Stock Based Compensation Plan

3 Months Ended

Mar. 31, 2023

Stock Based Compensation Plan

Stock Based Compensation Plan

Note 10— 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 March 31, 2023, 301,422 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 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 three months ended March 31, 2023.

	March 31, 2023
		Weighted Average		Aggregate Intrinsic
	Shares	Exercise Price		Value
Outstanding at January 1, 2023	189,934	$	11.76
Granted	—		—
Exercised	(26,625)		11.75
Forfeited or expired	(412)		9.44
Outstanding at March 31, 2023	162,897		11.77	$	1,601,270
Exercisable at March 31, 2023	162,897	$	11.77	$	1,601,270

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 March 31, 2023. The intrinsic value of options exercised was $363 thousand and $2.5 million for the three months ended March 31, 2023 and March 31, 2022, respectively. 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 March 31, 2023.

	March 31, 2023
	Options Outstanding		Options Exercisable
		Weighted Average		Weighted Average
		Remaining		Remaining
	Number	Contractual Life	Number	Contractual Life
Exercise Prices	Outstanding	in Years	Exercisable	in Years
$11.01 - $12.00	161,835	2.07	161,835	2.07
$12.01 - $13.00	1,062	1.74	1,062	1.74
Total	162,897	2.07	162,897	2.07

There were no options granted during the three months ended March 31, 2023 or March 31, 2022.

The Company did not record any share-based compensation expense applicable to the Company’s share-based compensation plans for stock options during the three months ended March 31, 2023 or March 31, 2022.

The Company does not have any unrecognized share-based compensation expense related to nonvested options as of March 31, 2023.

The table below provides a summary of the restricted stock awards granted under the 2015 plan for the three months ended March 31, 2023.

	March 31, 2023
		Weighted Average
	Shares	Grant Date Fair Value
Nonvested at January 1, 2023	55,185	$	21.80
Granted	—		—
Vested	(6,414)		19.44
Forfeited	(370)		15.50
Nonvested at March 31, 2023	48,401		22.16

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 Company did not award restricted stock grants during the three months ended March 31, 2022.

Share-based compensation expense applicable to the Company’s share-based compensation plans for restricted stock grants was $197 thousand and $139 thousand for the three months ended March 31, 2023 and March 31, 2022, respectively. The total fair value of the shares, which vested during the three months ended March 31, 2023 and March 31, 2022, was $139 thousand and $306 thousand, respectively.

Unrecognized share-based compensation expense related to nonvested restricted stock grants amounted to $895 thousand as of March 31, 2023. This amount is expected to be recognized over a weighted-average period of 1.6 years.