 (the “2015 Stock Plan”).

The 2019 Stock Plan, which is administered by the Compensation Committee of the Company’s Board of Directors, authorizes the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, and other stock-based awards. The aggregate number of shares that may be issued under all stock-based awards made under the 2019 Stock Plan will be the sum of (i) 2,213,000 shares and (ii) any shares subject to any outstanding award under the 2015 Stock Plan that after the effective date of the 2019 Stock Plan are not purchased, are forfeited, or are reacquired by the Company or otherwise not delivered to the participant due to termination or cancellation of such award. At December 31, 2021, the number of shares available in the 2019 Stock Plan that were from the 2015 Plan was 299,979. The Board of Directors may from time to time amend, suspend, or terminate the 2019 Stock Plan, subject to its terms. Currently the 2019 Stock Plan does not allow share “recycling”, repricing of stock options or stock appreciation rights or dividend equivalents to be paid on unvested awards. Further, the 2019 Stock Plan does not contain an “evergreen” provision that will automatically increase the number of shares authorized for issuance under the 2019 Stock Plan.

The PCTEL, Inc. 2019 Employee Stock Purchase Plan (“the 2019 ESPP”) is to provide employees with an opportunity to purchase shares of PCTEL common stock through accumulated payroll deductions. Encouraging employees to acquire equity ownership in PCTEL assures a closer alignment of the interests of participating employees with those of the Company’s stockholders. The 2019 ESPP is administered by the Compensation Committee of the Company’s Board of Directors. Subject to change by the administrator, shares of PCTEL common stock may be purchased during consecutive offering periods that begin approximately every six months commencing on the first trading day on or after April 1 and terminating on the last trading day of the offering period ending on September 30 and commencing on the first trading day on or after October 1 and terminating on the last trading day of the offering period ending on March 31. Unless and until the administrator determines otherwise, the purchase price will be equal to 85% of the fair market value of PCTEL common stock on the first day of an offering period or the last day of an offering period, whichever is lower. The administrator may from time to time amend, suspend, or terminate the 2019 ESPP, subject to its terms.

The consolidated statements of income include $2.9 million and $2.5 million of stock compensation expense for the years ended December 31, 2021 and 2020, respectively. The Company did not capitalize any stock compensation expense during the years ended December 31, 2021, and 2020.

	Years Ended December 31,
	2021		2020
Service-based awards	$	1,405	$	1,803
Director awards		373		402
Performance-based awards (long-term incentive plan)		576		28
Performance-based awards (short-term incentive plan)		300		0
Employee stock purchase plan		267		245
Stock options		0		1
Total	$	2,921	$	2,479

The stock-based compensation is reflected in the consolidated statements of income as follows:

	Years Ended December 31,
	2021		2020
Cost of revenues	$	268	$	272
Research and development		543		530
Sales and marketing		658		559
General and administrative		1,452		1,118
Total	$	2,921	$	2,479

The following table presents a summary of the remaining unrecognized share-based compensation expense related to our outstanding share-based awards as of December 31, 2021:

The Company grants service-based restricted shares as employee incentives under the 2019 Stock Plan. When service-based restricted stock is granted to employees, the Company records deferred stock compensation within additional paid-in capital, representing the fair value of the restricted stock on the grant date. The Company records stock compensation expense on a straight-line basis over the vesting period of the applicable service-based restricted shares. During the years ended December 31, 2021 and 2020, the Company awarded executives and key-managers long-term incentives comprised one-third of service-based restricted stock and two-thirds of performance-based restricted stock. The Company awarded service-based restricted stock to all other participating employees. The service-based restricted shares vest in three substantially equal annual increments.

	Years ended December 31,
	2021					2020
Unvested Restricted Stock Awards	Shares			Weighted Average Fair Value		Shares			Weighted Average Fair Value
Beginning of year		432,422		$	6.91		474,771		$	6.11
Shares awarded		170,158			8.04		201,233			7.91
Shares vested		(272,274	)		6.58		(239,615	)		6.18
Shares cancelled		(3,970	)		7.84		(3,967	)		6.19
End of year		326,336		$	7.76		432,422		$	6.91

The intrinsic values of service-based restricted shares that vested were $2.2 million and $1.9 million during the years ended December 31, 2021, and 2020, respectively.

The Company grants service-based restricted stock units as employee incentives. Restricted stock units are primarily granted to foreign employees for long-term incentive purposes. Employee restricted stock units are service-based awards and are amortized over the vesting period. At the vesting date, these units are converted to shares of common stock. The Company records expense on a straight-line basis for restricted stock units.

	Years Ended December 31,
	2021					2020
Unvested Restricted Stock Units	Shares			Weighted Average Fair Value		Shares			Weighted Average Fair Value
Beginning of year		9,083		$	7.02		8,117		$	5.83
Units awarded		17,800			7.11		6,448			7.48
Units vested/Shares awarded		(5,446	)		6.47		(5,482	)		5.80
End of year		21,437		$	7.23		9,083		$	7.02

The intrinsic values of service-based restricted stock units that vested were $42 and $44, during the years ended December 31, 2021, and 2020, respectively.

The Company may grant stock options to purchase common stock to employees, but generally issues stock options only to new employees. The Company issues stock options with exercise prices no less than the fair value of the Company’s stock on the grant date. Employee options are subject to installment vesting and although the vesting may vary from year to year, it is typically over a period of three years. Stock options may be exercised at any time prior to their expiration date or within 180 days of termination of employment, or such shorter time as may be provided in the related stock option agreement. The Company grants stock options with a ten-year life.

	Years Ended December 31,
	2021					2020
	Options Outstanding			Weighted Average Exercise Price		Options Outstanding			Weighted Average Exercise Price
Beginning of Year		16,250		$	6.54		150,246		$	7.11
Options exercised		(6,000	)		5.48		(61,767	)		7.13
Options forfeited		0			0		(188	)		5.00
Options cancelled/expired		(6,250	)		7.89		(72,041	)		7.23
End of Year		4,000		$	6.02		16,250		$	6.54
Exercisable		3,916		$	6.00		15,620		$	6.52

The Company did not grant any stock options during 2021 or 2020. During the year ended December 31, 2021, the Company received proceeds of $8 and issued 1,420 shares for the exercise of 6,000 options. The intrinsic value of the options exercised was $53.

During the year ended December 31, 2020, the Company received proceeds of $0.1 million from the exercise of 9,412 options and issued 10,194 shares for the exercise of 52,355 options. The intrinsic value of the options exercised was $0.1 million.

The following table summarizes information about stock options outstanding under all stock option plans:

Options Outstanding

Options Exercisable

Range of

Exercise Prices

Number

Outstanding

Weighted

Average

Contractual

Life (Years)

Intrinsic Value

Weighted-

Average

Exercise

Price

Number

Exercisable

Weighted

Average

Contractual

Life (Years)

Intrinsic Value

Weighted

Average

Exercise

Price

$ 5.06 - $ 6.98

4,000

2.42

6.02

3,916

2.40

6.00

The weighted average contractual life and intrinsic value on December 31, 2021, was the following:

Weighted

Average

Contractual

Life (years)

Intrinsic

Value

Options Outstanding

2.42

Options Exercisable

2.40

For the outstanding stock options, the Company used the Black-Scholes option valuation model for estimating the fair value. The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferable. Option valuation models require the input of highly subjective assumptions including the expected stock price volatility and expected option life as well a risk-free rate and the dividend yield. Because the Company’s employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, the existing models may not necessarily provide a reliable single measure of the fair value of the employee stock options.

The dividend yield rate was calculated by dividing the Company’s annual dividend by the closing price on the grant date. The risk-free interest rate was based on the U.S. Treasury yields with a remaining term that approximates the expected life of the options granted. The Company calculated the volatility based on a five-year historical period of the Company’s stock price. The expected life used for options granted was based on historical data of employee exercise performance. The Company records expense based on the grading vesting method.

Incentive compensation earned by executives and key managers under the Company’s 2021 Short-Term Incentive Plan (“STIP”) was to be settled 50% in cash and 50% in shares of the Company’s stock payment of which generally is earned based on revenues and adjusted EBITDA targets. For the year ended December 31, 2021, the Company’s board of directors approved bonuses of $0.3 million payable in the Company’s stock to executive and key managers. The shares related to the 2021 bonus were issued to executives and key managers during the first quarter 2022.

The Company grants performance-based awards to executives and key managers under its Long-Term Incentive Plan (“LTIP”) to encourage sustainable growth, consistent earnings, and management retention. Based on the fair value of the shares on the grant date, the Company records stock compensation expense over the performance period based on the estimated achievement of the award.

	Years Ended December 31,
	2021					2020
Unvested Performance Awards - at Target	Awards			Weighted Average Fair Value		Awards		Weighted Average Fair Value
Beginning of Year		316,726		$	6.84		171,437	$	5.27
Awards granted		187,864			8.15		145,289		8.70
Awards cancelled		(171,437	)		5.27		0		0.00
End of Year		333,153		$	8.39		316,726	$	6.84

The Company granted performance awards to executives and key managers under the 2021 LTIP in February 2021. The performance period for the 2021 LTIP is from January 1, 2021 through December 21, 2023. At target, the total fair market value of the award was $1.5 million based on a weighted average share price of $8.15. On the award date, the aggregate number of shares that could be earned at target was 187,864 and the maximum number of aggregate shares that could be earned was 328,762.

Under the 2021 LTIP and similar plans from 2019 and 2020, shares of the Company’s stock can be earned based on achievement of a three-year revenue growth target with a penalty if a certain adjusted EBITDA level is not maintained. If the Company achieves less than the target growth over the performance period, the participant will receive fewer shares than the target award, determined on a straight-line basis. If the Company achieves greater than the target growth, the participant will receive more shares than the target award on an accelerated basis. Participants are required to be in service at the determination date of the award following the end of the performance period in order to receive the award. Shares earned will be fully vested shares. The Company records stock compensation expense over the performance periods based on the Company’s estimate of the aggregate number of shares that will be earned under the incentive plans.

Since the Company did not meet its three-year revenue target for the 2019 LTIP, no awards were granted and the remaining awards at target of 171,437 were cancelled.

The following table summarizes the active performance-based long-term incentive plans at December 31, 2021:

			Number of Shares
	Share Price		That Could Be Earned:
LTIP award	on Grant Date		Target		Maximum		Performance Period
2020 LTIP	$	8.70		145,289		254,256	January 1, 2020 through December 31, 2022
2021 LTIP	$	8.15		187,864		328,762	January 1, 2021 through December 31, 2023
				333,153		583,018

	Years Ended December 31,
	2021					2020
	Shares			Weighted Average Fair Value at Grant Date		Shares			Weighted Average Fair Value at Grant Date
Outstanding, beginning of year		0		$	0.00		0		$	0.00
Granted		164,258			1.62		157,706			1.68
Vested		(164,258	)		1.62		(157,706	)		1.68
Outstanding, end of year		0		$	0.00		0		$	0.00

Based on the 15% discount and the fair value of the option feature of this plan, the ESPP is considered compensatory. Compensation expense is calculated using the fair value of the employees’ purchase rights under the Black-Scholes model. During the years ended December 31, 2021 and 2020, the Company received proceeds of $0.8 million and $0.9 million from the ESPP, respectively.

The Company calculated the fair value of each employee stock purchase grant under the ESPP on the date of grant using the Black-Scholes option-pricing model using the following assumptions:

	Employee Stock Purchase Plan
	2021			2020
Dividend yield		3.1	%		4.1	%
Risk-free interest rate		0.1	%		0.1	%
Expected volatility		48	%		44	%
Expected life (in years)		0.5			0.5

The dividend yield rate was calculated by dividing the Company’s annual dividend by the closing price on the grant date. The risk-free interest rate was based on the U.S. Treasury yields with remaining term that approximates the expected life of the options granted. The Company calculated the volatility based on a five-year historical period of the Company’s stock price. The expected life used was based on the offering period.

The Company grants equity awards to members of its Board of Directors for an annual retainer and for committee service in shares of the Company’s stock. In addition, new directors receive a one-time grant of $55 paid in service-based restricted shares which vest in equal annual increments over three years. In February 2021, 2,416 service-based shares vested related to new director grants, with a fair value of $20. In May 2021, the Company issued 61,186 shares of the Company’s stock, of which 49,652 with a fair value of $0.3 million vested immediately upon issuance, with the remainder vesting one year after issuance. During the year ended December 31, 2020, the Company issued 60,998 shares of the Company’s stock with a fair value of $0.4 million which vested immediately.

	Years Ended December 31,
	2021						2020
	Shares			Weighted Average Fair Value at Grant Date			Shares			Weighted Average Fair Value at Grant Date
Outstanding, beginning of year		2,416		$	6.90			4,831		$	6.90
Granted		61,186			6.57			60,998			6.59
Vested		(52,068	)		(6.65	)		(63,413	)		(6.60	)
Outstanding, end of year		11,534		$	6.57			2,416		$	6.90

For ease in administering the issuance of stock awards, the Company holds back shares of vested restricted stock awards and short-term incentive plan stock awards, if paid in the Company’s stock, for the value of the statutory withholding taxes. For each individual receiving a stock award, the Company redeems the shares it computes as the value for the withholding tax and remits this amount to the

appropriate tax authority. For withholding taxes related to stock awards, the Company paid $0.8 million and $1.1 million during the years ended December 31, 2021 and December 31, 2020, respectively.

On November 6, 2019, the Board of Directors approved a share repurchase program, and on March 10, 2020 the Board of Directors reauthorized the program pursuant to which the Company was authorized to repurchase up to $7.0 million of its common stock through the end of 2020 (“2019 Repurchase Plan”). The Company spent $2.0 million to repurchase 375,046 shares at an average price of $5.36 during the three months ended March 31, 2020. The Company retired the repurchased shares. Due to uncertainties related to the COVID-19 pandemic and to protect the Company’s cash position, on April 1, 2020 the Board of Directors approved the termination of the 2019 Repurchase Plan.

On November 4, 2020, the Board of Directors approved a new share repurchase program, pursuant to which the Company was authorized to repurchase $5.0 million of its common stock through the end of 2021 (“2020 Repurchase Plan”). The 2020 Repurchase Plan became effective November 10, 2020 and was completed in September 2021. The Company spent $1.8 million to repurchase 288,573 shares at an average price of $6.30 during the three months ended December 31, 2020 and spent $3.2 million during the nine months ended September 30, 2021 to repurchase 495,144 shares at an average price of $6.45. The Company retired all repurchased shares.

On May 29, 2020, the Company filed a Certificate of Amendment to its Amended and Restated Certificate of Incorporation (i) changing the Company’s name from “PC-Tel, Inc.” to “PCTEL, Inc.” and (ii) decreasing the number of authorized shares of common stock from 100,000,000 shares to 50,000,000 shares.