(

)

Stock Option and Purchase Plans

The Company's stock compensation program provides for the grant of restricted stock (including performance-based restricted stock), unrestricted stock, stock options and stock appreciation rights. A total of

3,476,021

shares were registered for issuance under the

2015

Omnibus Plan. On

May 12, 2020,

the

2015

Omnibus Plan was replaced with the

2020

Omnibus Plan. A total of

4,596,271

shares were registered for issuance under the

2020

Omnibus Plan. Additionally, awards under the

2010

and

2015

Omnibus Plans that are cancelled without having been fully exercised or vested are available again for new awards under the

2020

Omnibus Plan. The aggregate number of shares available for future grant as of

December

31,

2020

and

2019

was

3,598,271

and

1,153,271,

respectively.

The

2015

and

2020

Omnibus Plans provide for restrictions which lapse after

three

years. During the restricted period, which is commensurate with each vesting period, the recipient has the right to receive dividends and voting rights for the shares. Generally, if a recipient leaves the Company before the end of the restricted period or if performance requirements, if any, are

not

met, the shares will be forfeited.

Under the plans, the Company

may

grant options to purchase common stock to officers, key employees and non-employee directors. Options

may

be granted at

not

less than the market price on the date of grant. Stock option grants under the

2015

and

2020

Omnibus Plans include a

five

year life along with vesting after

three

years of service.

Compensation expense is measured based on the fair value at the date of grant and is recognized on a straight-line basis over the vesting period. Fair value for restricted shares is equal to the stock price on the date of grant, while the fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing method. The Company uses historical Company and industry data to estimate the expected price volatility, the expected option life and the expected dividend yield. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the estimated life of the option. Forfeitures are recorded as they occur. Stock based compensation expense of

$426,000

and

$469,000

has been recorded in selling, general and administrative expense in the consolidated statements of operations for the years ended

December 31, 2020

and

2019,

respectively.

The following weighted average assumptions were used to estimate the fair value of options granted using the Black-Scholes option-pricing model:

	Year ended December 31,
	2020			2019
Expected life (years)		4			4.0
Expected volatility		52.6	%		53.9	%
Risk-free interest rates		0.34	%		2.30	%
Expected dividend yield		0.0	%		0.0	%

A summary of the restricted stock activity is as follows:

				Weighted-		Weighted-
				average		average		Aggregate
	Number of			Grant Date		Remaining		Intrinsic
	Shares			Fair Value		Term		Value
Nonvested shares at January 1, 2020		324,500		$	1.03
Granted		0			0
Vested		(324,500	)		1.03
Forfeited		0			0
Nonvested shares at December 31, 2020		0		$	0		0	$	0

The total fair value of shares vested during

2020

and

2019

was

$392,000

and

$533,000,

respectively.

The following table summarizes option activity for the year ended

December 31, 2020:

				Weighted-		Weighted-
				average		average		Aggregate
	Number of			Exercise Price		Remaining		Intrinsic
	Shares			Per Share		Term		Value
Outstanding at January 1, 2020		2,567,750		$	1.26
Granted		930,000			0.82
Exercised		(306,500	)		0.96
Forfeited		0			0
Expired		(445,000	)		1.5
Outstanding at December 31, 2020		2,746,250		$	1.10		2.97		1,211,995
Exercisable at December 31, 2020		517,000		$	1.04		0.74		250,500

The weighted average grant date fair value based on the Black-Scholes option pricing model for options granted in the years ended

December

31,

2020

and

2019

was

$0.33

and

$0.46

per share, respectively. There were

306,500

options exercised in

2020

with an intrinsic value of

$392,000.

There were

options exercised in

2019.

As of

December

31,

2020,

there was

$423,000

of total unrecognized compensation cost related to unvested share-based compensation granted under the plans. That cost is expected to be recognized over a weighted-average period of

1.1

years. The total fair value of option shares vested during the years ended

December

31,

2020

and

2019

was

$113,000

and

$318,000,

respectively.