STOCK COMPENSATION

12 Months Ended

Dec. 31, 2021

STOCK COMPENSATION

The Company recorded stock compensation of $3.4 million, $2.5 million, and $1.4 million in 2021, 2020, and 2019, respectively.

Titan International, Inc. Equity and Incentive Compensation Plan

The Company adopted a new Titan International, Inc. Equity and Incentive Compensation Plan at the 2021 Annual Meeting of Stockholders to provide stock compensation as a means of attracting and retaining qualified independent directors and employees for the Company. A total of 4.3 million shares are available for future issuance under the equity incentive plan at December 31, 2021.

Stock Options

Under this plan (or its predecessor plan), the Company granted no stock options in 2021, 2020, and 2019. The exercise price of stock options may not be less than the fair market value of the common stock on the date of the grant. The vesting and term of each option is set by the Board of Directors. All options outstanding at December 31, 2021 are fully vested and expire 10 years from the grant date.

The following is a summary of activity in stock options during the year ended December 31, 2021:


	Shares Subject to Option	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life (in Years)	Aggregate Intrinsic Value (in thousands)
Outstanding, December 31, 2020	660,700	$	16.97
Granted	—	—
Exercised	—	—
Forfeited/Expired	(207,500)	22.50
Outstanding, December 31, 2021	453,200	14.44		3.79	$	237,900
Exercisable, December 31, 2021	453,200	14.44		3.79	$	237,900

No stock options were granted or exercised in 2021, 2020 and 2019. The Company currently uses treasury shares to satisfy any stock option exercises. At December 31, 2021 and 2020, the Company had 0.1 million and 0.1 million shares of treasury stock, respectively.

The Company uses the Black-Scholes option pricing model to determine the fair value of its stock options. The determination of the fair value of stock option awards on the date of grant using option pricing models is affected by the Company’s stock price, as well as assumptions regarding a number of complex and subjective variables. These variables include the Company’s expected stock price volatility over the expected term of the awards, actual and projected stock option exercise behaviors, risk-free interest rates, and expected dividends. The expected term of options represents the period of time over which options are expected to be outstanding and is estimated based on historical experience. Expected volatility is based on the historical volatility of the Company’s common stock calculated over the expected term of the option. The risk-free interest rate is based on U.S. Treasury yields in effect at the date of grant.

Restricted Stock

Under this plan (or its predecessor plan), the Company granted 438,195, 1,026,946, and 355,201 restricted stock awards under this plan in 2021, 2020 and 2019, respectively. The restricted stock awards to employees vest over a period of three years. The restricted stock awards to the members of the Company's Board of Directors vest over a period of one year.


	Shares	Weighted Average Grant Date Fair Value
Unvested at December 31, 2020	1,144,377	$	2.54
Granted	438,195	9.13
Vested	(840,703)	2.75
Forfeited/Expired	(19,000)	4.49
Unvested at December 31, 2021	722,869	6.25

Pre-tax unrecognized compensation expense for unvested restricted stock was $3.1 million at December 31, 2021, and will be recognized as an expense over a weighted-average period of 1.8 years.

The fair value of restricted stock vested, based on the stock's fair value on the vesting date, was $7.5 million, $1.3 million, and $0.6 million for the years ended December 31, 2021, 2020, and 2019, respectively.

2021 Performance Share Awards

On December 28, 2021, the Company awarded certain named executive officers grants of long-term performance shares based on the achievement of certain adjusted-EBITDA targets for the fiscal years commencing January 1, 2021 and ending December 31, 2024. The Company recorded $0.9 million of stock compensation expense associated with these awards for the year ended December 31, 2021.