10.	Shareholders ' Equity

Repurchase Program

During the year ended

December 31, 2020,

the Company repurchased and retired

223,100

shares of its common stock for

$2,666,000.

During the year ended

December 31, 2019,

the Company repurchased and retired

683,910

shares of its common stock for

$2,548,000.

As of

December 31, 2020,

the Company had

$4,486,000

available to repurchase common shares under the repurchase program.

Option Activity

The

2004

Stock Option Plan (the

“2004

Plan”) is an equity compensation plan that provides for grants of stock options to eligible individuals. The

2004

Plan is intended to recognize the contributions made to the Company by key employees of the Company, provide key employees with additional incentive to devote themselves to the future success of the Company and improve the ability of the Company to attract, retain and motivate individuals. The

2004

Plan also is intended as an incentive to certain members of the Board of Directors of the Company to continue to serve on the Board of Directors and to devote themselves to the future success of the Company.

The

2004

Plan provides for a total of

5,000,000

common shares eligible for issuance.

Under the

2004

Plan, approximately

5,009,750

options had been granted as of

December 31, 2019.

Under the

2004

Plan, option grants have a

three

-year vesting period and, since

2005,

expire

later than the

fifth

anniversary from the date of grant. The exercise price of the options is determined based on the fair market value of the stock on the date of grant.

At the Company's

2020

Annual Meeting of Shareholders held on

June 9, 2020,

the Company's shareholders approved the Alpha Pro Tech, Ltd.

2020

Omnibus Incentive Plan (the

“2020

Incentive Plan”). The

2020

Incentive Plan provides for the grant of incentive and nonqualified stock options, stock appreciation rights, awards of restricted stock and restricted stock units, performance share awards, cash awards and other equity-based awards to employees (including officers), consultants and non-employee directors of the Company and its affiliates. A total of

1,800,000

shares of the Company's common stock are reserved for issuance under the

2020

Incentive Plan, plus the number of shares underlying any award granted under the

2004

Option Plan that expires, terminates or is cancelled or forfeited under the terms of the

2004

Option Plan. As a result of the approval of the

2020

Incentive Plan,

future equity awards will be made pursuant to the

2004

Option Plan. Although

new awards

may

be granted under the

2004

Option Plan, all previously granted awards under the

2004

Option Plan will continue to be governed by the terms of the

2004

Option Plan. As of

December 31, 2020,

8,912

restricted stock equity awards had been granted under the

2020

Incentive Plan, the compensation expense associated with the

one

year vest of these awards is

$6,000.

As of

December 31, 2020,

$102,000

of total unrecognized compensation cost related to the restricted stock grants was expected to be recognized over a weighted-average remainder period of

.942

years.

The following table summarizes option activity for the years ended

December 31, 2020

and

2019:

				Weighted
				Average
				Exercise Price
	Shares			Per Option

Options outstanding, December 31, 2018		1,022,913		$	2.69
Granted to employees and directors		370,000			3.59
Exercised		(66,499	)		1.96
Canceled/expired/forfeited		-			-
Options outstanding, December 31, 2019		1,326,414			2.86
Granted to employees and directors		-			-
Exercised		(757,674	)		2.64
Canceled/expired/forfeited		-			-
Options outstanding, December 31, 2020		568,740			3.37
Options exercisable, December 31, 2020		200,500			3.48

Stock options to purchase

568,740

and

1,326,414

shares of common stock were outstanding as of

December 31, 2020

and

2019,

respectively. All of the stock options were included in the computation of the weighted-average number of dilutive common shares outstanding for the year ended

December 31, 2020.

All except

455,000

of the stock options, which were anti-dilutive, were included in the computation of the weighted-average number of dilutive common shares outstanding for the year ended

December 31, 2019.

The fair values of the share-based compensation awards granted were estimated using the Black-Scholes option-pricing model with the following assumptions and weighted average fair values:

	Stock Options
	For the Years Ended December 31,
	2020		2019
Exercise price		-	$	3.59
Risk-free interest rate		-		2.23	%
Expected volatility		-		32.17	%
Expected life in years		-		4.25
Black-Scholes fair value		-	$	1.06

The Company used the Black-Scholes option-pricing model to value the options. The Company uses historical data to estimate the expected term of the options. The risk-free interest rate for periods consistent with the expected term of the award is based on the U.S. Treasury rates in effect at the time of grant. The expected volatility is based on historical volatility. The Company uses an estimated dividend payout ratio of zero, as the Company has

not

paid dividends in the past and, at this time, does

not

expect to do so in the foreseeable future. The Company accounts for option forfeitures as they occur.

The following table summarizes information about stock options as of

December 31, 2020:

			Options Outstanding								Options Exercisable
Range of Exercise Prices			Options		Weighted Average Exercise Price		Weighted Average Remaining Contract Life (in years)		Aggregate Intrinsic Value		Options		Weighted Average Exercise Price		Weighted Average Remaining Contract Life (in years)		Aggregate Intrinsic Value

$1.58	-	$3.90		568,710	$	3.37		2.84	$	4,473,000		200,500	$	3.48		2.63	$	1,601,000

The intrinsic value is the amount by which the market value of the underlying common stock exceeds the exercise price of the respective stock options. The aggregate intrinsic value of stock options exercised during the years ended

December 31, 2020

and

2019

was

$10,772,000

and

$121,000,

respectively.

As of

December 31, 2020,

$227,000

of total unrecognized compensation cost related to stock options was expected to be recognized over a weighted-average remaining period of

1.16

years. Cash received from

757,674

options exercised for the year ended

December 31, 2020

was

$1,998,000.

Dividends

The holders of the Company's common stock are entitled to receive such dividends as

may

be declared by the Board of Directors of the Company from time to time to the extent that funds are legally available for payment thereof. The Company has never declared or paid any dividends on any of its outstanding shares of common stock. The Board of Directors' current policy is

not

to pay dividends but rather to use available funds to repurchase common shares in accordance with the Company's repurchase program and to fund the continued development and growth of the Company. Consequently, the Company currently has

plans to pay cash dividends in the foreseeable future.