NOTE 11 — STOCK-BASED COMPENSATION

Stock Option Plans

At the 2024 Annual Meeting held on June 13, 2024, the Company’s stockholders approved the 2024 Plan, which replaced the 2013 Plan. The Compensation Committee of the Board of Directors administers the 2024 Plan and approves the grant and terms of awards (consistent with the terms of the 2024 Plan).

The 2024 Plan permits the grant of any or all of the following types of awards to grantees: stock options, including non-qualified options and ISOs; SARs; restricted stock; deferred stock and restricted stock units; performance units and performance shares; dividend equivalents; and other stock-based awards. Eligible grantees include employees, officers, non-employee consultants and non-employee directors of the Company and its affiliates. A total of 449,260 shares of common stock were initially available for issuance under the 2024 Plan.

Accordingly, all the outstanding awards under the 2013 Plan will remain governed by that plan and any unallocated pool of un-issued options under the 2013 Plan were re-characterized to the 2024 Plan. Under these plans, the Company is authorized to issue equity awards (stock options, stock appreciation rights or “SARs”, and restricted stock) to directors and associates of the Company. A total of 449,260 shares of common stock were initially available for issuance under the 2024 Plan. The options granted under the 2024 Plan have terms of ten years or less, and typically vest and become fully exercisable ratably over three years of continuous service to the Company from the date of grant. At  January 31, 2025 and 2024, options to purchase 3,630 and 4,496 shares of the Company’s common stock, respectively, had been granted and were outstanding under these plans. At  January 31, 2025, there were no SARs outstanding.

A summary of stock option activity in fiscal 2024 follows:

No options were granted in fiscal 2024 or fiscal 2023.

At January 31, 2025, there was no unrecognized compensation cost related to non-vested stock-option awards. The expense associated with stock option awards was $0 and $71,000, respectively, for fiscal 2024 and 2023. No options were exercised during fiscal 2024 or 2023.

The 2024 Plan contains change in control provisions whereby any outstanding equity awards under the plans subject to vesting, which have not fully vested as of the date of the change in control, shall automatically vest and become immediately exercisable. One of the change in control provisions is deemed to occur if there is a change in beneficial ownership, or authority to vote, directly or indirectly, of securities representing 20% or more of the total of all of the Company’s then-outstanding voting securities, unless through a transaction arranged by or consummated with the prior approval of the Board of Directors. Other change in control provisions relate to mergers and acquisitions or a determination of change in control by the Board of Directors.

Restricted Stock

The Company is authorized to grant restricted stock awards to associates and directors under the 2024 Plan. The Company has also issued restricted stock as inducement grants to certain new employees. The restrictions on the shares granted generally lapse over a one- to four-year term of continuous employment from the date of grant. On November 1, 2022, our then-serving CEO, Wyche T. Green, III, was awarded 3,333 shares of restricted common stock that will vest in three substantially equal annual installments commencing on the first anniversary of the date of grant. On May 20, 2022, Mr. Green was awarded 10,000 shares of restricted common stock that will vest in three substantially equal annual installments commencing on the first anniversary of the date of grant. On April 1, 2023, Mr. Green was awarded 13,333 shares of restricted common stock that will vest in three substantially equal annual installments commencing on the first anniversary of the date of grant. On July 18, 2024, Mr. Green was awarded 20,000 shares of restricted common stock that will vest in full on the date of the Company's 2025 Annual Meeting. On July 18, 2024, Mr. Green was awarded 13,333 shares of restricted common stock that will vest in full upon the Company's common stock achieving a closing price of $26.25. This grant was later partially rescinded to 6,667 shares. Prior to his appointment as CEO of the Company, Mr. Stilwill was awarded 11,333 shares of restricted common stock on April 1, 2023, that will vest in three substantially equal annual installments commencing on the first anniversary of the date of grant. On April 29, 2024, Mr. Stilwill was awarded 11,333 shares of restricted common stock that will vest in three substantially equal annual installments commencing on the first anniversary of the date of grant. The grant date fair value per share of restricted stock, which is based on the closing price of our common stock on the grant date, is expensed on a straight-line basis as the restriction period lapses. The shares represented by restricted stock awards are considered outstanding at the grant date, as the recipients are entitled to voting rights. A summary of restricted stock award activity for fiscal 2024 and 2023 is presented below:

At January 31, 2025, there was $1,205,000 of unrecognized compensation cost related to restricted stock awards. That cost is expected to be recognized over a remaining period of 1.14 years.

The expense associated with restricted stock awards for associates and directors was $1,485,000 and $1,590,000, for fiscal 2024 and 2023, respectively.