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Stock Options and awards | 12 Months Ended
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Dec. 31, 2022
Stock Options and awards |
7. Stock Options and awards | 7. Stock Options and awards Stock Awards As of December 31, 2022, the Company has one incentive stock award plan, The Eastern Company 2020 Stock Incentive Plan (the “2020 Plan”), for officers, other key employees, and non-employee Directors. Incentive stock awards granted under the 2020 Plan must have exercise prices that are not less than 100% of the fair market value of the Company’s common stock on the dates the stock awards are granted. Restricted stock awards may also be granted to participants under the 2020 Plan with restrictions determined by the Compensation Committee of the Company’s Board of Directors. Under the 2020 Plan, non-qualified stock awards granted to participants will have exercise prices determined by the Compensation Committee of the Company’s Board of Directors. The Company granted 43,300 and 27,300 awards during 2022 and 2021, respectively. The 2020 Plan also permits the issuance of Stock Appreciation Rights (“SARs”). The SARs are in the form of an award with a cashless exercise price equal to the difference between the fair value of the Company’s common stock at the date of grant and the fair value as of the exercise date resulting in the issuance of the Company’s common stock. The Company did not issue SARs in 2022 or 2021. Stock-based compensation expense in connection with stock awards and SARs was $504,694 for awards granted to employees during fiscal year 2022 and $418,000 for awards granted to employees during fiscal year 2021. For the 2022 fiscal year, the Company used several assumptions which included an expected term of 3 years, volatility deviation of 47.15% to 47.70% and a risk-free rate of 2.04% to 2.66%. For the 2021 fiscal year, the Company used several assumptions which included an expected term of 4 years, volatility deviation of 47.25% to 48.55% and a risk-free rate of 0.18 to 0.35%. As of December 31, 2022, there were 808,101 shares of common stock reserved and available for future grant under 2020 Plan. The following tables set forth the outstanding SARs for the period specified:
|  | Year Ended December 31, 2022 |  |  | Year Ended January 1, 2022 |
|  | Units |  |  | Weighted - Average Exercise Price |  |  | Units |  |  | Weighted - Average Exercise Price |
Outstanding at beginning of period |  |  | 180,833 |  |  | $ | 22.88 |  |  |  | 244,001 |  |  | $ | 21.87 |
Issued |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Exercised |  |  | (16,667 | ) |  |  | 21.20 |  |  |  | (55,668 | ) |  |  | 19.31 |
Forfeited |  |  | (18,000 | ) |  |  | 21.74 |  |  |  | (7,500 | ) |  |  | 21.20 |
Outstanding at end of period |  |  | 146,166 |  |  |  | 23.22 |  |  |  | 180,833 |  |  |  | 22.88 |
SARs Outstanding and Exercisable
Range of Exercise Prices |  | Outstanding as of December 31, 2022 |  |  | Weighted- Average Remaining Contractual Life |  |  | Weighted- Average Exercise Price |  |  | Exercisable as of December 31, 2022 |  |  | Weighted- Average Remaining Contractual Life |  |  | Weighted- Average Exercise Price |
$20.20-$26.30 |  |  | 146,166 |  |  |  | 1.1 |  |  | $ | 23.22 |  |  |  | 115,166 |  |  |  | 0.6 |  |  | $ | 23.50 |
The following tables set forth the outstanding stock grants for the period specified:
|  | Year Ended December 31, 2022 |  |  | Year Ended January 1, 2022 |
|  | Shares |  |  | Shares |
Outstanding at beginning of period |  |  | 27,300 |  |  |  | 25,000 |
Issued |  |  | 43,300 |  |  |  | 27,300 |
Forfeited |  |  | (6,100 | ) |  |  | (25,000 | )
Outstanding at end of period |  |  | 64,500 |  |  |  | 27,300 |
As of December 31, 2022, outstanding SARs and awards had an intrinsic value of $1,243,560.

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