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Stock Options and Awards
 3 Months Ended
Mar. 29, 2025
Stock Options and Awards  
Stock Options and Awards

Note I - Stock Options and Awards

 

On February 19, 2020, the Board of Directors of the Company (the “Board”) adopted The Eastern Company 2020 Stock Incentive Plan (the “2020 Plan”). On April 29, 2020, at the Company’s 2020 Annual Meeting of Shareholders, the shareholders of the Company approved and adopted the 2020 Plan. The Company has no other existing plan pursuant to which equity awards may be granted.

 

Restricted stock unit awards may be granted to participants under the 2020 Plan with restrictions determined by the Compensation Committee of the Board. During the first three months of 2025 and 2024, the Company granted stock awards with respect to 35,856 and 0 shares of Company common stock, respectively, that were subject to the meeting of performance measurements or time-based.  For the first three months of 2025, the Company used fair market value to determine the associated expense with stock awards.

 

Incentive stock options 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 options are granted. Under the 2020 Plan, non-qualified stock options granted to participants will have exercise prices determined by the Compensation Committee of the Board. The Company issued 48,240 and 0 options during the first three months of 2025 and 2024, respectively.  For the first three months of 2025, the Company used several assumptions which included an expected term of 3 years, volatility deviation of 40.34% and a risk-free rate of 4.34% to determine the expense associated with options.

 

Stock-based compensation (income) expense, including forfeitures, in connection with options and stock awards previously granted to employees was approximately $(153,000) and $434,000 in the first quarter of 2025 and the first quarter of 2024, respectively.

 

As of March 29, 2025, there were 873,631 shares of Company common stock reserved and available for future grant under the 2020 Plan.

 

The following tables set forth the outstanding options for the period specified:

 

 

 

Three Months Ended

 

 

Year Ended

 

 

 

March 29, 2025

 

 

December 28, 2024

 

 

 

Units

 

 

Weighted Average Exercise Price

 

 

Units

 

 

Weighted Average

Exercise Price

 

Outstanding at beginning of period

 

 

25,116

 

 

$28.18

 

 

 

13,000

 

 

$24.19

 

Issued

 

 

48,240

 

 

 

27.88

 

 

 

53,568

 

 

 

28.69

 

Expired

 

 

-

 

 

 

-

 

 

 

(9,000)

 

 

26.30

 

Exercised

 

 

-

 

 

 

-

 

 

 

(2,500)

 

 

20.20

 

Forfeited

 

 

(8,600)

 

 

28.69

 

 

 

(29,952)

 

 

28.69

 

Outstanding at end of period

 

 

64,756

 

 

 

27.89

 

 

 

25,116

 

 

 

28.18

 

Stock Options Outstanding and Exercisable

 

 

 

 

 

 

 

 

 

 

 

Range of Exercise Prices

 

Outstanding as of March 29, 2025

 

 

Weighted Average Remaining Contractual Life

 

 

Weighted Average Exercise Price

 

 

Exercisable as of March 29, 2025

 

 

Weighted Average Remaining Contractual Life

 

 

Weighted Average Exercise Price

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$20.20 - $28.69

 

 

64,756

 

 

 

4.6

 

 

$27.89

 

 

 

1,500

 

 

 

0.1

 

 

$20.20

 

 

The following tables set forth the outstanding stock awards for the period specified:

 

 

 

Three Months Ended

 

 

Year Ended

 

 

 

March 29,

2025

 

 

December 28,

2024

 

 

 

Shares

 

 

Shares

 

Outstanding at beginning of period

 

 

39,592

 

 

 

89,400

 

Issued

 

 

35,856

 

 

 

38,448

 

Exercised

 

 

(4,579)

 

 

(38,534)

Forfeited

 

 

(15,474)

 

 

(49,722)

Outstanding at end of period

 

 

55,395

 

 

 

39,592

 

 

As of March 29, 2025, outstanding SARs and stock awards had an intrinsic value of $1,450,000.