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Note 8 - Options | 12 Months Ended
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Dec. 31, 2022
Notes |
Note 8 - Options | Note 8 – Options The Company has stock option plans which authorize the grant of stock options to eligible employees, directors and other individuals to purchase up to an aggregate of 509 thousand shares of common stock, of which 67 thousand are outstanding as of December 31, 2022. All options granted under the plans are granted at current market value at the date of grant, and may be exercised between six months and ten years following the date of grant. The plans are intended to advance the interest of the Company by attracting and ensuring retention of competent directors, employees and executive personnel, and to provide incentives to those individuals to devote their utmost efforts to the advancement of stockholder value. Changes in stock options were as follows:
|  | Shares (000’s) |  |  | Price Range Per Share
2022 |  |  |  |  |
Granted |  | 21 |  | $ | 82.60 - 82.60
Expired or canceled |  | 2 |  |  | 33.30 - 77.05
Exercised |  | 4 |  |  | 33.30 - 77.05
Total outstanding at December 31 |  | 67 |  |  | 33.30 - 77.05
Total exercisable at December 31 |  | 40 |  |  | 33.30 - 77.05
|  | Shares (000’s) |  |  | Price Range Per Share
2021 |  |  |  |  |
Granted |  | - |  | $ | - - -
Expired or canceled |  | 3 |  |  | 74.64 - 77.05
Exercised |  | 14 |  |  | 26.52 - 77.05
Total outstanding at December 31 |  | 52 |  |  | 33.30 - 77.05
Total exercisable at December 31 |  | 34 |  |  | 33.30 - 77.05
|  | Shares (000’s) |  |  | Price Range Per Share
2020 |  |  |  |  |
Granted |  | 26 |  | $ | 77.05 - 77.05
Expired or canceled |  | 1 |  |  | 58.50 - 77.05
Exercised |  | 8 |  |  | 26.52 - 74.64
Total outstanding at December 31 |  | 69 |  |  | 26.52 - 77.05
Total exercisable at December 31 |  | 33 |  |  | 26.52 - 74.64
For the years ended December 31, 2022, 2021 and 2020, the Company reduced current income taxes payable by $6, $39 and $7, respectively, for the income tax benefit attributable to sale by optionees of common stock received upon the exercise of stock options. Stock-Based Compensation In 2022, the Company recognized $183 in equity compensation cost, compared to $166 in 2021 and $160 in 2020. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions:
|  | Years ended December 31,
|  | 2022 |  |  | 2021 |  |  | 2020
Expected dividend amount per quarter | $ | 0.3050 |  | $ | - |  | $ | 0.2943
Expected stock price volatility |  | 29.87% |  |  | - |  |  | 27.5%
Risk-free interest rate |  | 4.09% |  |  | - |  |  | 0.56%
Expected life of options |  | 5.7 years |  |  | - |  |  | 5.3 years
The per share weighted average fair value of options granted during 2022 is $25.34 and in 2020 is $16.17. No options were granted in 2021. All UTMD options vest over a four-year service period. At December 31, 2022 there was $501 total unrecognized compensation expense related to non-vested stock options under the plans. A $199 portion of the cost is expected to be recognized over the next twelve months, and the remaining $302 recognized over the next 4 years. Expected dividend amounts were estimated based on the actual cash dividend rate at the time the options were granted and an estimate of future dividends based on past dividend rate changes as well as management’s expectations of future dividend rates over the expected holding period of the options. Expected volatility is based on UTMD’s historical volatility over recent periods of time and trends in that volatility, giving weight to more recent periods. Risk free interest rates were estimated based on actual U.S. Treasury Securities Interest rates as reported by the Federal Reserve Bank for periods of time equivalent to the holding periods estimated for the options on the dates the options were granted. Expected term of options were estimated based on historical holding periods for similar options previously granted by UTMD to employees and directors. The following table summarizes information about stock options outstanding at December 31, 2022:
|  |  |  | Options Outstanding |  |  | Options Exercisable
| Range of Exercise Prices |  |  | Actual Number Outstanding |  | Weighted Average Remaining Contractual Life (Years) |  |  | Weighted Average Exercise Price |  |  | Number Exercisable |  |  | Weighted Average Exercise Price
$ | 49.18 | - | 58.50 |  |  | 13,762 |  | 2.68 |  | $ | 54.12 |  |  | 13,762 |  | $ | 54.12
| 74.64 | - | 77.05 |  |  | 33,071 |  | 6.79 |  |  | 76.22 |  |  | 25,987 |  |  | 75.99
| 82.60 | - | 82.60 |  |  | 20,600 |  | 9.78 |  |  | 82.60 |  |  | 0 |  |  | 0.00
$ | 49.18 | - | 82.60 |  |  | 67,433 |  | 6.86 |  | $ | 73.66 |  |  | 39,749 |  | $ | 68.42
|  | 2022 |  |  | 2021 |  |  | 2020
Intrinsic Value of Stock Options Exercised | $ | 141 |  | $ | 591 |  | $ | 371
Intrinsic Value of Stock Options Outstanding | $ | 1,812 |  | $ | 1,595 |  | $ | 1,178

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