STOCK PLANS

3 Months Ended

Mar. 31, 2022

8.	STOCK PLANS

On January 27, 2022, the Board of Directors of the Company declared a 5% stock dividend paid on March 25, 2022 to shareholders of record as of February 28, 2022. All stock options and restricted stock outstanding have been adjusted to give retroactive effect to stock dividends.

The following table presents the activity related to stock options for the three months ended March 31, 2022:

	Number of Shares			Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Term (in years)
Options outstanding at Beginning of Period		627,814		$	8.58
Granted		42,965			10.25
Expired		—			—
Cancelled / Forfeited		—			—
Exercised		(18,524	)		3.51
Options outstanding at End of Period		652,255			8.83	$	939,896		6.03
Exercisable (vested) at End of Period		488,666		$	8.41	$	916,565		5.27

The intrinsic value of options exercised was $125,000 and $63,000 during the three months ended March 31, 2022 and March 31, 2021, respectively. The fair value of awards vested was $142,000 and $182,000 during the three months ended March 31, 2022 and March 31, 2021, respectively.

As of March 31, 2022, there was $250,000 of total unrecognized compensation cost related to non-vested stock options. This cost is expected to be recognized over a weighted average period of approximately 2.59 years.

There was $28,000 of recognized compensation cost related to stock options granted for the three months ended March 31, 2022.

A summary of the weighted average assumptions used in valuing stock options during the three months ended March 31, 2022 is presented below:

	Three Months Ended March 31, 2022
Risk Free Interest Rate		2.54	%

Expected Dividend Yield		0.00	%

Expected Life in Years		5

Expected Price Volatility		19.70	%

The following table presents the activity related to non-vested restricted stock for the three months ended March 31, 2022:

	Number of Shares			Weighted Average Grant-Date Fair Value			Aggregate Intrinsic Value	Weighted Average Remaining Contractual Term (in years)
Non-vested Restricted stock outstanding at Beginning of Period		167,397		$	9.97
Granted		70,973			10.33
Cancelled/Forfeited		—			—
Exercised/Released/Vested		(30,145	)		10.68	$
Non-vested restricted stock outstanding at End of Period		208,225		$	9.99	$	2,123,895		3.11

The weighted average fair value of restricted stock granted during the three months ended March 31, 2022 was $10.33 per share.

As of March 31, 2022, there was $1,352,000 of total unrecognized compensation cost related to non-vested restricted stock. This cost is expected to be recognized over a weighted average period of approximately 3.11 years.

There was $128,000 of recognized compensation cost related to restricted stock awards for the three months ended March 31, 2022.

The Company has an Employee Stock Purchase Plan (“ESPP”). There are 341,820 shares authorized under the ESPP. The total number of shares authorized has been adjusted to give retroactive effect to stock dividends and stock splits, including the 5% stock dividend declared on January 27, 2022, payable March 25, 2022 to shareholders of record as of February 28, 2022. The ESPP will expire on March 16, 2026.

The ESPP is implemented by participation periods of not more than twenty-seven months each. The Board of Directors determines the commencement date and duration of each participation period. The Board of Directors approved the current participation period of November 24, 2021 to November 23, 2022. An eligible employee is one who has been continually employed for at least 90 days prior to commencement of a participation period. Under the terms of the ESPP, employees can choose to have up to 10 percent of their compensation withheld to purchase the Company’s common stock each participation period. The purchase price of the stock is 85 percent of the lower of the fair value on the last trading day before the date of participation or the fair value on the last trading day during the participation period.

As of March 31, 2022, there was $26,000 of unrecognized compensation cost related to ESPP issuances. This cost is expected to be recognized over a weighted average period of approximately 0.75 years.

There was $8,000 of recognized compensation cost related to ESPP issuances for the three months ended March 31, 2022.

The weighted average fair value at issuance date during the three months ended March 31, 2022 was $2.50.

A summary of the weighted average assumptions used in valuing ESPP issuances during the three months ended March 31, 2022 is presented below:

	Three Months Ended March 31, 2022
Risk Free Interest Rate		0.21	%

Expected Dividend Yield		0.00	%

Expected Life in Years		1.00

Expected Price Volatility		25.73	%