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STOCK-BASED COMPENSATION PLAN

As of

December 31, 2016,

we have unvested restricted stock awards and stock options outstanding which were granted under the inTEST Corporation

2007

Stock Plan (the

"2007

Stock Plan") and the inTEST Corporation

2014

Stock Plan

(the

"2014

Stock Plan"). The

2007

Stock Plan was approved at our annual meeting of stockholders held on

June 13, 2007

and permits the granting of stock options or restricted stock for up to

500,000

shares of our common stock to officers, other key employees and consultants. As of

December 31, 2016,

there were

remaining shares available to grant under the

2007

Stock Plan. The

2014

Stock Plan was approved at our annual meeting of stockholders held on

June 25, 2014

and permits the granting of stock options, restricted stock, stock appreciation rights or restricted stock units for up to

500,000

shares of our common stock to directors, officers, other key employees and consultants. As of

December 31, 2016,

there were

456,300

shares available to grant under the

2014

Stock Plan.

Our unvested restricted stock awards and stock options are accounted for based on their grant date fair value. As of

December 31, 2016,

total compensation expense to be recognized in future periods was

$316.

The weighted average period o

ver which this expense is expected to be recognized is

2.5

years.

The following table summarizes the compensation expense we recorded during

2016

and

2015,

related to unvested shares of restricted stock and stock options.

	Years Ended December 31,
	201 6		2015
Cost of revenues	$	10	$	10
Selling expense		6		5
Engineering and product development expense		11		10
General and administrative expense		242		94
	$	269	$	119

There was

compensation expense capitalized in

2016

2015.

Stock Options

We record compensation expense for stock options based on the fair market value of the options as of the grant date.

option

may

be granted with an exercise period in excess of

ten

years from the date of grant. Generally, stock options will be granted with an exercise price equal to the fair market value of our stock on the date of grant and will vest over

four

years.

stock options were granted during

2015.

The fair value for stock options granted during

2016

was estimated at the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions:

Risk-free interest rate	1.30	%
Dividend yield	0.00	%
Expected common stock market price volatility factor	.40
Weighted average expected life of stock options (years)	4

The per share weighted average fair value of stock options issued during

2016

was

$1.43.

The following table summarizes the activity related to stock options for the year ended

December 31, 2016:

	Number of Shares		Weighted Average Exercise Price
Options outstanding, January 1, 2016		-	$	-
Granted		19,800		4.37
Exercised		-		-
Canceled		-		-
Options outstanding, December 31, 2016 (none exercisable)		19,800		4.37

Restricted Stock Awards

We record compensation expense for restricted stock awards (unvested shares) based on the quoted market price of our stock at the grant date and amortize the expense over the vesting period. Restricted stock awards generally vest over

four

years.

The following table summarizes the activity related to unvested shares for the

two

years ended

December 31, 2016:

	Number of Shares			Weighted Average Grant Date Fair Value
Unvested shares outstanding, January 1, 2015		101,875		$	3.66
Granted		-			-
Vested		(33,125	)		3.65
Forfeited		(5,000	)		3.97
Unvested shares outstanding, December 31, 2015		63,750			3.64
Granted		86,400			4.27
Vested		(53,125	)		3.94
Forfeited		-			-
Unvested shares outstanding, December 31, 2016		97,025			4.04

The total fair value of the shares that vested during the years ended

December 31, 2016

and

2015

was

$208

and

$138,

respectively, as of the vesting dates of these shares.