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STOCK COMPENSATION PLAN

9 Months Ended

Sep. 30, 2024

STOCK COMPENSATION PLAN

STOCK COMPENSATION PLAN

NOTE 8 — STOCK COMPENSATION PLAN

Equity Incentive Plan

At September 30, 2024, the Company maintained three stock compensation plans, the Amended and Restated 2022 Equity Incentive Plan (the “2022 EIP”), the 2019 Equity Incentive Plan (the “2019 EIP”) and the 2009 Equity Incentive Plan (the “2009 EIP”). The 2019 EIP expired on May 31, 2022 but has outstanding restricted stock awards subject to vesting schedules. The 2009 EIP has also expired but had outstanding stock options that were exercised in 2023.

The 2022 EIP was approved on May 31, 2022 by the stockholders of the Company. On May 29, 2024, the stockholders of the Company approved the amendment and restatement of the 2022 EIP increasing the number of shares of common stock that may be issued under the plan by 358,000. Under the Amended and Restated 2022 EIP, the remaining maximum number of shares of stock that may be delivered to participants in the form of restricted stock, restricted stock units and stock options, including ISOs and non-qualified stock options is 295,750 at September 30, 2024, subject to adjustment as set forth in the 2022 EIP, plus any awards that are made available under the 2019 EIP after March 15, 2022.

Stock Options

At September 30, 2024, no stock options were outstanding. There was no compensation cost related to stock options during the three and nine months ended September 30, 2024. There was no unrecognized compensation cost related to stock options at September 30, 2024 and December 31, 2023.

Restricted Stock Awards and Restricted Stock Units

The Company issued restricted stock awards and restricted stock units under the 2022 EIP, 2019 EIP and the 2009 EIP (collectively, “restricted stock grants”) to certain key personnel. Each restricted stock grant vests based on the vesting schedule outlined in the restricted stock grant agreement. Restricted stock grants are subject to forfeiture if the holder is not employed by the Company on the vesting date.

In the first quarter of 2024 and 2023, 168,469 and 170,998 restricted stock grants were issued to certain key personnel, respectively. One-third of these shares vest each year for three years beginning on March 1, 2025 and March 1, 2024, respectively. Total compensation cost that has been charged against income for restricted stock grants was $1.8 million and $5.2 million for the three and nine months ended September 30, 2024, respectively. Total compensation cost that has been charged against income for restricted stock grants was $1.7 million and $4.6 million for the three and nine months ended September 30, 2023 respectively. As of September 30, 2024, there was $8.6 million of total unrecognized compensation expense related to the restricted stock awards. The cost is expected to be recognized over a weighted-average period of 1.81 years.

In January 2024, 27,500 restricted shares were granted to members of the Company’s Board of Directors. These shares vest in January 2025. In January 2023, 27,500 restricted shares were granted to members of the Board of Directors. These shares vested in January 2024. Total expense for the awards granted to members of the Board of Directors was $341,000 and $1.0 million for the three and nine months ended September 30, 2024, respectively. Total expense for the awards granted to members of the Board of Directors was $388,000 and $1.2 million for the three and nine months ended September 30, 2023, respectively. As of September 30, 2024, total unrecognized expense for these awards was $341,000.

The following table summarizes the changes in the Company’s restricted stock grants:


		Nine months ended
		September 30, 2024
				Weighted Average
				Grant Date
		Number of		Fair Value
		Shares		per Share
Outstanding, beginning of period		233,852		$	63.98
Granted		195,969			42.28
Forfeited		(17,681)			51.99
Vested		(128,830)			49.82
Outstanding at end of period		283,310		$	56.16

Performance-Based Stock Units

During the second quarter of 2022, the Company established a long-term incentive award program under the 2022 EIP. Under the program, 73,260 PRSUs were awarded in the second quarter of 2024, which vest over a three-year period beginning in June 2025 if certain performance criteria are met. The weighted average service inception date fair value of the outstanding awarded shares was $3.0 million. Total compensation cost that has been charged against income for these PRSUs was $275,000 and $365,000 for the three and nine months ended September 30, 2024.

During the second quarter of 2021, the Company established a long-term incentive award program under the 2019 EIP. Under the program, 90,000 PRSUs were awarded. During the second quarter of 2022, 20,800 PRSUs were forfeited and reissued pursuant to the 2022 EIP. The weighted average service inception date fair value of the outstanding awarded shares was $6.0 million. At the beginning of 2024, 2023, and 2022, 30,800, 29,200 and 30,000 PRSUs, respectively, vested as all performance criteria were met. All 90,000 vested shares were delivered in the first quarter of 2024. There was no compensation cost charged against income for these PRSUs for the three and nine months ended September 30, 2024. Total compensation cost that has been charged against income for these PRSUs was $550,000 and $1.6 million for the three and nine months ended September 30, 2023, respectively.