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STOCKHOLDERS' EQUITY

12 Months Ended

Dec. 31, 2024

NOTE 11 — STOCKHOLDERS’ EQUITY

Stock Based Compensation

The Company’s 2022 and 2019 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.

The following details the shares subject to awards that are outstanding under the Plans as of December 31, 2024:


	Restricted
	Stock		RSUs	Totals
2022 Incentive Plan	300,515	(a)	256,740	557,255
2019 Incentive Plan (b)	426,625		—	426,625
Totals	727,140		256,740	983,880

(a)	On January 14, 2025, 154,390 restricted shares were issued pursuant to this plan with an aggregate grant date fair value of $3,940,000; such awards are scheduled to vest in January 2030.

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

Restricted Stock

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.

RSUs

The following table reflects the activities involving RSUs:


	2024 Grant	2023 Grant	2022 Grant		2021 Grant		2020 Grant
RSUs granted (a)	88,250	85,250	85,350		80,700		75,026
RSUs vested	—	—	—		39,811	(b)	74,988	(c)
RSUs forfeited	—	—	2,110	(d)	40,889	(e)	38	(d)
RSUs outstanding	88,250	85,250	83,240		—		—
Vesting date (f)(g)	6/30/2027	6/30/2026	6/30/2025		6/30/2024		6/30/2023

(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 2024.

(c)	Such shares were issued in August 2023.

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

(e)	Of the 40,889 shares (i) 39,811 shares were not earned because the applicable market condition had not been satisfied and (ii) 1,078 shares were forfeited due to the retirement of an executive officer before the completion of the applicable three-year performance cycle.

(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 Metrics and other material terms and conditions of the RSUs are as follows:


			Performance Criteria (a)
Year RSU Granted	Metric	Weight	Minimum	Maximum
2021 - 2024 (b)(c)(d)	ROC Metric (e)	50%	Average annual of at least 6.0%	Average annual of at least 8.75%
	TSR Metric (f)	50%	Average annual of at least 6.0%	Average annual of at least 11.0%

(a)	If the Metrics fall between the applicable minimum and maximum performance criteria, a pro-rata portion of such units, as applicable, vest.

(b)	The RSUs are not entitled to voting rights.

(c)

Upon vesting, the holders of such RSUs 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. As of December 31, 2024 and 2023, the Company accrued an aggregate of $408,000 and $450,000 of dividend equivalents, respectively, for the unvested RSUs based on the number of shares, underlying such RSUs, that would have been issued using performance and market assumptions determined at such dates.

(d)	In August 2024, the Company paid the holders of the 2021 RSU grants an aggregate of $215,000 with respect to the dividend equivalent rights on the vested 39,811 shares.

(e)	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.

(f)

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)
2024	3	7.03%	4.26% - 5.17%	22.79% - 24.80%
2023	3	8.72%	4.42% - 5.28%	28.69% - 30.05%
2022	3	7.10%	1.58% - 3.33%	29.37% - 39.87%

(1)

Calculated based on the historical and implied volatility.

As of December 31, 2024, based on performance and market assumptions, the fair value of the RSUs granted in 2024, 2023 and 2022 is $1,210,000, $927,000 and $1,419,000, 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,
	2024		2023		2022
Restricted stock:
Number of shares granted		151,180		152,955		153,575
Average per share grant price	$	21.60	$	22.09	$	33.75
Deferred compensation to be recognized over vesting period	$	3,265,000	$	3,379,000	$	5,183,000

Number of non-vested shares:
Non-vested beginning of the year		712,560		712,375		706,450
Grants		151,180		152,955		153,575
Vested during the year		(136,600)		(152,300)		(146,900)
Forfeitures		—		(470)		(750)
Non-vested end of the year		727,140		712,560		712,375

RSUs:
Number of underlying shares granted		88,250		85,250		85,350
Average per share grant price	$	25.60	$	20.32	$	26.44
Deferred compensation to be recognized over vesting period	$	1,210,000	$	958,000	$	1,420,000

Number of non-vested shares:
Non-vested beginning of the year		248,112		241,076		230,752
Grants		88,250		85,250		85,350
Vested during the year		(39,811)		(74,988)		(64,488)
Forfeitures		(39,811)		(3,226)		(10,538)
Non-vested end of the year		256,740		248,112		241,076

Restricted stock and RSU grants (based on grant price):
Weighted average per share value of non-vested shares	$	24.88	$	25.90	$	26.26
Value of stock vested during the year	$	4,723,000	$	5,165,000	$	5,535,000
Weighted average per share value of shares forfeited during the year	$	30.46	$	27.52	$	29.12

Total charge to operations:
Outstanding restricted stock grants	$	3,662,000	$	3,979,000	$	4,057,000
Outstanding RSUs		1,300,000		1,388,000		1,450,000
Total charge to operations	$	4,962,000	$	5,367,000	$	5,507,000

As of December 31, 2024, total compensation costs of $7,231,000 and $1,724,000 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.

NOTE 11 — STOCKHOLDERS’ EQUITY (CONTINUED)

Common Stock Dividend

In each of 2024, 2023 and 2022, the Board of Directors declared an aggregate $1.80 per share in cash distributions.

On March 5, 2025, the Board of Directors declared a quarterly cash dividend of $0.45 per share on the Company’s common stock, totaling approximately $9,700,000. The quarterly dividend is payable on April 4, 2025 to stockholders of record on March 27, 2025.

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%.

During 2024, 2023 and 2022, the Company issued approximately 161,000, 233,000 and 102,000 shares of common stock, respectively, under the DRP.

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

During 2024, the Company sold approximately 38,000 shares for proceeds of $1,095,000, net of commissions of $22,000, and incurred offering costs of $54,000 for professional fees.

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.

Stock Repurchase Program

In 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.

No shares were repurchased by the Company during 2024.

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, 2024, the Company is authorized to repurchase approximately $8,082,000 of shares of common stock.