XML 34 R20.htm IDEA: XBRL DOCUMENT

STOCKHOLDERS' EQUITY

12 Months Ended

Dec. 31, 2023

NOTE 11 — STOCKHOLDERS’ EQUITY

Common Stock Dividend

In each of 2023, 2022 and 2021, the Board of Directors declared an aggregate $1.80 per share in cash distributions.

On March 4, 2024, the Board of Directors declared a quarterly cash dividend of $0.45 per share on the Company’s common stock, totaling approximately $9,500,000. The quarterly dividend is payable on April 4, 2024 to stockholders of record on March 27, 2024.

Stock Repurchase Program

During 2022 and 2023, the Board of Directors authorized and/or amended repurchase programs pursuant to which the Company could repurchase shares of its common stock in open-market, through privately negotiated transactions or otherwise. During 2023 and 2022, the Company repurchased approximately 499,000 and 208,000 shares of common stock, for total consideration of $9,638,000 and $5,214,000, net of commissions of $30,000 and $12,000, respectively. As of December 31, 2023, the Company is authorized to repurchase approximately $8,082,000 of shares of common stock.

No shares were repurchased by the Company during 2021.

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

The Company did not sell any shares during 2023.

During 2022, the Company sold approximately 17,000 shares for proceeds of $604,000, net of commissions of $12,000, and incurred offering costs of $41,000 for professional fees. During 2021, the Company sold 106,290 shares for proceeds of $3,379,000, net of commissions of $69,000, and incurred offering costs of $65,000 for professional fees.

Dividend Reinvestment Plan

The Company’s Dividend Reinvestment Plan (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, determined in the Company’s sole discretion, of up to 5% from the market price (as such price is calculated pursuant to the DRP). The discount is currently being offered at 3%. Under the DRP, the Company issued approximately 233,000, 102,000 and 35,000 shares of common stock during 2023, 2022 and 2021, respectively.

Stock Based Compensation

The Company’s 2022, 2019 and 2016 Incentive Plans (collectively, the “Plans”) permit 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 was authorized for issuance pursuant to each plan at such plan’s inception.

NOTE 11 — STOCKHOLDERS’ EQUITY (CONTINUED)

The following details the shares subject to awards that are outstanding under the Plans as of December 31, 2023:


	2022	2019	2016
	Incentive Plan (a)	Incentive Plan (b)	Incentive Plan (b)
Restricted stock	149,335	426,625	136,600
RSUs	168,490	79,622	—
Totals	317,825	506,247	136,600

(a)	On January 12, 2024, 151,180 restricted shares were issued pursuant to this plan, having an aggregate value of approximately $3,265,000 and are scheduled to vest in January 2029.

(b)	No additional awards may be granted under such plans.

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.

The following table reflects the activities involving RSUs that were outstanding during the year ended December 31, 2023:


	2023	2022		2021		2020		2019
RSUs granted (a)	85,250	85,350		80,700		75,026		77,776
RSUs vested	—	—		—		74,988	(b)	64,488	(c)
RSUs forfeited	—	2,110	(d)	1,078	(d)	38	(d)	13,288	(e)
RSUs outstanding	85,250	83,240		79,622		—		—
Vesting Date (f) (g)	6/30/2026	6/30/2025		6/30/2024		6/30/2023		6/30/2022

(a)	The shares underlying the RSUs are excluded from the shares shown as outstanding on the balance sheet until they have vested and been issued.

(b)	Such shares were issued in August 2023.

(c)	Such shares were issued in August 2022.

(d)	Such shares were forfeited due to the retirement of a recipient before the completion of the applicable three-year performance cycle.

(e)	Of the shares forfeited from the 2019 grant, 10,538 shares were not earned in 2022 because the applicable market condition was only partially satisfied and the remaining 2,750 shares were forfeited in 2019.

(f)	Generally, the recipient must maintain a relationship with the Company during the applicable three-year performance cycle.

(g)

RSUs vest upon satisfaction of metrics related to average annual total stockholder return (“TSR Metric”) and average annual return on capital (“ROC Metric”; together with the TSR Metric, the “Metrics”) and are issued to the extent the Compensation Committee determines that the Metrics with respect to the vesting of such shares have been satisfied.

NOTE 11 — STOCKHOLDERS’ EQUITY (CONTINUED)

The specific metrics and other material terms and conditions of the RSUs are as follows:


			Performance Criteria (a)
Year RSU Granted	Metric	Weight	Minimum	Maximum
2019 - 2020 (b)	ROC Metric (c)	50%	Average annual of at least 7.0%	Average annual of at least 9.75%
	TSR Metric (d)	50%	Average annual of at least 7.0%	Average annual of at least 12.0%
2021 - 2023 (e) (f)	ROC Metric (c)	50%	Average annual of at least 6.0%	Average annual of at least 8.75%
	TSR Metric (d)	50%	Average annual of at least 6.0%	Average annual of at least 11.0%

(a) If the average annual ROC or TSR falls between the applicable minimum and maximum performance criteria, a pro-rata portion of such units, as applicable, vest.

(b) Such RSUs were not entitled to voting or dividend rights.

(c) The ROC Metrics meet the definition of a performance condition. Fair value is based on the market value on the date of grant. For ROC Awards, the Company does not recognize expense when performance conditions are not expected to be met; such performance assumptions are re-evaluated quarterly.

(d) The TSR Metrics meet the definition of a market condition. A third-party appraiser prepares a Monte Carlo simulation pricing model to determine the fair value of such awards, which is recognized ratably over the three-year service period. For these TSR awards, the per unit or share fair value was estimated using the following assumptions:


TSR Award Year	Expected Life (yrs)	Dividend Rate	Risk-Free Interest Rate	Expected Price Volatility (1)
2023	3	8.72%	4.42% - 5.28%	28.69% - 30.05%
2022	3	7.10%	1.58% - 3.33%	29.37% - 39.87%
2021	3	5.91%	0.03% - 0.35%	26.74% - 41.53%

(1)

Calculated based on the historical and implied volatility.

(e) Such RSUs are (i) not entitled to voting rights and (ii) upon vesting, the holders 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.

(f) As of December 31, 2023 and 2022, the Company accrued an aggregate of $450,000 and $210,000 of dividend equivalents, respectively, for the 2023, 2022 and 2021 RSUs based on the number of shares that would have been issued, underlying such RSUs, using performance and market assumptions determined as of such dates.

As of December 31, 2023, based on performance and market assumptions, the fair value of the RSUs granted in 2023, 2022 and 2021 is $958,000, $1,371,000 and $1,822,000, respectively. Recognition of such deferred compensation will be charged to General and administrative expense over the respective three-year performance cycle.

NOTE 11 — STOCKHOLDERS’ EQUITY (CONTINUED)

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


	Year Ended December 31,
	2023		2022		2021
Restricted stock grants:
Number of shares		152,955		153,575		151,500
Average per share grant price	$	22.09	$	33.75	$	20.34
Deferred compensation to be recognized over vesting period	$	3,379,000	$	5,183,000	$	3,082,000

Number of non-vested shares:
Non-vested beginning of the year		712,375		706,450		701,675
Grants		152,955		153,575		151,500
Vested during the year		(152,300)		(146,900)		(145,725)
Forfeitures		(470)		(750)		(1,000)
Non-vested end of the year		712,560		712,375		706,450

RSU grants:
Number of underlying shares		85,250		85,350		80,700
Average per share grant price	$	20.32	$	26.44	$	30.46
Deferred compensation to be recognized over vesting period	$	958,000	$	1,420,000	$	1,808,000

Number of non-vested shares:
Non-vested beginning of the year		241,076		230,752		223,802
Grants		85,250		85,350		80,700
Vested during the year		(74,988)		(64,488)		(73,750)
Forfeitures		(3,226)		(10,538)		—
Non-vested end of the year		248,112		241,076		230,752

Restricted stock and RSU grants (based on grant price):
Weighted average per share value of non-vested shares	$	25.90	$	26.26	$	25.04
Value of stock vested during the year	$	5,165,000	$	5,535,000	$	5,165,000
Weighted average per share value of shares forfeited during the year	$	27.52	$	29.12	$	24.62

Total charge to operations:
Outstanding restricted stock grants	$	3,979,000	$	4,057,000	$	3,734,000
Outstanding RSUs		1,388,000		1,450,000		1,699,000
Total charge to operations	$	5,367,000	$	5,507,000	$	5,433,000

As of December 31, 2023, total compensation costs of $7,627,000 and $1,797,000 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 vesting period is 2.1 years for the restricted stock and 1.5 years for the RSUs.