Stock-Based and Other Long-Term Incentive Compensation

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

Stock-Based and Other Long-Term Incentive Compensation

Restricted Stock

On June 20, 2019, at our annual meeting of shareholders, our shareholders approved an Equity Incentive Plan for restricted shares/units, stock options and other equity awards. The Equity Incentive Plan allows issuance up to 500,000 share of common stock. As of December 31, 2021, we had 276,319 shares outstanding under the Equity Incentive Plan that will vest over the next three years. As of December 31, 2021, 47,135 shares were still available for issuance under the Equity Incentive Plan.

On March 18, 2021, the Compensation Committee awarded 129,212 shares of restricted common stock to two executive officers that vest ratably over three years, beginning on March 18, 2022. On June 17, 2021, the Compensation Committee awarded 5,000 shares of restricted common stock to an executive officer that vest ratably over three years beginning on June 17, 2022. In addition, on March 18, 2021, 5,612 shares of restricted common stock were awarded to each of our three independent Board members. Lastly, on April 1, 2021, 5,291 shares of restricted common stock were awarded to a newly appointed independent Board member. The restricted stock issued to our directors vests in one year from the date of grant.

Compensation expense related to the restricted shares was approximately $1.7 million and $2.2 million for the years ended December 31, 2021 and 2020, respectively. As of December 31, 2021, there was a total of approximately $1.4 million of unrecognized compensation expense related to the unvested portion of these restricted shares/units. This expense is expected to be recognized over the next three years.

A summary of all restricted stock activity as of December 31, 2020 and 2021 and changes during the years then ended are presented below.


	Number of Shares	Grant Date Fair Value		Weighted Average Remaining Contractual Life (years)	Aggregate Intrinsic Value (in thousands)
Outstanding, December 31, 2019	279,766	$	20.15	8.77	$	3,430
Granted	123,185	$	5.68	—	$	700
Vested	(144,850)	$	20.82	—	$	946
Canceled/Forfeited	—	—		—	—
Outstanding, December 31, 2020	258,101	$	12.87	8.61	$	2,447
Granted	156,339	$	8.99	—	$	1,406
Vested	(134,788)	$	14.94	—	$	1,258
Canceled/Forfeited	(3333)	$	12.26	—	$	31
Outstanding, December 31, 2021	276,319	$	9.67	1.77	$	2,893

Other Long-Term Incentive Compensation

On April 28, 2020, the Compensation Committee issued a long-term incentive award of $1.1 million to an executive officer that vests in equal, annual tranches over three years. At the time of vesting, each tranche will be payable in cash or common stock at the discretion of the Compensation Committee. On March 18, 2020, the Compensation Committee issued a long-term incentive award of $1.0 million to an executive officer that vests in equal, annual tranches over three years. In

addition, on April 28, 2020, we issued a $50,000 award to each of our four independent members of our Board of Directors as partial payment for their services in 2020. These awards vest one year from the date of grant and are payable in cash upon vesting. On March 18, 2021, we issued a $50,000 award to each of our three independent Board members. On April 1, 2021, we issued a $50,000 award to a newly appointed independent Board member. These awards vest one year from the date of grant and are payable in cash upon vesting. The Company accounts for these other long-term incentive awards as liabilities under accrued liabilities on our condensed consolidated balance sheet. The vesting of these awards is subject to acceleration upon certain events, such as (i) death or disability of the recipient, (ii) certain circumstances in connection with a change of control of the Company, (iii) for executive officers, termination without cause (as defined in the agreement), and (iv) for executive officers, resignation for good reason (as defined). Total compensation expense related to these other long-term incentive awards was approximately $0.8 million for the year ended December 31, 2021. As of December 31, 2021 there was a total of $1.2 million of unrecognized compensation expense related to these other long-term incentive awards which is expected to be recognized over the next three years.

Stock Option Plan

Our Stock Option Plan, which is stockholder approved, permits the granting of stock options to its employees for up to 1.0 million shares of common stock. We believe that such awards align the interests of our employees with our stockholders. Option awards are generally granted with an exercise price equal to the market price of our stock at the date of grant; those option awards generally vest in equal increments over three years of continuous service and have ten-year contractual terms. Certain option and share awards provide for accelerated vesting if there is a change in control of the Company (as defined in the Stock Option Plan). The last date that grants can be made under the Stock Option Plan is February 28, 2026. As of December 31, 2021, 345,003 shares were still available to be granted under the Stock Option Plan.

The fair value of each option award is estimated on the date of grant using the Black-Scholes option valuation model that uses the assumptions noted in the following table. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The expected life of options granted is based on the vesting period and historical exercise and post-vesting employment termination behavior for similar grants. We use historical data to estimate option exercise and employee termination within the valuation model; separate groups of employees that have similar historical exercise behavior are considered separately for valuation purposes.


Weighted average Black -Scholes fair value assumption during the year ended December 31, are as follows:	2021
Risk free rate		1.45	%
Expected life		6.86
Expected volatility		46.8	%
Expected dividend yield		—	%

During the year ended December 31, 2021, 55,500 stock option grants were made.

A summary of all option activity as of December 31, 2020 and 2021 and changes during the years then ended are presented below:


	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (years)	Aggregate Intrinsic Value
					(in thousands)
Outstanding, December 31, 2019	208,334	$	23.67	3.66	$	—
Granted	5,000	$	4.91	—	—
Exercised	—	—		—	—
Canceled/Forfeited	(12,000)	$	20.20	—	$	24
Expired	(40,000)	$	19.11	—	—
Outstanding, December 31, 2020	161,334	$	24.48	3.48	—
Granted	55,500	$	10.58	—	—
Exercised	—	—		—	—
Canceled/Forfeited	—	—		—	—
Expired	(16,000)	$	17.81	—	—
Outstanding, December 31, 2021	200,834	$	21.17	4.83	$	—
Exercisable, December 31, 2021	145,334	$	25.21	2.86	$	—

The weighted average grant date fair value of options granted during 2021 was $5.15 per option. We had no grants in 2020. There were no option exercises in either 2021 or 2020.

The following table summarizes information about our stock options outstanding at December 31, 2021:


Range of Exercise Prices	Options Outstanding				Options Exercisable
	Shares	Weighted Average Remaining Contractual Life (years)	Weighted Average Exercise Price		Shares	Weighted Average Exercise Price

$0.01-$18.00	64,000	8.68	$	11.15	8,500	$	14.89
$18.01-$22.00	20,500	1.22	18.75		20,500	$	18.75
$22.01-$26.00	42,167	3.28	22.90		42,167	$	22.90
$26.01-$30.00	30,000	5.13	28.15		30,000	$	28.15
$30.01-$34.00	44,167	2.22	30.41		44,167	$	30.41
	200,834	4.83	$	21.17	145,334	$	25.21

The summary of the status of our unvested stock options as of December 31, 2021 and changes during the year then ended is presented below.


Unvested stock options:	Shares	Weighted Average Grant Date Fair Value
Unvested at December 31, 2020	—	$	—
Granted	55,500	$	10.58
Vested	—	—
Canceled/Forfeited	—	—
Unvested at December 31, 2021	55,500	$	10.58

We recognized stock compensation expense from stock options vesting of $728 and $19,366 for the years ended

December 31, 2021 and 2020, respectively. As of December 31, 2021, there was $247,000 of unamortized compensation cost related to unvested stock options.