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Stock Compensation Plans
 12 Months Ended
Dec. 31, 2021
Share-based Payment Arrangement [Abstract]  
Stock Compensation Plans

13) Stock Compensation Plans

 

The Company has two fixed option plans (the “2013 Plan” and the “2014 Director Plan”). Compensation expense for options issued of $118,384 and $358,878 has been recognized under these plans for the years ended December 31, 2021 and 2020, respectively, and is included in personnel expenses on the consolidated statements of earnings. As of December 31, 2021, the total unrecognized compensation expense related to the options issued was $875,735, which is expected to be recognized over the vesting period of one year.

 

The fair value of each option granted is estimated on the date of grant using the Black Scholes Option Pricing Model. The Company estimates the expected life of the options using the simplified method. Future volatility is estimated based upon the weighted historical volatility of the Company’s Class A common stock over a period equal to the expected life of the options. The risk-free interest rate for the expected life of the options is based upon the Federal Reserve Board’s daily interest rates in effect at the time of the grant.

 

The following table summarizes the assumptions used in estimating the fair value of each option granted along with the weighted-average fair value of the options granted.

 

          Assumptions 
Grant Date  Plan  Weighted-Average Fair Value of Each Option   Expected Dividend Yield (1)   Underlying stock FMV   Weighted-Average Volatility   Weighted-Average Risk-Free Interest Rate   Weighted-Average Expected Life (years) 
December 3, 2021  All Plans  $2.99    5%  $8.62    36.50%   1.15%   5.31 
                                  
March 27, 2020  All Plans  $0.65    5%  $3.76    32.29%   1.64%   4.82 

 

 
(1) Stock dividend

 

 

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, 2021 and 2020

 

13) Stock Compensation Plans (Continued)

 

Activity of the stock option plans is summarized as follows:

 

   Number of
Class A Shares		   Weighted Average Exercise Price   Number of
Class C Shares		   Weighted Average Exercise Price 
Outstanding at January 1, 2020   1,086,053   $4.20    594,132   $5.10 
Adjustment for the effect of stock dividends   27,968         19,354      
Granted   77,000         180,000      
Exercised   (116,487)        (130,820)     
Cancelled   (1,671)        -      
                     
Outstanding at December 31, 2020   1,072,863   $4.12    662,666   $4.50 
Adjustment for the effect of stock dividends   47,594         33,136      
Granted   89,500         230,000      
Exercised   (183,935)        (104,656)     
Cancelled   (1,671)        -      
                     
Outstanding at December 31, 2021   1,024,351   $4.61    821,146   $5.48 
                     
Exercisable at end of year   934,851   $4.23    591,146   $4.26 
                     
Available options for future grant   232,376         16,689      
                     
Weighted average contractual term of options outstanding at December 31, 2021   4.54 years         7.24 years      
                     
Weighted average contractual term of options exercisable at December 31, 2021   4.03 years         6.62 years      
                     
Aggregated intrinsic value of options outstanding at December 31, 2021 (1)  $4,700,708        $3,009,168      
                    
Aggregated intrinsic value of options exercisable at December 31, 2021 (1)  $4,648,798        $2,918,768      

 

 
(1) The Company used a stock price of $9.20 as of December 31, 2021 to derive intrinsic value.

 

The total intrinsic value (which is the amount by which the fair value of the underlying stock exceeds the exercise price of an option on the exercise date) of stock options exercised during the years ended December 31, 2021 and 2020 was $1,153,417 and $663,901, respectively.

 

 

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, 2021 and 2020