The 2013 Stock Incentive Plan ( 2013 Plan ) provides for the grant of any or all of the following types of awards: (a) stock options, (b) restricted stock, (c) deferred stock, (d) stock appreciation rights, and (e) other stock-based awards including restricted stock units. Awards under the 2013 Plan may be granted singly, in combination, or in tandem. Subject to standard anti-dilution adjustments as provided, the 2013 Plan provides for an aggregate of 2,600,000 shares of the Company s common stock to be available for distribution. The Company s Compensation Committee generally has the authority to administer the 2013 Plan, determine participants who will be granted awards, the size and types of awards, the terms and conditions of awards and the form and content of the award agreements representing awards. Awards under the 2013 Plan may be granted to employees, directors and consultants of the Company and its subsidiaries. As of December 31, 2019, there are 1,780,505 shares of common stock available for issuance under the 2013 Plan.

[1]

Restricted Stock Units

On January 15, 2019, the Company issued 15,000 restricted stock units ( RSUs ) under the 2013 Plan to each of its three non-management directors as an annual grant for 2019 for service on the Company s Board of Directors. Each RSU represents a contingent right to receive one share of the Company s common stock. The RSUs vested in four equal quarterly installments of 3,750 shares of common stock on March 15, 2019, June 15, 2019, September 15, 2019 and December 15, 2019, subject to continued service on the Board of Directors.

On July 14, 2019, 125,000 restricted stock units owned by the Company s Chairman and Chief Executive Officer vested in accordance with his employment agreement dated July 14, 2016 (see Note J[1] hereof). With respect to the vesting of such restricted stock units, the Company s Chairman and Chief Executive Officer delivered 56,813 shares of the Company s common stock to satisfy withholding taxes and received 68,187 net shares of common stock.

On November 27, 2019, an aggregate of 65,000 restricted stock units vested which were owned by the Company s Executive Vice President (25,000 RSUs), Chief Financial Officer (20,000 RSUs) and a consultant (20,000 RSUs). With respect to the vesting of 45,000 of such RSUs: (i) the Company s Executive Vice President delivered 7,113 shares to satisfy withholding taxes and received 17,887 net shares of common stock and (ii) the Company s Chief Financial Officer delivered 6,090 shares of common stock to satisfy withholding taxes and received 13,910 net shares of common stock.

On December 20, 2019, the Company issued an aggregate of 25,000 RSUs under the 2013 Plan to its Executive Vice President (10,000 RSUs), Chief Financial Officer (7,500 RSUs) and a consultant (7,500 RSUs). 50% of such RSUs will vest on the one year anniversary of the date of grant (December 20, 2020) and 50% will vest on the two year anniversary of the date of grant (December 20, 2021), subject to continued service to the Company.

On March 8, 2018, the Company granted 15,000 restricted stock units ( RSUs ) under the 2013 Plan to each of its three non-management directors as an annual grant for 2018 for service on the Company s Board of Directors. The RSUs vested in four equal quarterly installments of 3,750 shares of common stock on each of March 15, 2018, June 15, 2018, September 15, 2018 and December 15, 2018, subject to continued service on the Board of Directors.

On June 9, 2018, an aggregate of 70,000 RSUs vested which were owned by the Company s Chief Financial Officer (25,000 RSUs), Executive Vice President (25,000 RSUs) and a consultant (20,000 RSUs). With respect to the vesting of 50,000 of such RSUs: (i) the Company s Chief Financial Officer delivered 9,171 shares to satisfy withholding taxes and received 15,829 net shares of common stock; and (ii) the Company s Executive Vice President delivered 7,613 shares of common stock to satisfy withholding taxes and received 17,387 net shares of common stock.

On July 14, 2018, 375,000 RSUs owned by the Company s Chairman and Chief Executive Officer vested in accordance with his employment agreement dated July 14, 2016 (see Note J[1] hereof). With respect to such vesting of restricted stock units, the Company s Chairman and Chief Executive Officer delivered 172,313 shares of common stock to satisfy withholding taxes and received 202,687 net shares of common stock.

On November 27, 2018, the Company granted an aggregate of 130,000 RSUs under the 2013 Plan to its Chief Financial Officer (40,000 RSUs), Executive Vice President (50,000 RSUs) and a consultant (40,000 RSUs). Such RSUs vested 50% on November 27, 2019 and will vest 50% on November 27, 2020, subject to continued service to the Company.

The fair value of restricted stock units is determined based on the number of shares granted and the quoted market price of the Company s common stock on the date of grant for time-based and performance-based awards.

All of the Company s issued and RSUs have divided equivalent rights. As of December 31, 2019, there was $90,000 accrued for dividend equivalent rights. As of December 31, 2018, there was $76,000 accrued for dividend equivalent right.

A summary of restricted stock units granted during the year ended December 31, 2019 is as follows (each restricted stock unit represents the contingent right to receive one share of the Company s common stock):

		Number of Shares				Weighted-Average Grant Date Fair Value
Balance of restricted stock units outstanding at December 31, 2018			505,000			$	2.17
Grants of restricted stock units			70,000				2.45
Vested restricted stock units			(235,000	)			(2.29	)
Balance of unvested restricted stock units at December 31, 2019			340,000			$	2.15

Restricted stock unit compensation expense was $567,000 for the year ended December 31, 2019 and $687,000 for the year ended December 31, 2018.

The Company has an aggregate of $232,000 of unrecognized restricted stock unit compensation expense as of December 31, 2019 to be expensed over a weighted average period of 1.2 years.

[2]

Stock Options

At December 31, 2019, stock options to purchase an aggregate of 105,000 shares of common stock were outstanding under the 2013 Plan and options to purchase 500,000 shares of common stock were outstanding representing option grants outside of the 2013 Plan (issued prior to the establishment of the 2013 Plan). There were no grants of stock options during the years ended December 31, 2019 and 2018.

The following table summarizes stock option activity for the years ended December 31:

		2019								2018
						Weighted								Weighted
						Average								Average
		Options				Exercise				Options				Exercise
		Outstanding				Price				Outstanding				Price
Options outstanding at beginning of year			1,635,000			$	1.18				2,010,000			$	1.28
Granted			-					__			-				-
Expired								__							-
Exercised			(1,030,000	)		$	1.05				(375,000	)		$	1.74
Options outstanding at end of year			605,000			$	1.39				1,635,000			$	1.18
Options exercisable at end of year			605,000			$	1.39				1,635,000			$	1.18

During the year ended December 31, 2019 and 2018, the Company did not recognize any stock-based compensation related to the vesting of prior issued stock options to employees and directors. The Company at December 31, 2019 and 2018 had no remaining unrecognized expenses related to unvested stock options to employees and directors. The aggregate intrinsic value of all stock options exercisable at December 31, 2019 and 2018 was, $495,000 and $1,732,000, respectively.

During the year ended December 31, 2019, stock options to purchase an aggregate of 1,030,000 shares of the Company s common stock were exercised (964,849 shares of which were exercised on a net exercise (cashless basis)) by the Chairman and Chief Executive Officer of the Company (750,000 shares), Chief Financial Officer and Executive Vice President (50,000 shares each), our three outside directors (35,000 shares each) and a consultant (75,000 shares) at exercise prices ranging from $0.83 to $1.65 per share. With respect to the options to purchase 964,849 shares on a net exercise (cashless) basis, aggregate net shares of 405,381 were delivered to the holders.

During the year ended December 31, 2018, stock options to purchase an aggregate of 375,000 shares of the Company s common stock were exercised (350,000 shares of which were exercised on a net exercise (cashless basis)), by a director of the Company (325,000 shares), and by one other director of the Company (25,000 shares) at exercise prices ranging from $1.19 to $1.88 per share. With respect to the aforementioned stock option to purchase 350,000 shares exercised on a net exercise (cashless) basis, net shares of 144,954 were delivered to the director.

The following table presents information relating to all stock options outstanding and exercisable at December 31, 2019:

			Weighted
		Weighted	Average
Range of		Average	Remaining
Exercise	Options	Exercise	Life in	Options
Price	Outstanding	Price	Years	Exercisable
$1.19 - $2.34	605,000	$1.39	2.36	605,000