Stock Based Compensation Plan

12 Months Ended

Dec. 31, 2022

Stock Based Compensation Plan

Stock Based Compensation Plan

Note 14— Stock Based Compensation Plan

The Company’s share-based compensation plan, approved by stockholders and effective April 28, 2015 (the “2015 Plan”), provides for the grant of share-based awards in the form of incentive stock options, non-incentive stock options, restricted stock and restricted stock units to directors and employees. The Company has reserved 976,211 shares of voting common stock for issuance under the 2015 Plan, which will remain in effect until April 28, 2025. The Company’s Compensation Committee administers the 2015 Plan and has the authority to determine the terms and conditions of each award thereunder. As of December 31, 2022, 300,640 shares are available to grant in future periods under the 2015 Plan.

The Company’s previous share-based compensation plan, the 2006 Stock Option Plan (the “2006 Plan”), provided for the grant of share-based awards in the form of incentive stock options and non-incentive stock options to directors and employees. As amended, the 2006 Plan provided for awards of up to 1,490,700 shares. In April 2015, the 2006 Plan was terminated and replaced with the 2015 Plan. Options outstanding prior to April 28, 2015 were granted under the 2006 Plan and shall be subject to the 2006 provisions of the 2006 Plan.

To date, options granted under the 2015 Plan typically vest over five years and expire 10 years from the grant date. Under the 2015 Plan, the exercise price of options may not be less than 100% of fair market value at the grant date with a maximum term for an option award of 10 years from the date of grant.

The table below provides a summary of the stock options activity for the year ended December 31, 2022.

Table 14.1: Summary of Stock Options Activity

	December 31, 2022
		Weighted Average		Aggregate Intrinsic
	Shares	Exercise Price		Value
Outstanding at January 1, 2022	534,236	$	10.45
Granted	—		—
Exercised	(340,649)		9.74
Forfeited or expired	(3,653)		8.79
Outstanding at December 31, 2022	189,934		11.76	$	3,232,163
Exercisable at December 31, 2022	189,934	$	11.76	$	3,232,163

The aggregate intrinsic value of stock options in the table above represents the total amount by which the current market value of the underlying stock exceeds the exercise price of the option that would have been received by the Company had all option holders exercised their options on December 31, 2022. The intrinsic value of options exercised was $4.6 million for the year ended December 31, 2022 and $1.3 million for the year ended December 31, 2021. These amounts and the intrinsic values noted in the table above change based on changes in the market value of the Company’s voting common stock.

The table below provides a summary of the stock options outstanding and exercisable as of December 31, 2022.

Table 14.2: Summary of Stock Options Outstanding and Exercisable

	December 31, 2022
	Options Outstanding		Options Exercisable
		Weighted Average		Weighted Average
		Remaining		Remaining
	Number	Contractual Life	Number	Contractual Life
Exercise Prices	Outstanding	in Years	Exercisable	in Years
$0.00 - $11.00	187	0.04	187	0.04
$11.01 - $12.00	188,685	2.30	188,685	2.30
$12.01 - $13.00	1,062	1.98	1,062	1.98
Total	189,934	2.30	189,934	2.30

There were no options granted during the years ended December 31, 2022 or December 31, 2021.

The Company did not have share-based compensation expense applicable to the Company’s share-based compensation plans for stock options for the year ended December 31, 2022. Share-based compensation expense applicable to the Company’s share-based compensation plans for stock options was $11 thousand for the year ended December 31, 2021.

The Company does not have any unrecognized share-based compensation expense related to nonvested options as of December 31, 2022.

The table below provides a summary of the restricted stock awards granted under the 2015 plan.

Table 14.3: Summary of Restricted Stock Awards

	December 31, 2022
		Weighted Average
	Shares	Grant Date Fair Value
Nonvested at January 1, 2022	75,826	$	17.25
Granted	24,423		27.44
Vested	(42,561)		17.18
Forfeited	(2,503)		17.66
Nonvested at December 31, 2022	55,185		21.80

Compensation expense for restricted stock grants is recognized over the vesting period of the awards based on the fair value of the Company’s voting common stock at issue date. The fair value of the stock was determined using the closing stock price on the day of grant. The restricted stock grants vest over two to five years. The weighted average grant date fair value of restricted stock grants in 2021 was $18.67 per share.

Share-based compensation expense applicable to the Company’s share-based compensation plans for restricted stock grants was $573 thousand and $548 thousand for the years ended December 31, 2022 and December 31, 2021, respectively. The total fair value of the shares, which vested during 2022 and 2021, was $1.1 million and $656 thousand, respectively.

Unrecognized share-based compensation expense related to nonvested restricted stock grants amounted to $1.1 million as of December 31, 2022. This amount is expected to be recognized over a weighted-average period of 1.7 years.