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Equity Incentive Plans

12 Months Ended

Dec. 31, 2021

Note 13. Equity Incentive Plans

The Company has two shareholder approved equity incentive plans:

2015 Equity Incentive Plan — During 2015, the Company established the BioHiTech Global, Inc. 2015 Equity Incentive Plan, which is available to eligible employees, directors, consultants and advisors of the Company and its affiliates. The plan allows for the granting of incentive stock options, nonqualified stock options, reload options, stock appreciation rights, and restricted stock representing up to 750,000 shares. The Plan is administered by the Compensation Committee of the Board of Directors. On July 23, 2020 the shareholders of the Company approved a 500,000 increase in the plan's shares, increasing the plan's shares to 1,250,000.

2017 Executive Incentive Plan — During 2017, the shareholders approved the 2017 Executive Incentive Plan, which is available to eligible employees, directors, consultants and advisors of the Company and its affiliates. The plan allows for the granting of incentive stock options, nonqualified stock options, reload options, stock appreciation rights, and restricted stock representing up to 1,000,000 shares. The Plan is administered by the Compensation Committee of the Board of Directors. On July 23, 2020 the shareholders of the Company approved a 500,000 increase in the plan's shares, increasing the plan's shares to 1,500,000.

Effective January 30, 2020, the Company granted nonqualified options for 155,450 shares and 269,060 restricted stock units. The options granted had a fair value of $162,959 using the Black-Scholes option pricing model with the following assumptions: risk-free interest rate of 1.44%, expected dividend yield of 0%, expected volatility of 49.24% and expected term in years of from 1.00 to 2.92 years. The restricted stock units had a value of $538,120 based on the market value on the date of the grants and a weighted average vesting period of 0.75 years.

Effective September 19, 2020, the Company granted 136,145 restricted stock units under the Interim Executive Plan. The restricted stock units had a value of $174,266 based on the market value on the date of the grants and immediately vested.

Effective December 28, 2020, the Company granted 10,000 restricted stock units with a value of $11,700 based on the market value on the date of the grants that vested on the date of the grant.

There were no grants during the year ended December 31, 2021.

Compensation expense related to stock options and restricted stock for the years ended December 31, was:


	2021		2020
Stock options	$	36,262	$	227,499
Restricted stock units		232,388		1,254,169
	$	268,650	$	1,481,668

The following summarizes the Company’s stock option activity for the years ended December 31, 2021 and 2020:


				Weighted
				Average
		Weighted		Remaining
		Average		Contractual
	Number of	Exercise		Life	Aggregate
	Options	Price		(in Years)	Intrinsic Value
Outstanding, January 1, 2020	363,826	$	3.7	7.3		—
Granted	155,450		2.0	—		—
Exercised	—			—		—
Forfeited, Canceled or Expired	(59,250)		3.6	—		—
Outstanding , December 31, 2020	460,026		3.2	6.4		—
Granted	—		—	—		—
Exercised	—		—	—		—
Forfeited, Canceled or Expired	(137,562)		2.3	5.6		—
Outstanding, December 31, 2021	322,646		3.5	5.5		—
Exercisable, December 31, 2021	299,440		3.6	5.6		—

Total unrecognized compensation expense related to the unvested options as of December 31, 2021 amounts to $22,291. The December 31, 2021 weighted average period that the expense is expected to be recognized is 1.2 years.

The following summarizes the Company’s restricted stock unit activity for the years ended December 31, 2021 and 2020:


		Number of
		Shares
Unvested balance, January 1, 2020		291,730
Granted or modified		415,205
Vested		(438,233)
Forfeited or Canceled		—
Unvested balance, December 31, 2020		268,702
Granted		—
Vested		(268,702)
Forfeited or Canceled		—
Unvested balance, December 31, 2021		—

As of December 31, 2021, 918,922 restricted stock units have been vested but not yet drawn down by the grantees.

Interim Executive Plan — During the second quarter of 2020, the Company established a payroll cash deferment program in order to improve cash resources during the COVID-19 pandemic. Under the program, certain executives reduced their cash compensation and would be provided restricted common stock units under the shareholder approved plans as the shares were available or may be issued restricted common stock shares or cash. The shares under the individual agreements were based on a cash amount of deferral each month divided by the lower of the average or last trading day common share price. Under the program that has been concluded, all of the participants elected to receive restricted stock units resulting in 136,145 restricted stock units being issued at a cost of $174,266 that has been reflected as restricted stock compensation expense above.