Stock-Based Compensation

3 Months Ended

Mar. 31, 2023

Stock-Based Compensation

Stock-Based Compensation

Note 12 – Stock-Based Compensation

Stock Incentive Plan

We adopted the Trinity Place Holdings Inc. 2015 Stock Incentive Plan (the “SIP”), effective September 9, 2015. Prior to the adoption of the SIP, we granted restricted stock units (“RSUs”) to our executive officers and employees pursuant to individual agreements. The SIP, which has a ten-year term, authorizes (i) stock options that do not qualify as incentive

stock options under Section 422 of the Code, or NQSOs, (ii) stock appreciation rights, (iii) shares of restricted and unrestricted common stock, and (iv) RSUs. The exercise price of stock options will be determined by the compensation committee, but may not be less than 100% of the fair market value of the shares of common stock on the date of grant. To date, no stock options have been granted under the SIP. The SIP initially authorized the issuance of up to 800,000 shares of common stock. In June 2019, our stockholders approved an amendment and restatement of the SIP, including an increase to the number of shares of common stock available for awards under the SIP by 1,000,000 shares and in June 2021, our stockholders approved an increase to the number of shares of common stock available for awards under the SIP by 1,500,000 shares.  Our SIP activity as of March 31, 2023 and December 31, 2022 was as follows:

	Three Months Ended			Year Ended
	March 31, 2023			December 31, 2022
		Weighted			Weighted
		Average Fair			Average Fair
	Number of	Value at		Number of	Value at
	Shares	Grant  Date		Shares	Grant Date
Balance available, beginning of period	1,057,824		-	1,569,449		-
Granted to employees	(304,000)	$	0.74	(333,500)	$	1.84
Granted to non-employee directors	(36,533)	$	0.74	(86,408)	$	1.25
Deferred under non-employee director's deferral program	(64,357)	$	0.74	(152,217)	$	1.25
Forfeitures by former employees	—	$	—	60,500	$	1.68
Balance available, end of period	652,934		-	1,057,824		-

Restricted Stock Units

We grant RSUs to certain executive officers and employees as part of compensation. These grants generally have vesting dates ranging from immediate vest at grant date to three years, with a distribution of shares at various dates ranging from the time of vesting up to seven years after vesting. Shares that are forfeited are added back into the pool of shares available under the SIP, and any recorded expense related to forfeited shares are reversed in the year of forfeiture.

During the three months ended March 31, 2023, we granted 304,000 RSUs to certain employees. These RSUs vest and settle at various times over a two or three year period, subject to each employee’s continued employment. Approximately $36,000 in stock-based compensation expense related to these shares was amortized during the three months ended March 31, 2023, of which approximately $1,000 was capitalized into residential condominium units for sale with the remaining net amount recognized in the consolidated statements of operations and comprehensive loss.

Total stock-based compensation expense for the three months ended March 31, 2023 and 2022 totaled $95,000 and $151,000, respectively, of which approximately $2,000 and $23,000, respectively, was capitalized as part of residential condominium units for sale with the remaining net amount recognized in the consolidated statements of operations and comprehensive loss.

Our RSU activity was as follows:

	Three Months Ended			Year Ended
	March 31, 2023			December 31, 2022
		Weighted			Weighted
		Average Fair			Average Fair
	Number of	Value at Grant		Number of	Value at Grant
	Shares	Date		Shares	Date
Non-vested at beginning of period	527,999	$	1.80	551,083	$	2.14
Granted RSUs	304,000	$	0.74	333,500	$	1.84
Vested	(284,416)	$	1.90	(296,084)	$	2.22
Forfeited by former employees	—	$	—	(60,500)	$	1.68
Non-vested at end of period	547,583	$	1.16	527,999	$	1.80

As of March 31, 2023, there was approximately $359,000 of total unrecognized compensation expense related to unvested RSUs, which is expected to be recognized through December 2025.

During the three months ended March 31, 2023, we issued 418,446 shares of common stock to employees and executive officers to settle vested RSUs from previous RSU grants. In connection with those transactions, we repurchased 199,704 shares to provide for the employees’ withholding tax liabilities.

During the three months ended March 31, 2023, we issued 36,533 shares of immediately vested common stock to non-employee directors who received a portion of their annual compensation in shares of the Company’s common stock.

Director Deferral Program

Our Non-Employee Director’s Deferral Program (the “Deferral Program”), as amended in December 2018, allows our non-employee directors to elect to receive the cash portion of their annual compensation in shares of the Company’s common stock, as well as to defer receipt of the portion of their annual board compensation that is paid in equity. Any deferred amounts are paid under the SIP (as is non-employee directors’ annual equity compensation that is not deferred). Compensation deferred under the Deferral Program is reflected by the grant of stock units equal to the number of shares that would have been received absent a deferral election. The stock units, which are fully vested at grant, generally will be settled under the SIP for an equal number of shares of common stock within 10 days after the participant ceases to be a director. In the event that we distribute dividends, each participant shall receive a number of additional stock units (including fractional stock units) equal to the quotient of (i) the aggregate amount of the dividend that the participant would have received had all outstanding stock units been shares of common stock divided by (ii) the closing price of a share of common stock on the date the dividend was issued.

As of March 31, 2023, a total of 501,487 stock units have been deferred under the Deferral Program.