The following table details the Company’s dividend activity for the nine months ended September 30, 2021 and 2020 (amounts in thousands, except per share data):

(a)	A dividend of $0.45 per share was declared in each period indicated.

(b)	Stockholders were entitled to elect whether the dividend payable to them would be paid in cash or shares of the Company’s common stock at the percentages indicated, subject to certain limitations.

(c)	The shares of common stock issued were valued at approximately $17.22 per share.

(d)	The shares of common stock issued were valued at approximately $16.27 per share.

NOTE 11 – STOCKHOLDERS’ EQUITY (CONTINUED)

Stock Based Compensation

The Company’s 2019 Incentive Plan (“Plan”), approved by the Company’s stockholders in June 2019, permits the Company to grant, among other things, stock options, restricted stock, RSUs, performance share awards and dividend equivalent rights and any one or more of the foregoing to its employees, officers, directors and consultants. A maximum of 750,000 shares of the Company’s common stock is authorized for issuance pursuant to this Plan. As of September 30, 2021, an aggregate of 524,952 shares subject to awards in the form of restricted stock (294,200 shares) and RSUs (230,752 shares) are outstanding under the Plan.

Under the Company’s 2016 equity incentive plan (the “Prior Plan”), as of September 30, 2021, (i) an aggregate of 412,350 shares in the form of restricted stock are outstanding and have not yet vested, and (ii) with respect to 76,250 shares of common stock underlying RSUs that had been granted in each of 2018 and 2017, 73,750 and 24,343 shares were deemed to have vested in 2021 and 2020, respectively, and such shares were issued after the Compensation Committee determined that the metrics with respect to the vesting of such shares had been satisfied. RSUs with respect to the 2,500 and 51,907 share balances under the 2018 and 2017 RSU grants were forfeited in 2019 and 2020, respectively. No additional awards may be granted under the Prior Plan.

For accounting purposes, the restricted stock is not included in the shares shown as outstanding on the balance sheet until they vest; however, dividends are paid on the unvested shares. The restricted stock grants are charged to General and administrative expense over the respective vesting periods based on the market value of the common stock on the grant date. Unless earlier forfeited because the participant’s relationship with the Company terminated, unvested restricted stock awards vest five years from the grant date, and under certain circumstances may vest earlier.

During the third quarter of 2021, 2020 and 2019, the Company granted RSUs exchangeable for up to 80,700, 75,026 and 77,776 shares of common stock upon satisfaction, through June 30, 2024, June 30, 2023 and June 30, 2022, respectively, of metrics related to average annual total stockholder return (the “TSR Metric”) and average annual return on capital (the “ROC Metric”; together with the TSR Metric, the “Metrics”). Up to 50% of the RSUs vest upon satisfaction of the TSR Metric (the “TSR Awards”) and up to 50% of the RSUs vest upon satisfaction of the ROC Metric (the “ROC Awards”). The RSUs vest only if the recipient maintains a relationship with the Company during the applicable three-year performance cycle. RSUs are not entitled to voting or dividends rights; however, upon vesting, the holders of the RSUs granted in 2021 are entitled to receive an amount equal to the dividends that would have been paid on the underlying shares had such shares been outstanding during the three-year performance cycle. The Company accrued $18,000 for such dividend equivalent rights based on the number of shares underlying the 2021 RSUs that would be issued based on performance and market assumptions determined as of September 30, 2021.

The TSR Metrics and ROC Metrics meet the definition of a market condition and performance condition, respectively. The shares underlying the RSUs are excluded from the shares shown as outstanding on the balance sheet. For the TSR Awards, a third party appraiser prepared a Monte Carlo simulation pricing model to determine the fair value of such awards, which is recognized ratably over the service period. The Monte Carlo valuation consisted of computing the grant date fair value of the awards using the Company’s simulated stock price. For the 2021 TSR awards, the per unit or share fair value was estimated using the following assumptions: an expected life of three years, a dividend rate of 5.91%, a risk-free interest rate of 0.03% - 0.35% and an expected price volatility of 26.74% - 41.53%. For the ROC Awards, the fair value is based on the market value on the date of grant and the performance assumptions are re-evaluated quarterly. The Company does not recognize expense on ROC Awards which it does not expect to vest. During 2019, RSUs exchangeable in 2022 for 2,750 shares were forfeited.

As of September 30, 2021, based on performance and market assumptions, the fair value of the RSUs granted in 2021, 2020 and 2019 is $1,647,000, $962,000 and $1,446,000, respectively. Recognition of such deferred compensation will be charged to General and administrative expense over the respective three-year performance cycles. None of these RSUs were forfeited or vested during the three and nine months ended September 30, 2021.

NOTE 11 – STOCKHOLDERS’ EQUITY (CONTINUED)

The following is a summary of the activity of the equity incentive plans:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Restricted stock grants:
Number of shares		—		—		151,500		149,550
Average per share grant price	$	—	$	—	$	20.34	$	28.10
Deferred compensation to be recognized over vesting period	$	—	$	—	$	3,082,000	$	4,202,000

Number of non-vested shares:
Non-vested beginning of period		707,050		701,675		701,675		674,250
Grants		—		—		151,500		149,550
Vested during period		—		—		(145,725)		(122,125)
Forfeitures		(500)		—		(900)		—
Non-vested end of period		706,550		701,675		706,550		701,675

RSU grants:
Number of underlying shares		80,700		75,026		80,700		75,026
Average per share grant price	$	30.46	$	17.31	$	30.46	$	17.31
Deferred compensation to be recognized over vesting period	$	1,647,000	$	861,000	$	1,647,000	$	861,000

Number of non-vested shares:
Non-vested beginning of period		150,052		148,776		223,802		225,026
Grants		80,700		75,026		80,700		75,026
Vested during period		—		—		(73,750)		(24,343)
Forfeitures		—		—		—		(51,907)
Non-vested end of period		230,752		223,802		230,752		223,802

Restricted stock and RSU grants (based on grant price):
Weighted average per share value of non-vested shares	$	25.04	$	24.98	$	25.04	$	24.98
Value of stock vested during the period	$	—	$	—	$	5,165,000	$	3,589,000
Weighted average per share value of shares forfeited during the period	$	24.84	$	—	$	24.57	$	24.03

Total charge to operations:
Outstanding restricted stock grants	$	871,000	$	885,000	$	2,859,000	$	2,644,000
Outstanding RSUs		292,000		251,000		1,332,000		797,000
Total charge to operations	$	1,163,000	$	1,136,000	$	4,191,000	$	3,441,000

As of September 30, 2021, total compensation costs of $8,014,000 and $2,499,000 related to non-vested restricted stock awards and RSUs, respectively, have not yet been recognized. These compensation costs will be charged to General and administrative expense over the remaining respective vesting periods. The weighted average remaining vesting period is 2.3 years for the restricted stock and 1.8 years for the RSUs.

NOTE 11 – STOCKHOLDERS’ EQUITY (CONTINUED)

Shares Issued through the At-the-Market Equity Offering Program

During the three and nine months ended September 30, 2021, the Company sold 49,000 shares for proceeds of $1,489,000, net of commissions of $30,000, and incurred offering costs of $65,000 for professional fees. No shares were sold by the Company during the three and nine months ended September 30, 2020. Subsequent to September 30, 2021 and through November 1, 2021, the Company sold 23,000 shares for proceeds of $717,000, net of commissions of $15,000.

Dividend Reinvestment Plan

In June 2021, the Company reinstated the dividend reinvestment feature of its Dividend Reinvestment Plan (the “DRP”) which had been suspended since June 2020. The DRP, among other things, provides stockholders with the opportunity to reinvest all, or a portion of, their cash dividends paid on the Company’s common stock in additional shares of its common stock, at a discount of up to 5% from the market price (as such price is calculated pursuant to the DRP). The discount was determined in the Company’s sole discretion and was offered at a 5% discount from market prior to the suspension and is currently being offered at a 3% discount from market. Under the DRP, the Company issued 31,000 shares of common stock during the three and nine months ended September 30, 2021, and 77,000 shares of common stock during the nine months ended September 30, 2020.