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Note 14 - Share-based Compensation
 12 Months Ended
Dec. 31, 2022
Notes to Financial Statements  
Share-Based Payment Arrangement [Text Block]

14. SHARE-BASED COMPENSATION 

 

On May 7, 2014, our shareholders approved the 2014 Omnibus Incentive Plan and in May 2021 this plan was amended as our shareholders authorized an additional 600,000 shares (as amended, the "2014 Plan"). The 2014 Plan includes 1,100,000 of our common shares that may be granted under various types of awards as described in the 2014 Plan. As of December 31, 2022, we were authorized to issue 526,106 shares under the 2014 Plan.

 

On January 24, 2021, we adopted the 2021 Inducement Option Plan (the "2021 Plan") pursuant to which 25,000 non-qualified stock options were granted to seven key employees acquired with the Acquisition. The 2021 Plan did not require shareholder approval under Nasdaq Listing Rule 5635(c). As of December 31, 2022, there were no remaining shares available to grant under the 2021 Plan.

 

Stock Options   

 

The following table presents the weighted average assumptions used in the option-pricing model at the grant date for options granted during the years ended December 31:

 

  

2022

  

2021

 

Assumptions:

        

Risk-free interest rate

  0.82%  0.32%

Expected dividend yield

  2.15%  1.18%

Expected volatility of Rocky Brand's common stock

  54.70%  51.87%

Expected option term (years)

  5.1   5.6 

Weighted-average grant date fair value per share

 $12.85  $12.16 

 

For the years ended December 31, 2022 and 2021, we recognized share-based compensation expense and the corresponding tax benefit as follows:

 

($ in thousands)

 

2022

  

2021

 

Share-based compensation expense

 $1,230  $1,265 

Tax benefit

  221   192 

 

The following summarizes stock option activity for the year ended December 31, 2022:

 

          

Weighted

     
      

Weighted

  

Average

     
      

Average

  

Remaining

  

Aggregate

 

($ amounts are per share)

 

Shares

  

Exercise Price

  

Actual Term

  

Intrinsic Value

 

Options outstanding at January 1, 2022

  328,000  $26.94         

Issued

  85,500   39.80         

Exercised

  (26,050)  17.69         

Forfeited or expired

  (46,014)  41.71         

Options outstanding at December 31, 2022

  341,436  $28.87   5.1  $363,595 

Expected to vest

  118,736  $31.70   7.7  $34,364 

Exercisable at December 31, 2022

  222,700  $27.37   3.7  $329,231 

 

In the first quarter of 2022, our officers and certain employees were granted 54,000 options. The plans generally provided for grants with the exercise price equal to fair value on the date of grant, graduated vesting periods of up to 5 years, and lives not exceeding 10 years. For the years ended December 31, 2022, 2021, and 2020, cash received for the exercise of stock options was approximately $461,000, $825,000, and $136,000 respectively.

 

In the first quarter of 2022, Board of Director members were granted 31,500 stock options that vest over a year and will expire in 5 years.

 

Restricted Stock Units

 

The following table summarizes the status of the Company's restricted stock units and activity as of  December 31, 2022:

 

  

Restricted Stock Units

 
      

Weighted-Average Grant Date

 

($ amounts are per share)

 

Quantity

  

Fair Value Per Share

 

Nonvested at January 1, 2022

  -  $- 

Granted

  1,954   25.58 

Vested

  -   - 

Forfeited

  -   - 

Nonvested at December 31, 2022

  1,954  $25.58 

 

As of December 31, 2022, the total unrecognized compensation cost related to non-vested stock options and restricted stock units was approximately $148,000 with a weighted-average expense recognition period of 3.8 years.

 

During the years ended December 31, 2022 and 2021, and 2020 we issued 10,762 shares, 6,868 shares and 10,456 shares of common stock to members of our Board of Directors, respectively.