STOCK COMPENSATION PLAN

3 Months Ended

Mar. 31, 2024

STOCK COMPENSATION PLAN

STOCK COMPENSATION PLAN

10. STOCK COMPENSATION PLAN

Long-Term Incentive Plan

The Company maintains the 2016 Long-Term Incentive Plan (the “Plan”); the Plan amended and restated the former 2011 Stock Option Plan (the “2011 Plan”). The Plan continues in effect for any outstanding awards under the 2011 Plan in accordance with the terms and conditions governing such awards immediately prior to the effective date of the Plan. The Plan expanded the types of awards authorized by the 2011 Plan to include, among others, restricted stock. Under the provisions of the Plan, awards may consist of grants of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock and performance shares to officers and key employees of the Company, as well as directors. The Plan is administered by a committee of the Board of Directors.

The maximum number of shares of common stock that may be issued under the Plan is 300,000 shares, and 177,100 shares remained available for grant as of March 31, 2024. Shares of common stock issued under the Plan may be treasury shares or authorized but unissued shares. Forfeited awards are returned to the pool of shares available for grant for future awards.

Through the three months ended March 31, 2024, 9,628 restricted shares were awarded to certain officers and all directors. Each of the awards vest after three-years, with no interim vesting. As of March 31, 2024, there was $266,000 of unrecognized compensation cost related to all non-vested restricted stock awards. This cost is expected to be recognized over the vesting period through February 2027.

Compensation expense for stock options granted and restricted stock awarded is measured using the fair value of the award on the grant date and is recognized over the vesting period. The Company recognized stock-based compensation expense for the three months ended March 31, 2024 and March 31, 2023 of $34,000 and $32,000, respectively.

The following table presents a summary of the status of the Company’s non-vested restricted stock awards as of March 31, 2024. Changes during the period then ended are presented further below:

		Weighted
		Average
		Grant Date
	Shares	Fair Value
Non-vested at January 1, 2024	25,322	$	16.21
Vested	(6,141)		16.55
Forfeited	—		—
Granted	9,628		12.35
Non-vested at March 31, 2024	28,809	$	14.85

No stock options were awarded during the three months ended March 31, 2024. Previously granted stock options vest over a period of three to five years and are exercisable at the grant price, which is at least the fair market value of the stock on the grant date. The Plan provides that the option price per share may not be less than the fair market value of the stock on the day the option was granted, and in no event less than the par value of such stock. Options granted under the Plan are exercisable no earlier than one year after the date of grant and expire ten years after the date of the grant. All options previously granted under the Plans are scheduled to expire by February 17, 2025.

Total options outstanding as of March 31, 2024 have an exercise price of $17.80, and a weighted average remaining contractual life of approximately eleven months.

As of March 31, 2024, there was no unrecognized compensation cost related to options granted under the Plan, and no options were exercised under the Plan during the period.

A summary of the status of the outstanding stock options as of March 31, 2024, and changes during the period then ended, is presented below:

	2024
		Weighted
		Average
		Exercise
	Shares	Price
Outstanding at beginning of year	50,425	$	17.76
Granted	—		—
Exercised	—		—
Expired	(24,225)		17.72
Outstanding at end of year	26,200	$	17.80

Employee Stock Purchase Plan

The Company has an Employee Stock Purchase Plan under which employees, through payroll deductions, may purchase shares of Company stock annually. The option price of the stock purchases is between 95% and 100% of the fair market value of the stock on the offering termination date as determined annually by the Board of Directors. The maximum number of shares which employees may purchase under the Plan is 250,000; however, the annual issuance of shares may not exceed 5,000 shares plus any unissued shares from prior offerings. There were no shares issued from treasury under this plan during the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024, there were 152,420 shares reserved for issuance under the Employee Stock Purchase Plan.