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STOCK OPTIONS, RESTRICTED STOCK, AND DEFERRED COMPENSATION

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

STOCK OPTIONS, RESTRICTED STOCK, AND DEFERRED COMPENSATION

Note 18—STOCK OPTIONS, RESTRICTED STOCK, AND DEFERRED COMPENSATION

The Company has adopted a stock option plan whereby shares have been reserved for issuance by the Company upon the grant of stock options or restricted stock awards. At December 31, 2021 and 2020, the Company had 71,768 and 94,910 shares, respectively, reserved for future grants. The 350,000 shares reserved were approved by shareholders at the 2011 annual meeting. The plan provides for the grant of options to key employees and directors as determined by a stock option committee made up of at least two members of the board of directors. Options are exercisable for a period of ten years from date of grant. There were no stock options outstanding and exercisable as of December 31, 2021, December 31, 2020 and December 31, 2019.

First Community Corporation 2011 Stock Incentive Plan

In 2011, the Company and its shareholders adopted a stock incentive plan whereby 350,000 shares were reserved for issuance by the Company upon the grant of stock options or restricted stock awards under the plan (the “2011 Plan”). The 2011 Plan provided for the grant of options to key employees and directors as determined by a stock option committee made up of at least two members of the board of directors. Options are exercisable for a period of ten years from the date of grant. There were no stock options outstanding and exercisable at December 31, 2021, December 31, 2020 and December 31, 2019. At December 31, 2020, the Company had 94,910 shares reserved for future grants under the 2011 Plan. The 2011 Plan expired on March 15, 2021 and no new awards may be granted under the 2011 Plan. However, any awards outstanding under the 2011 Plan will continue to be outstanding and governed by the provisions of the 2011 Plan.

Under the 2011 Plan, the employee restricted shares and units cliff vest over a three-year period and the non-employee director shares vest approximately one year after issuance. The unrecognized compensation cost at December 31, 2021 and December 31, 2020 for non-vested shares amounts to $293.9 thousand and $283.1 thousand , respectively. Each unit is convertible into one share of common stock at the time the unit vests. The related compensation cost for time-based units is accrued over the vesting period and was $79.0 thousand and $107.4 thousand at December 31, 2021 and December 31, 2020, respectively.

Historically, the Company granted time-based equity awards that vested based on continued service. Beginning in 2021 and in addition to time-based equity awards, the Company began granting performance-based equity awards in the form of performance-based restricted stock units, with the target number of performance-based restricted stock units for the Company’s Chief Executive Officer and other executive officers representing 50% of total target equity awards. These performance-based restricted stock units cliff vest over three years and include conditions based on the following performance measures: total shareholder return, return on average equity, and non-performing assets. The Company granted 13,302 performance-based restricted stock units with a fair value of $234.0 thousand during 2021. The Company granted no performance-based restricted stock units in 2020. The related compensation cost for the performance-based restricted stock units is accrued over the vesting period and was $65.0 thousand during the year ended December 31, 2021. The total related compensation cost for restricted stock units was $144.0 thousand and $107.4 thousand at December 31, 2021, and December 31, 2020, respectively, including both time-based and performance-based restricted stock units.

First Community Corporation 2021 Omnibus Equity Incentive Plan

In 2021, the Company and its shareholders adopted an omnibus equity incentive plan whereby 225,000 shares were reserved for issuance by the Company to help the company attract, retain and motivate directors, officers, employees, consultants and advisors of the Company and its subsidiaries (the “2021 Plan”). The 2021 Plan replaced the 2011 Plan. No awards have been granted under the 2021 Plan as of December 31, 2021.

Non-Employee Director Deferred Compensation Plan

Under the Company’s Non-Employee Director Deferred Compensation Plan, as amended and restated effective as of January 1, 2021, a director may elect to defer all or any part of annual retainer and monthly meeting fees payable with respect to service on the board of directors or a committee of the board. Units of common stock are credited to the director’s account as of the last day of such calendar quarter during which the compensation is earned and are included in dilutive securities in the table below. The non-employee director’s account balance is distributed by issuance of common stock within 30 days following such director’s separation from service from the board of directors. At December 31, 2021 and 2020, there were 85,765 and 88,412 units in the plan, respectively. The accrued liability related to the plan at December 31, 2021 and 2020 amounted to $1.1 million and $1.1 million, respectively, and is included in “Other liabilities” on the balance sheet.

The table below summarizes the common shares of restricted stock granted to each non-employee director in connection with their overall compensation plan in 2021, 2020 and 2019.


	Restricted shares granted
Year	Total		per Director		Value per share		Date shares vest
2021		7,959		796	$	17.59		1/1/22
2020		2,662		242	$	20.64		1/1/21
2019		2,976		248	$	20.18		1/1/20

In 2021, 2020 and 2019, 13,302, 17,175 and 8,418 restricted shares, respectively, were issued to executive officers in connection with the Bank’s incentive compensation plan. The related compensation expense was $329.3 thousand , $312.2 thousand , and $143.9 thousand for the years ended December 31, 2021, 2020, and 2019 respectively. The shares were valued at $17.59, $20.64 and $20.18 per share/unit, respectively. Restricted shares/units granted to executive officers under the incentive compensation plan cliff vest over a three-year period from the date of grant. The assumptions used in the calculation of these amounts for the awards granted in 2021, 2020 and 2019 are based on the price of the Company’s common stock on the grant date.

In 2014, 29,228 restricted shares were issued to senior officers of Savannah River and retained by the Company in connection with the merger. The shares were valued at $10.55 per share. Restricted shares granted to these officers vested in three equal annual installments beginning on January 31, 2015.

Warrants to purchase 37,130 shares at $5.90 per share were issued in connection with the issuing of subordinated debt on November 15, 2011 with an expiration date of December 16, 2019. All warrants were exercised by the expiration date. The related subordinated debt was paid off in November 2012.