NOTE (9) – Stock-based Compensation

Prior to July 25, 2018, the Company issued stock-based compensation awards to its directors and employees under the 2008 Long-Term Incentive Plan (“2008 LTIP”). The 2008 LTIP permitted the grant of non-qualified and incentive stock options, stock appreciation rights, full value awards and cash incentive awards for up to 2,000,000 shares of common stock. As of July 25, 2018, the Company ceased granting awards under the 2008 LTIP.

On July 25, 2018, the stockholders approved the 2018 Long-Term Incentive Plan ("2018 LTIP"). As with the 2008 LTIP, the 2018 LTIP permits the grant of non-qualified and incentive stock options, stock appreciation rights, full value awards and cash incentive awards. The plan is in effect for ten years. The maximum number of shares that can be awarded under the plan is 1,293,109 shares of common stock as of December 31, 2018. As of December 31, 2019, 458,932 shares had been awarded and 834,177 shares are available under the 2018 LTIP.

In February 2018 and April 2017, the Company awarded 97,195 and 129,270 of cash settled restricted stock units (“RSUs”) to its CEO under the 2008 LTIP. All RSUs vest at the end of two years from the date of the grant and are subject to forfeiture until vested. Each RSU entitles the CEO to receive cash equal to the fair market value of one share of common stock on the applicable payout date. Compensation expense is determined based on the fair value of the award and is re measured at each reporting period and is classified as a liability in the consolidated statements of financial condition. The Company recorded $147 thousand and $54 thousand of compensation expense related to these awards during the years ended December 31, 2019 and 2018, respectively. As of February 28, 2020, the RSUs were fully vested, and all compensation costs related to the vested RSUs were fully recognized.

In February 2020 and January 2019, the Company awarded 30,930 and 42,168 shares of common stock, respectively, to its directors under the 2018 LTIP, which are fully vested. The Company recorded $45 thousand and $52 thousand of compensation expense for the quarters ended March 31, 2020 and March 31, 2019, respectively, based on the fair value of the stock, which was determined using the average of the high and the low price of the stock on the date of the award.

In February 2020 and 2019, the Company awarded 140,218 shares and 428,797 shares, respectively, of restricted stock to its officers and employees under the 2018 LTIP. Each restricted stock award is valued based on the fair value of the stock, which was determined using the average of the high and the low price of the stock on the date of the award. These awarded shares of restricted stock are fully vested over a two-year period from their respective dates of grants. Stock based compensation expense is recognized on a straight-line basis over the vesting period. During the quarter ended March 31, 2020, the Company recorded $71 thousand of stock based compensation expense related to these awards. As of March 31, 2020, unrecognized compensation cost related to non-vested restricted stock awards was $430 thousand which is expected to be recognized over a period of 23 months.

No stock options were granted during the three months ended March 31, 2020 and 2019.

The following table summarizes stock option activity during the three months ended March 31, 2020 and 2019:


	Three Months Ended			Three Months Ended
	March 31, 2020			March 31, 2019
		Weighted			Weighted
		Average			Average
	Number	Exercise		Number	Exercise
	Outstanding	Price		Outstanding	Price
Outstanding at beginning of period	455,000	$	1.67	537,500	$	2.19
Granted during period	—		—	—		—
Exercised during period	—		—	—		—
Forfeited or expired during period	(5,000)		6.00	(82,500)		4.89
Outstanding at end of period	450,000	$	1.62	455,000	$	1.67
Exercisable at end of period	360,000	$	1.62	185,000	$	1.74

The Company recorded $9 thousand of stock-based compensation expense related to stock options during the three months ended March 31, 2020 and 2019. As of March 31, 2020, the unrecognized compensation cost related to nonvested stock options granted under the plan was $35 thousand. The cost is expected to be recognized over a period of 11 months.

Options outstanding and exercisable at March 31, 2020 were as follows:

Outstanding

Exercisable

Weighted

Average

Weighted

Remaining

Average

Aggregate

Average

Aggregate

Number

Contractual

Exercise

Intrinsic

Number

Exercise

Intrinsic

Grant Date

Outstanding

Life

Price

Value

Outstanding

Price

Value

February 24, 2016

450,000

5.90 years

1.62

360,000

1.62

450,000

5.90 years

1.62

—

360,000

1.61

—