We award restricted stock unit grants to promote long-term retention of executive officers and permit them to accumulate equity ownership in Tandy Leather Factory, Inc., so that the interests of our management team are directly aligned with the interest of our stockholders. We believe it is important to have an element of compensation that is focused directly on retaining talent so that we can minimize potential loss of company and industry knowledge and the disruption inherent in unplanned turnovers. Restricted stock unit grants also align our executive officers with our stockholders by making them stockholders themselves. Retaining talent and aligning interests encourages our executive officers to take actions to enhance the value of our business and increase stockholder value. Time-based restricted stock unit awards generally vest equally over three or four years. During fiscal 2024 we did not make any grants of restricted stock units to our executive officers.

The Company has not awarded stock options for executive compensation in recent years and has not timed its disclosure of material non-public information for the purpose of affecting executive compensation. Were the Company to make future awards of stock options or other market price-based equity, the Company’s Board would take into account any material non-public information when determining the timing and terms of such award, so that the value of such awards would not be expected to substantially increase following the disclosure of such information.

The Company has not awarded stock options for executive compensation in recent years and has not timed its disclosure of material non-public information for the purpose of affecting executive compensation. Were the Company to make future awards of stock options or other market price-based equity, the Company’s Board would take into account any material non-public information when determining the timing and terms of such award, so that the value of such awards would not be expected to substantially increase following the disclosure of such information.