Stock-Based Compensation

12 Months Ended

Dec. 31, 2021

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

15.Stock-Based Compensation

The Compensation Committee of the Company’s Board of Directors is responsible for the administration of the Company’s  stock incentive plans, which include the balance of shares remaining under the 2011 Long Term Incentive Plan (the "2011 LTIP") and 2017 Long Term Incentive Plan (the "2017 LTIP"), which was approved by shareholders in May 2017 and authorized the maximum aggregate number of shares to be issued of 2,400,000. In general, the Company’s 2017 LTIP provides for grants of restricted stock and stock options to be issued with a per-share price equal to the fair market value of a share of common stock on the date of grant. Option terms are specified at each grant date, but are generally are 10 years from the date of issuance. Options generally vest over a three to five year period.

Restricted Stock

The following table summarizes the restricted stock activity under the Company’s equity incentive plans :

		Weighted
	Number	Average
	of	Fair Value
	Shares	Per Share
Nonvested at January 1, 2019	417,941	$	7.04
Granted	757,012	$	2.52
Vested	(585,754)	$	3.74
Forfeited shares	(72,627)	$	6.05
Nonvested at December 31, 2019	516,572	$	4.29
Granted	1,038,044	$	2.76
Vested	(496,797)	$	2.87
Forfeited shares	(107,383)	$	7.13
Nonvested at December 31, 2020	950,436	$	3.04
Granted	916,531	$	4.58
Vested	(690,676)	$	3.43
Forfeited shares	(234,232)	$	4.22
Nonvested at December 31, 2021	942,059	$	3.97

Independent directors receive equity compensation in the form of grants. In May 2021, the Company’s six independent directors each received equity compensation grants of 14,975 shares, with a fair value of $6.01 per share. In September 2021, the Company granted an independent director 18,215 shares of restricted common stock, which vested immediately on the date of grant. The fair value of all shares awarded on the date of grant was $5.49.

In May 2020, the Company’s six independent directors each received equity compensation grants of 39,823 shares, with a fair value of $2.26 per share.

In January 2019, two new independent directors each received equity compensation grants of 8,427 shares, with a fair value of $4.45 per share. In May 2019, five of the Company’s independent directors each received equity compensation grants of 45,918 shares, with a fair value of $1.96 per share. In October 2019, a new independent director received an equity compensation grant of 14,218 shares, with a fair value of $4.22 per share.

In May 2021, certain officers and executives of the Company were awarded 160,000 shares of restricted common stock with a vesting period of three years and a fair value of $6.01 per share. In September 2021, the Company granted an executive of the Company 9,901 shares of restricted common stock with a vesting period of three years and a fair value of $5.05 per share. In December 2021, certain officers and executives of the Company were awarded 139,000 shares of restricted common stock with a vesting period of three years and a fair value of $3.75 per share.

In February 2020, the Company granted an executive of the Company 15,121 shares of restricted common stock, which vested immediately on the date of grant. The fair value of all shares awarded on the date of grant was $4.96 per share. In March 2020, certain officers and executives of the Company were awarded 170,235 shares of restricted common stock with a vesting period of three years and a fair value of $3.73 per share. In May 2020, certain officers and executives of the Company were awarded 100,000 shares of restricted common stock with a vesting period of three years and a fair value of $2.26 per share. In September 2020, the Company granted an executive of the Company 25,000 shares of restricted common stock with a vesting period of three years and a fair value of $2.58 per share. In December 2020, certain officers

and executives of the Company were awarded 95,000 shares with a vesting period of three years and a fair value of $4.92 per share.

In March 2019, the Company granted an executive of the Company 168,350 shares of restricted common stock, which vested one-third at March 31, June 30, and September 30, 2019, respectively. The fair value of all shares awarded on the date of the grant was $2.97 per share. In May 2019, certain officers and executives of the Company were awarded 62,500 shares with a vesting period of three years and a fair value of $1.96 per share. In July 2019, certain officers and executives of the Company were awarded 46,500 shares with a vesting period of three years and a fair value of $3.66. In December 2019, certain officers and executives of the Company were awarded 31,500 shares with a vesting period of three years and a fair value of $5.08 per share.

Performance Units

In May 2021, the Company awarded certain executives 240,000 performance-based units. The performance-based units will potentially vest 100% if the target is met, with 100% of the units to be earned based on the achievement of an objective, tiered return on invested capital, measured over a three-year performance period. The Company evaluates the probability of achieving this each reporting period. The fair value of all units awarded on the date of the grant was $6.01 per unit.

In May 2020, the Company awarded certain executives 300,000 performance-based units. The performance-based units will potentially vest 50% if the target is met, with 25% each vesting on the second and third anniversary of the determination that the target was met, with 100% of the units to be earned based on the achievement of an objective, tiered return on invested capital, measured over a one-year performance period ending June 30,2021. The Company evaluates the probability of achieving this each reporting period. The fair value of all units awarded on the date of the grant was $2.26 per unit.

In August 2021, the Company determined the performance-based units awarded in May 2020 vested near the outperformance level established above the target set based on the achievement of an objective, tiered return on invested capital, measured over a one-year performance period ending June 30, 2021. As a result, the executives earned an additional 259,565 performance-based units with a fair value of $2.26, of which 50% vested immediately on the date of determination and 25% each will vest on the first and second anniversary of the date of determination.

In May 2019, the Company awarded certain executives 187,500 performance-based units. The performance-based units will potentially vest 50% if the target is met, with 25% each vesting on the second and third anniversary of the grant, with 100% of the units to be earned based on the achievement of an objective, tiered return on invested capital, measured over a one-year performance period. The fair value of all units awarded on the date of the grant was $1.96 per unit.

In August 2020, the Company determined the performance-based units awarded in May 2019 vested at the outperformance level established above the target set based on the achievement of an objective, tiered return on invested capital, measured over a one-year performance period ending June 30, 2020. As a result, the executives earned an additional 93,750 performance-based units with a fair value of $1.96, of which 50% vested immediately on the date of determination and 25% each will vest on the first and second anniversary of the date of determination.

Stock Options

The following table summarizes the stock option activity under the Company’s equity incentive plans:

		Weighted		Weighted
		Average		Average
	Number	Exercise		Contractual	Aggregate
	of	Price		Life	Intrinsic
	Shares	Per Share		(Years)	Value
Outstanding at January 1, 2019	1,664,781	$	8.31
Exercised	(7,021)	$	4.94
Forfeited	(192,994)	$	15.26
Outstanding at December 31, 2019	1,464,766	$	7.41
Forfeited	(542,151)	$	7.94
Outstanding at December 31, 2020	922,615	$	7.10
Exercised	(28,546)	$	3.86
Forfeited	(169,365)	$	6.32
Outstanding at December 31, 2021	724,704	$	7.41
Vested and expected to vest at December 31, 2021	724,704	$	7.41	4.57	$	—
Exercisable at December 31, 2021	724,704	$	7.41	4.57	$	—

For years ended December 31, 2021, 2020 and 2019, compensation expense related to stock based awards outstanding for the periods was $2.4 million, $2.0 million and $2.8 million, respectively. The Company applies a 3.2% and 5.5% forfeiture rate, which gets compounded over the vesting terms of the individual award, to its restricted stock and option grants, respectively, based on historical analysis. For the year ended December 31, 2021, expense related to the purchase of vested stock-based awards for certain officers of the Company was approximately $0.9 million. For the year ended December 31, 2020, expense related to the purchase of vested stock-based awards for certain officers of the Company was approximately $0.2 million.

In the year ended December 31, 2021, the Company received proceeds of approximately $0.1 million upon the exercise of 28,546 options. In the year ended December 31, 2020, no stock options were exercised. In the year ended December 31, 2019, the Company received proceeds of less than $0.1 million upon the exercise of 7,021 options.

As of December 31, 2021, total unrecognized compensation expense related to unvested stock was approximately $3.2 million, which is expected to be recognized over a period of approximately 2.2 years.

	2021		2020		2019
Total intrinsic value of options exercised	$	50	$	—	$	—
Total fair value of shares vested	$	93	$	329	$	769