Note 16 - Stock-Based Compensation

12 Months Ended

Dec. 31, 2021

Notes to Financial Statements

Stock-Based Compensation

Note 16. Stock-Based Compensation

The Company’s Board of Directors adopted in February 2010, and the stockholders approved in May 2010, the QCR Holdings, Inc. 2010 Equity Incentive Plan (“2010 Equity Incentive Plan”). The Company’s Board of Directors adopted in February 2013, and the stockholders approved in May 2013, the QCR Holdings, Inc. 2013 Equity Incentive Plan (“2013 Equity Incentive Plan”). The Company’s Board of Directors adopted in February 2016, and the stockholders approved in May 2016, the QCR Holdings, Inc. 2016 Equity Incentive Plan (“2016 Equity Incentive Plan”). Up to 350,000, 350,000, and 400,000 shares of common stock, respectively, may be issued to employees and directors of the Company and its subsidiaries pursuant to equity incentive awards granted under these plans.

The 2010 Equity Incentive Plan, the 2013 Equity Incentive Plan, and the 2016 Equity Incentive Plan (collectively, the “Equity Plans”) are administered by the Compensation Committee of the Board of Directors (the “Committee”). As of December 31, 2021, there were 132,375 remaining shares of common stock available for the grant of future awards under the Equity Plans; however, such future awards may be granted only under the 2016 Equity Incentive Plan.

The number and exercise price of options granted under the Equity Plans are determined by the Committee at the time the option is granted. In no event can the exercise price be less than the value of the common stock at the date of the grant for stock options. All options have a 10-year life and will vest and become exercisable from 3-to-7 years after the date of the grant.

Note 16. Stock-Based Compensation (continued)

Stock-based compensation expense was reflected in the Consolidated Financial Statements as follows for the years ended December 31, 2021, 2020, and 2019.

	2021		2020		2019
	(dollars in thousands)
Stock options	$	270	$	297	$	475
Restricted stock awards		1,864		1,619		1,850
Stock purchase plan		218		234		144
	$	2,352	$	2,150	$	2,469

Stock options:

A summary of the stock option plans as of December 31, 2021, 2020, and 2019 and changes during the years then ended is presented below:

	December 31,
	2021				2020				2019
			Weighted				Weighted				Weighted
			Average				Average				Average
			Exercise				Exercise				Exercise
	Shares		Price		Shares		Price		Shares		Price
Outstanding, beginning		407,763	$	22.24		426,913	$	20.14		469,572	$	18.52
Granted		22,150		43.61		23,350		39.12		20,200		36.00
Exercised		(60,317)		15.76		(41,650)		10.67		(59,393)		12.11
Forfeited		(1,598)		38.50		(850)		19.94		(3,466)		31.59
Outstanding, ending		367,998		24.46		407,763		22.24		426,913		20.14
Exercisable, ending		318,266				354,899				365,084
Weighted average fair value per option granted	$	10.85			$	10.07			$	11.29

A further summary of options outstanding as of December 31, 2021 is presented below:

	Options Outstanding
		Weighted			Options Exercisable
		Average	Weighted			Weighted
		Remaining	Average			Average
Range of	Number	Contractual	Exercise		Number	Exercise
Exercise Prices	Outstanding	Life	Price		Exercisable	Price
$9.30	29,406	0.08	$	9.30	29,406	$	9.30
$15.50 to $15.65	64,106	1.25		15.64	64,066		15.64
$17.10 to $18.00	110,499	2.57		17.31	110,459		17.31
$22.64 to $29.77	55,216	4.20		22.83	53,716		22.64
$36.00 to $41.95	37,834	7.66		38.25	14,360		37.84
$42.65 to $48.50	70,937	6.59		43.78	46,259		43.84
	367,998				318,266

Note 16. Stock-Based Compensation (continued)

Restricted stock awards:

A summary of changes in the Company’s nonvested restricted stock, restricted stock unit and performance stock unit awards as of December 31, 2021, 2020 and 2019 is presented below:

	December 31,
	2021		2020		2019
Outstanding, beginning		102,489		106,826		64,099
Granted*		38,360		34,559		85,961
Released		(43,691)		(37,296)		(37,624)
Forfeited		(51)		(1,600)		(5,610)
Outstanding, ending		97,107		102,489		106,826
Weighted average fair value per share granted	$	45.18	$	39.39	$	20.14

*  At December 31, 2021, includes 12,412 shares of restricted stock, 25,948 restricted stock units.

At December 31, 2020, includes 8,913 shares of restricted stock and 25,646 restricted stock units.

At December 31, 2019, includes 18,634 shares of restricted stock, 49,269 restricted stock units and 18,058 restricted stock units.

The total grant value of restricted stock, restricted stock unit and performance share unit awards that were released during the years ended December 31, 2021, 2020 and 2019 was $1.9 million, $1.4 million and $1.3 million, respectively.

Stock purchase plan:

The Company’s Board of Directors and its stockholders adopted in October 2002 the QCR Holdings, Inc. Employee Stock Purchase Plan (the “Purchase Plan”). On May 2, 2012, the Company’s stockholders approved a complete amendment and restatement of the Purchase Plan. As of January 1, 2021, there were 61,186 shares of common stock available for issuance under the Purchase Plan. For each six-month offering period, the Board of Directors will determine how many of the total number of available shares will be offered. The purchase price is the lesser of 85% or the fair market value at the date of the grant or the investment date. The investment date, as established by the Board of Directors, is the date common stock is purchased after the end of each calendar quarter during an offering period. The maximum dollar amount any one participant can elect to contribute in an offering period is $10 thousand. Additionally, the maximum percentage that any one participant can elect to contribute is 15% of his or her compensation for the years ended December 31, 2021, 2020 and 2019.  Information for the stock purchase plan for the years ended December 31, 2021, 2020 and 2019 is presented below:

	2021		2020		2019
Shares granted		28,396		38,738		29,882
Shares purchased		30,543		37,114		28,775
Weighted average fair value per share granted	$	7.67	$	6.03	$	4.81