NOTE 14 – SHARE-BASED COMPENSATION AND SHARE REPURCHASE PLANS

2010 Stock Incentive Plan

The Company may grant stock options and other share-based payment awards of our Class A Stock to eligible employees, directors, and consultants under the 2010 Stock Incentive Plan (the “2010 Plan”), which originally allows for an aggregate total number of 1,250,000 shares of Class A Nonvoting Common Stock authorized for issuance under the 2010 Plan. As of September 30, 2017, there were 302,540 shares authorized for issuance under the 2010 Plan and available for future grants or awards.

During the Company’s 2017 Annual Stockholders’ Meeting held on November 7, 2017, the Company's stockholders, upon recommendation of the Board of Directors, approved an amendment to the Company's 2010 Plan to increase the number of shares of common stock issuable under such plan by an additional 947,460 shares. The effect of the increase is to restore the number of shares of Class A Common Stock available under the 2010 Stock Incentive Plan from the 302,540 shares available as of September 30, 2017, back up to its original reserve of 1,250,000 shares. There were no new grants during the 4th quarter of 2017. During 2018 option grants of 126,840 were issued, restricted stock units of 97,600 issued and 6,410 grants were forfeited. During 2019, option grants of 219,408 were issued, restricted stock units of 59,258 were issued and 25,000 grants were forfeited. Accordingly, as of December 31, 2019, we had 778,304 shares remaining for future issuances.

Since the adoption of the 2010 Plan, the Company has granted awards primarily in the form of stock options or stock grants. In the first quarter of 2016, the Company started to award restricted stock units (“RSUs”) to directors and certain members of management. Stock options are generally granted at exercise prices equal to the grant-date market prices and typically expire no later than five years from the grant date. In contrast to a stock option where the grantee buys the Company’s share at an exercise price determined on grant date, an RSU entitles the grantee to receive one share for every RSU based on a vesting plan. At the discretion of our Compensation and Stock Options Committee, the vesting period of stock options and RSUs ranges from zero to four years. At the time the options are exercised or RSUs vest, at the discretion of management, we will issue treasury shares or make a new issuance of shares to the option or RSU holder.

Stock Options

We estimate the grant-date fair value of our stock options using the Black-Scholes option-valuation model, which takes into account assumptions such as the dividend yield, the risk-free interest rate, the expected stock price volatility, and the expected life of the options. We expense the estimated grant-date fair values of options over the vesting period on a straight-line basis. Based on our historical experience and the relative market price to strike price of the options, we have not hereto estimated any forfeitures of vested or unvested options.

The weighted average assumptions used in the option-valuation model for the years 2019, 2018 and 2017 were as follows:



	2019		2018		2017
Stock option exercise price	$	16.12	$	16.40	$	15.94
Risk-free interest rate		2.42%		2.56%		1.66%
Expected dividend yield		—		—		—
Expected option life in years		3.75		3.75		3.75
Expected volatility		23.32%		24.99%		24.95%
Weighted average fair value	$	3.50	$	3.80	$	3.45

We recorded stock-based compensation expense of $458,000, $425,000, and $310,000 for 2019, 2018, and 2017, respectively. At December 31, 2019, the total unrecognized estimated compensation cost related to non-vested stock options was $1.1 million which is expected to be recognized over a weighted average vesting period of 1.84 years. Cash consideration received from option exercises during 2019, 2018, and 2017 totaled $906,000, $361,000 and $574,000 respectively.

The following is a summary of the status of RDI’s outstanding stock options for the three years ended December 31, 2019:



	Outstanding Stock Options
	Number of Options		Weighted Average Exercise Price				Weighted Average Remaining Years of Contractual Life	Aggregate Intrinsic Value
	Class A	Class B	Class A		Class B		Class A&B	Class A&B
Outstanding - January 1, 2017	535,077	—	$	9.84	$	—	2.61	$	3,615,191
Granted	169,762	—		15.94		—
Exercised	(177,750)	—		7.85		—			702,840
Expired	(2,500)	—		6.23		—
Outstanding - December 31, 2017	524,589	—	$	12.50	$	—	3.15	$	3,054,325
Granted	126,840	—		16.40		—
Exercised	(60,000)	—		6.02		—			610,249
Expired	(4,960)	—		12.08		—
Outstanding - December 31, 2018	586,469	—	$	14.01	$	—	2.88	$	1,530,528
Granted	219,408	—		16.12		—
Exercised	(69,500)	—		13.42		—			185,175
Expired	(25,000)	—		13.42		—
Outstanding - December 31, 2019	711,377	—	$	14.74	$	—	2.79	$	136,350

The following is a summary of the status of RDI’s vested and unvested stock options as of December 31, 2019, 2018 and 2017:



	Vested and Unvested Stock Options
	Number of Options		Weighted Average Exercise Price				Weighted Average Remaining Years of Contractual Life	Aggregate Intrinsic Value
	Class A	Class B	Class A			Class B	Class A&B	Class A&B
Vested
December 31, 2019	273,866	—	$	12.59	$	—	1.87	$	136,350
December 31, 2018	231,124	—		12.38		—	2.28		1,306,643
December 31, 2017	186,832	—		9.84		—	2.30		2,202,772
Unvested
December 31, 2019	437,511	—	$	15.78	$	—	3.36	$	—
December 31, 2018	355,345	—		15.07		—	3.27		223,885
December 31, 2017	337,757	—		13.86		—	3.62		851,552

Restricted Stock Units

We estimate the grant-date fair values of our RSUs using the Company’s stock price at grant-date and record such fair values as compensation expense over the vesting period on a straight-line basis. Prior to November 7, 2018, RSU awards to directors vested 100% in January of the following year in which such RSUs were granted. At the November 7, 2018 Board meeting, it was determined that it would be more appropriate for the vesting of RSUs to align with the director’s term of office. Accordingly, it was determined that, beginning with the November 7, 2018 Board Meeting, RSUs granted to directors would vest on the first to occur of (i) 5:00 pm, Los Angeles, CA time on the last business day prior to the one-year anniversary of the grant date, or (ii) the date on which the recipient’s term as a director shall end and the recipient, or as the case may be, the recipient’s successor is elected to the board of directors at the next occurring annual meeting or special meeting of stockholders called for such purpose (the “Vesting Date”). This means that, due to the fact that the Company moved up its annual meeting of stockholders from November to May in 2019 the Vesting Date of the RSUs granted to directors on November 7, 2018 was May 7, 2019. Since this created a shorter than normal vesting period for the RSUs issued on November 7, 2018, the award of RSUs to directors made immediately following the 2019 Annual Meeting of Stockholders was reduced to a value of $35,000, an amount equal to one half of 2018 annual grant.

During the years ended December 31, 2019 and December 31, 2018, we recognized compensation expense related to RSUs of $1.0 million and $1.0 million respectively. The total unrecognized compensation expense related to these unvested RSUs was $1.3 million as of December 31, 2019.

Below is a table that shows the restricted stock units that have been issued and vested during the years ending December 31, 2019 along with the dollar value of these awards:



	Number of RSUs					$ value of RSUs
	Granted	Vesting	Forfeited	Unvested	Granted		Vesting			Forfeited	Unvested
2016	68,153	59,646	517	7,990	$	810,779	$	708,904	$	6,245	$	95,629
2017	70,538	52,465	—	18,073		1,124,348		836,258		—		288,090
2018	97,600	63,480	932	33,188		1,581,512		1,021,776		15,005		544,731
2019	59,258	—	—	59,258		944,070		—		—		944,070
Total	295,549	175,591	1,449	118,509	$	4,460,709	$	2,566,938	$	21,250	$	1,872,520

2017 Stock Repurchase Plan

On March 14, 2019, the Board of Directors extended our Company’s stock repurchase program for two years, through March 2, 2021. The Board did not increase the authorized amount, which was initially fixed at $25.0 million. On March 10, 2020, the Board increased the authorized amount by $25.0 million and extended it to March 2, 2022. At the present time, the repurchase program authorization is $26.0 million.