Quarterly report pursuant to Section 13 or 15(d)

STOCK-BASED COMPENSATION

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STOCK-BASED COMPENSATION
9 Months Ended
Sep. 30, 2021
Share-based Payment Arrangement [Abstract]  
STOCK-BASED COMPENSATION

NOTE 9 - STOCK-BASED COMPENSATION

 

Stock Option Plans

 

[A] Stock options:

 

The following table summarizes the activity relating to the Company’s stock options for the nine-month period ended September 30, 2021:

 

    Options     Weighted- Average Exercise Price     Weighted-Average Remaining Contractual Terms   Aggregate Intrinsic Value  
                       
Outstanding at beginning of year     3,624     $ 5.85              
Granted     120       7.77              
Exercised     (146 )     5.59              
Forfeited or expired     (101 )     6.23              
                             
Outstanding at end of period     3,497     $ 5.92     7.5 years   $ 4,018  
                             
Exercisable at end of period     1,290     $ 5.65     6.1 years   $ 1,801  

 

 

The fair value of each option grant on the date of grant is estimated using the Black-Scholes option-pricing model reflecting the following weighted-average assumptions:

 

    September 30,  
    2020     2021  
             
Expected volatility     44.7 %     50.2 %
Expected life of options (in years)     6       7  
Risk free interest rate     1.17 %     0.69 %
Dividend yield     0 %     0 %
Weighted-average fair value of options granted during year   $ 2.58     $ 3.81  

 

Expected volatility is based on historical volatility of the Company’s common stock and the expected life of options is based on historical data with respect to employee exercise periods.

 

The Company recorded stock-based compensation expense of $366 and $1,209 for the three- and nine-month periods ended September 30, 2020, respectively, and $345 and $1,061, for the three- and nine-month periods ended September 30, 2021, respectively, in connection with awards made under the stock option plans.

 

The fair value of options vested during the nine-month periods ended September 30, 2020 and 2021 was $1,194 and $508, respectively. The total intrinsic value of options exercised during the nine-month periods ended September 30, 2020 and 2021 was $228 and $470, respectively.

 

 

As of September 30, 2021, there was approximately $3,089 of unrecognized compensation cost related to non-vested options granted under the Company’s stock option plans. That cost is expected to be recognized over a weighted-average period of 3.76 years.

 

The Company estimates forfeitures at the time of valuation and reduces expense ratably over the vesting period. This estimate is adjusted periodically based on the extent to which actual forfeitures differ, or are expected to differ, from the previous estimate.

 

[B] Restricted Stock Awards:

 

The Company grants restricted stock to employees, whereby the employees are contractually restricted from transferring the shares until they are vested. The stock is unvested at the time of grant and, upon vesting, there are no legal restrictions on the stock. The fair value of each share is based on the Company’s closing stock price on the date of the grant. A summary of all non-vested restricted stock for the nine-month period ended September 30, 2021 is as follows:

 

    Number of Non-Vested Shares     Weighted-Average Grant Date Fair Value  
             
Restricted stock, non-vested, beginning of year     806     $ 5.54  
Granted     450       7.63  
Vested     (253 )     5.75  
Forfeited or expired     (91 )     6.55  
                 
Restricted stock, non-vested, end of period     912     $ 6.41  

 

The Company recorded stock-based compensation expense of $593 and $1,641, respectively, for the three- and nine-month periods ended September 30, 2020, and $533 and $1,908, respectively, for the three- and nine-month periods ended September 30, 2021, in connection with restricted stock grants. As of September 30, 2021, there was $3,609 of total unrecognized compensation cost related to non-vested shares. That cost is expected to be recognized over a weighted-average period of 2.6 years.

 

[C] Restricted Stock Units:

 

The Company also grants restricted stock units (RSUs) to employees. The following table summarizes the activity relating to the Company’s restricted stock units for the nine-month period ended September 30, 2021:

 

    Number of
Restricted
Stock Units
    Weighted-Average
Grant Date
Fair Value
 
             
Restricted stock units, non-vested, beginning of year     75     $ 5.60  
Granted     -       -  
Vested     (34 )     5.60  
Forfeited     (4 )     5.60  
                 
Restricted stock units, non-vested, end of period     37     $ 5.60  

 

The Company recorded stock-based compensation expense of $33 and $228, respectively, for the three- and nine-month periods ended September 30, 2020, and $51 and $152, respectively, for the three- and nine-month periods ended September 30, 2021, in connection with the RSUs. As of September 30, 2021, there was $99 total unrecognized compensation cost related to non-vested RSUs. That cost is expected to be recognized over a weighted-average period of 0.6 years.