STOCK BASED COMPENSATION

9 Months Ended

Sep. 30, 2022

Compensation Related Costs [Abstract]

STOCK BASED COMPENSATION

NOTE 9 – STOCK BASED COMPENSATION

The Company accounts for awards of stock options and restricted stock in accordance with ASC 718-10, “Compensation-Stock Compensation.” ASC 718-10 requires that compensation costs for all stock awards be calculated and amortized over the service period (generally equal to the vesting period). The compensation cost for stock option grants is determined using option pricing models, intended to estimate the fair value of the awards at the grant date less estimated forfeitures. The compensation expense for restricted stock is recognized based on the fair value of the restricted stock awards less estimated forfeitures. The fair value of restricted stock awards is equal to the fair value of the Company’s stock on the grant date. Compensation costs of $1.6 and $3.9 million have been recognized for the three and nine months ended September 30, 2022, respectively, and $735,000 and $2.3 million have been recognized for the three and nine months ended September 30, 2021, respectively.

On January 12, 2022, the Company awarded a total of 25,000 shares of restricted stock to five employees. The grant date fair value of these restricted stock grants was $613,000. These grants vest ratably over 5 years.

On January 12, 2022, the Company awarded a total of 5,508 shares of common stock to nine members of our Board of Directors. The grant date fair value of these awards was $135,000.

On March 23, 2022, the Company awarded a total of 5,598 shares of common stock to nine members of our Board of Directors. The grant date fair value of these awards was $135,000.

On March 25, 2022, the Company awarded a total of 78,000 shares of restricted stock to two employees. The grant date fair value of these restricted stock grants was $1.9 million. These grants vest ratably over 5 years.

On March 28, 2022, the Company granted options to purchase 470,800 shares of common stock to forty-five participants in the Company’s Amended and Restated 2013 Incentive Award Plan. The grant date fair value of these options amounted to $2.1 million. These grants vest ratably over five years.

On June 15, 2022, the Company awarded a total of 3,933 shares of common stock to nine members of our Board of Directors. The grant date fair value of these awards was $68,000.

On September 9, 2022, the Company granted options to purchase 100,000 shares of common stock, to one participant of retirement age, in the Company’s Amended and Restated 2013 Incentive Award Plan. The grant date fair value of these options amounted to $433,000 and is recognized at the time of the grant.

On September 21, 2022, the Company awarded a total of 6,453 shares of common stock to nine members of our Board of Directors. The grant date fair value of these awards was $113,000.

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions used for grants during the nine months ended September 30, 2022:

	2022
Dividend yield		3.47	%
Expected volatility		25.09	%
Risk-free interest rate		2.63	%
Expected lives		10
Estimated forfeitures		0

During the nine months ended September 30, 2022, fourteen participants exercised options to purchase a total of 404,160 shares of common stock at a weighted-average exercise price of $10.38 per share for total proceeds of $4.2 million. The aggregate intrinsic value of options exercised was $4.0 million.

As of September 30, 2022, there were options outstanding to purchase 3.5 million shares, with an aggregate intrinsic value of $8.3 million. There were 1.7 million shares available for grant under the Amended and Restated 2013 Incentive Award Plan.