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, 2020, there are 1,877,308 shares of common stock available for issuance under the 2013 Plan.

[1]

Restricted Stock Units

A summary of restricted stock units granted during the year ended December 31, 2020 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, 2019			340,000			$	2.15
Grants of restricted stock units			70,000				2.68
Vested restricted stock units			(247,500	)			(2.23	)
Balance of unvested restricted stock units at December 31, 2020			162,500			$	2.25

  

Restricted stock unit compensation expense was $302,000 for the year ended December 31, 2020 and $567,000 for the year ended December 31, 2019.

The Company has an aggregate of $105,000 of unrecognized restricted stock unit compensation expense as of December 31, 2020 to be expensed over a weighted average period of 1.75 years.

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 restricted stock units have divided equivalent rights. As of December 31, 2020 and 2019, there was $53,000 and $90,000 accrued for dividend equivalent rights which were included in other accrued expenses.

[2]

Stock Options

At December 31, 2020, one stock option to purchase 500,000 shares of common stock were outstanding representing an option grant 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, 2020 and 2019.

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

 

		2020								2019
						Weighted								Weighted
						Average								Average
		Options				Exercise				Options				Exercise
		Outstanding				Price				Outstanding				Price
Options outstanding at beginning of year			605,000			$	1.39				1,635,000			$	1.18
Granted			—				—				―				—
Expired			—				—				—				—
Exercised			(105,000	)		$	2.34				(1,030,000	)		$	1.05
Options outstanding at end of year			500,000			$	1.19				605,000			$	1.39
Options exercisable at end of year			500,000			$	1.19				605,000			$	1.39

 

During the year ended December 31, 2020 and 2019, 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, 2020 and 2019 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, 2020 and 2019 was $1,250,000 and $495,000, respectively.

During the year ended December 31, 2020, stock options to purchase an aggregate of 105,000 shares of the Company’s Common Stock at an exercise price of $2.34 per share were exercised on net exercise (cashless basis) by each of the Company’s three outside directors. With respect to the net exercise (cashless) of these stock options, 4,707 aggregate net shares were delivered to the outside directors.

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), the Company’s 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.

The following table presents information relating to all stock options outstanding and exercisable at December 31, 2020:  

			Weighted
		Weighted	Average
		Average	Remaining
Exercise	Option	Exercise	Life in	Option
Price	Outstanding	Price	Years	Exercisable
$1.19	500,000	$1.19	1.84	500,000