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Shareholders' Equity, Stock Plans and Preferred Stock
 12 Months Ended
Dec. 31, 2020
Share-based Payment Arrangement [Abstract]  
Shareholders' Equity, Stock Plans and Preferred Stock SHAREHOLDERS' EQUITY, STOCK PLANS AND PREFERRED STOCK
Stock Based Compensation Plans
The Company follows the FASB's guidance on Stock Compensation to account for stock-based payments granted to employees and non-employee directors.
Overview of Plans
In June 2008, the Company adopted the Advocat Inc. 2008 Stock Purchase Plan for Key Personnel (“Stock Purchase Plan”). The Stock Purchase Plan provides for the granting of rights to purchase shares of the Company's common stock to directors and officers and 150 shares of the Company's common stock has been reserved for issuance under the Stock Purchase Plan. The Stock Purchase Plan allows participants to elect to utilize a specified portion of base salary, annual cash bonus, or director compensation to purchase restricted shares or restricted share units (“RSU's”) at 85% of the quoted market price of a share of the Company's common stock on the date of purchase. The restriction period under the Stock Purchase Plan is generally two years from the date of purchase and during which the shares will have the rights to receive dividends, however, the restricted share certificates will not be delivered to the shareholder and the shares cannot be sold, assigned or disposed of during the restriction period and are subject to forfeiture. In June 2016, our shareholders approved an amendment to the Stock Purchase Plan to increase the number of shares of our common stock authorized under the Plan from 150 shares to 350 shares. No grants can be made under the Stock Purchase Plan after April 25, 2028.
In April 2010, the Compensation Committee of the Board of Directors adopted the 2010 Long-Term Incentive Plan (“2010 Plan”), followed by approval by the Company's shareholders in June 2010. The 2010 Plan allows the Company to issue stock appreciation rights, stock options and other share and cash based awards. In June 2017, our shareholders approved an amendment to the Long-Term Incentive Plan to increase the number of shares of our common stock authorized under the Plan from 380 shares to 680 shares. No grants can be made under the 2010 Plan after May 31, 2027.
Equity Grants and Valuations
During 2020 and 2019, the Compensation Committee of the Board of Directors approved grants totaling 198 and 151, respectively, shares of restricted common stock to certain employees and members of the Board of Directors. These restricted shares vest one-third on the first, second and third anniversaries of the grant date. Unvested shares may not be sold or transferred. During the vesting period, dividends accrue on the restricted shares, but are paid in additional shares of common stock upon vesting, subject to the vesting provisions of the underlying restricted shares. The restricted shares are entitled to the same voting rights as other common shares. Upon vesting, all restrictions are removed. Our policy is to account for forfeitures of share-based compensation awards as they occur. On March 31, 2020, the Compensation Committee of the Board of Directors approved the grant of 100 shares of common stock to the Company's Chief Executive Officer, as a one-time bonus in lieu of a 2020 salary increase and as recognition for completing the settlement with the Office of the Inspector General and the disposition of all the Company's facilities in the State of Kentucky. The stock was fully vested on the date of the grant, and the grant date fair value of which was expensed during the quarter ended March 31, 2020.
The Company recorded non-cash stock-based compensation expense from continuing operations for equity grants and RSU's issued under the Plans of $570 and $573 during the years ended December 31, 2020 and 2019, respectively. Such amounts are included as components of general and administrative expense or operating expense based upon the classification of cash compensation paid to the related employees. As of December 31, 2020, there was $196 in unrecognized compensation costs related to stock-based compensation to be recognized over the applicable remaining vesting periods. The Company estimated the total recognized and unrecognized compensation for all options and SOSARs using the Black-Scholes-Merton equity grant valuation model. Restricted stock awards are valued using the market price on the grant date.
The table below shows the weighted average assumptions the Company used to develop the fair value estimates under its option valuation model:
Year Ended December 31,
20202019
Expected volatility (range)
N/A(1)
N/A(1)
Risk free interest rate (range)
N/A(1)
N/A(1)
Expected dividends
N/A(1)
N/A(1)
Weighted average expected term (years)
N/A(1)
N/A(1)
___________
(1)The Company did not issue any options or other equity grants that would require application of the Black-Scholes-Merton equity grant valuation model during the years ended December 31, 2020 and 2019. All equity grants during
these periods were restricted common shares which are valued using an intrinsic valuation method based on market price.
In computing the fair value estimates using the Black-Scholes-Merton valuation model, the Company took into consideration the exercise price of the equity grants and the market price of the Company's stock on the date of grant. The Company used an expected volatility that equals the historical volatility over the most recent period equal to the expected life of the equity grants. The risk free interest rate is based on the U.S. treasury yield curve in effect at the time of grant. The Company used the expected dividend yield at the date of grant, reflecting the level of annual cash dividends currently being paid on its common stock.
In computing the fair value of these equity grants, the Company estimated the equity grants' expected term based on the average of the vesting term and the original contractual terms of the grants.
The table below describes the resulting weighted average grant date fair values calculated as well as the intrinsic value of options exercised under the Company's equity awards during each of the following years:
Year Ended
December 31,
2020(1)
    2019(1)
Weighted average grant date fair value$— $— 
Total intrinsic value of exercises$— $3 
___________
(1)The Company did not issue any options or other equity grants that would require application of the Black-Scholes-Merton equity grant valuation model during the years ended December 31, 2020 and 2019. All equity grants during this period were restricted common shares which are valued using an intrinsic valuation method based on market price.


The following table summarizes information regarding stock options and SOSAR grants outstanding as of December 31, 2020:
Weighted
AverageIntrinsicIntrinsic
Range ofExerciseGrantsValue-GrantsGrantsValue-Grants
Exercise Prices1PricesOutstandingOutstandingExercisableExercisable
$8.14 to $10.21
$8.83 45 $— 45 $— 
$5.86 $5.86 20 $— 20 $— 
65 65 

As of December 31, 2020, the outstanding equity grants have a weighted average remaining life of 5.26 years and those outstanding equity grants that are exercisable have a weighted average remaining life of 5.26 years. During the year ended December 31, 2020, no stock option and SOSAR grants were exercised under these plans.
Summarized activity of the equity compensation plans is presented below:
Weighted
SOSARs/Average
OptionsExercise Price
Outstanding, December 31, 201976 $7.55 
Granted— — 
Exercised— — 
Expired or cancelled(11)5.45 
Outstanding, December 31, 202065 $7.92 
Exercisable, December 31, 202065 $7.92 
Weighted
Average
RestrictedGrant Date
SharesFair Value
Outstanding, December 31, 2019207 $5.28 
Granted198 2.00 
Dividend Equivalents— — 
Vested(187)3.93 
Cancelled(25)4.55 
Outstanding, December 31, 2020193 $3.32 

Summarized activity of the Restricted Share Units for the Stock Purchase Plan is as follows:
Weighted
Average
RestrictedGrant Date
Share UnitsFair Value
Outstanding, December 31, 201948 $5.08 
Granted28 2.00 
Dividend Equivalents— — 
Vested(21)6.45 
Cancelled— — 
Outstanding December 31, 202055 $2.92 


Preferred Stock
The Company is authorized to issue up to 195 shares of Preferred Stock. The Company's Board of Directors is authorized to establish the terms and rights of each series, including the voting powers, designations, preferences, and other special rights, qualifications, limitations, or restrictions thereof.