16. Stock-Based Compensation

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The Gold Resource Corporation 2016 Equity Incentive Plan (the “Incentive Plan”) allows for the issuance of up to 5 million shares of common stock in the form of incentive and non-qualified stock options, stock appreciation rights, restricted stock units, stock grants, stock units, performance shares, performance share units and performance cash. Additionally, pursuant to the terms of the Incentive Plan, any award outstanding under the prior plan that is terminated, expired, forfeited, or canceled for any reason, will be available for grant under the Incentive Plan.

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Effective January 1, 2021, the Company’s Board of Directors, on the recommendation of the Compensation Committee, implemented a program to issue deferred stock units. DSUs are a qualifying instrument under the terms of the Company’s Incentive Plan and therefore do not require additional shareholder approval. The vesting and settlement terms of the DSUs are determined by the Compensation Committee at the time the DSUs are awarded.

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130,000 DSUs were granted to the Board of Directors during the period ended March 31, 2021 and are redeemable in cash or shares at the earlier of 10 years or upon the eligible directors’ termination. Termination is deemed to occur on the earliest of (1) the date of voluntary resignation or retirement of the director from the Board; (2) the date of death of the director; or (3) the date of removal of the director from the Board whether by shareholder resolution, failure to achieve re-election or otherwise; and on which date the director is not a director or employee of the Company or any of its affiliates. These awards contain a cash settlement feature and are therefore classified as a liability and are marked to fair value each reporting period. The Company may also issue DSUs for directors in lieu of board fees at their request. As of December 31, 2021, there were 1,960 DSUs granted in lieu of board fees that are also subject to mark-to-market adjustment. As of December 31, 2021, the Company recorded $0.2 million of other non-current liability and expense for the DSUs based on the fair value of the Company’s stock price.

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Stock-Based Compensation Expense

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Stock-based compensation expense for stock options, RSUs, and DSUs is as follows:

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In 2020, in connection with the Fortitude Gold Spin-Off, the Company accelerated the vesting on 105,568 stock options and 127,068 RSU’s for four employees which resulted in $0.8 million of incremental stock-based compensation, included in restructuring expense.

The estimated unrecognized stock-based compensation expense from unvested options and RSUs as of December 31, 2021 was approximately $0.7 million and $0.3 million, respectively, and is expected to be recognized over the remaining vesting periods of up to three years.

The Company has a short-term incentive plan (“STIP”) for its executive officers that provides for the grant of either cash or stock-based bonus awards payable upon achievement of specified performance metrics. As of December 31, 2021 we accrued $0.7 million related to the STIP program. As of December 31, 2020, there were no accruals related to the STIP.

Stock Options

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A summary of stock option activity under the Incentive Plan for the years ended December 31, 2021 and 2020 is presented below:

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The weighted-average fair value of options per share granted during the years ended December 31, 2021, 2020, and 2019 was $1.65, $2.38 and $1.94, respectively. The total intrinsic value of options exercised during the years ended December 31, 2021, 2020, and 2019, was $0.1million, nil, and $0.2 million, respectively. The total fair value of options vested during the years ended December 31, 2021, 2020 and 2019 was $0.3 million, $1.0 million and $1.6 million, respectively.

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253,335 options were exercised during the year ended December 31, 2021, at a weighted average exercise price of $1.31 per share. For these exercises, 237,719 shares of the Company’s common stock were issued. For the remaining 15,616 options, no common shares were issued because the same number of common shares were surrendered due to exercise by attestation. No stock options were exercised during the year ended December 31, 2020.

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The following table summarizes information about stock options outstanding at December 31, 2021:

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The assumptions used to determine the value of stock-based awards under the Black-Scholes method are summarized below:

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Restricted and Deferred Stock Units

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A summary of RSU and DSU activity under the Incentive Plan for the years ended December 31, 2021 and 2020 is presented below:

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2,614 RSUs and 131,960 DSUs were granted during the year ended December 31, 2021. The weighted-average fair value per share of RSUs granted during the years ended December 31, 2021, 2020, and 2019 was, $2.56, $3.78 and $4.83, respectively. The weighted-average fair value per share of DSUs granted during the years ended December 31, 2021 was $1.63. The total intrinsic value of RSUs vested during the years ended December 31, 2021, 2020, and 2019 was $0.1 million, $0.8 million, and $0.4 million, respectively. No DSUs were converted to common shares.