STOCK PLANS

6 Months Ended

Jun. 30, 2023

8.	STOCK PLANS

On January 26, 2023, the Board of Directors of the Company declared a 5% stock dividend payable as of March 24, 2023 to shareholders of record as of February 28, 2023. All stock options and restricted stock amounts outstanding have been adjusted to give retroactive effect to stock dividends.

The following table presents the activity related to stock options for the three months ended June 30, 2023.

	Number of Shares		Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Term (in years)
Options outstanding at Beginning of Period		663,678	$	8.56
Granted		—		—
Expired		—		—
Cancelled / Forfeited		—		—
Exercised		—		—
Options outstanding at End of Period		663,678	$	8.56	$	240,488		4.95
Exercisable (vested) at End of Period		578,314	$	8.39	$	240,488		4.58

The following table presents the activity related to stock options for the six months ended June 30, 2023.

	Number of Shares			Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Term (in years)
Options outstanding at Beginning of Period		684,837		$	8.41
Granted		—			—
Expired		—			—
Cancelled / Forfeited		—			—
Exercised		(21,159	)		3.83
Options outstanding at End of Period		663,678		$	8.56	$	240,488		4.95
Exercisable (vested) at End of Period		578,314		$	8.39	$	240,488		4.58

The intrinsic value of options exercised was $97,000 and $125,000 during the six months ended June 30, 2023 and June 30, 2022, respectively. The fair value of awards vested was $123,000 and $142,000 during the six months ended June 30, 2023 and June 30, 2022, respectively.

As of June 30, 2023, there was $109,000 of total unrecognized compensation cost related to non-vested stock options. This cost is expected to be recognized over a weighted average period of approximately 1.97 years.

There was $22,000 and $49,000 of recognized compensation cost related to stock options granted for the three and six months ended June 30, 2023, respectively.

The following table presents the activity related to non-vested restricted stock for the three months ended June 30,2023.

	Number of Shares		Weighted Average Grant Date Fair Value			Aggregate Intrinsic Value	Weighted Average Remaining Contractual Term (in years)
Non-vested Restricted stock outstanding at Beginning of Period		273,973	$	9.18
Granted		1,500		7.10
Cancelled / Forfeited		—		—
Exercised/Released/Vested		—		—
Non-vested restricted stock outstanding at End of Period		275,473	$	9.17	$	1,928,311	2.94

The following table presents the activity related to non-vested restricted stock for the six months ended June 30, 2023.

	Number of Shares			Weighted Average Grant Date Fair Value			Aggregate Intrinsic Value	Weighted Average Remaining Contractual Term (in years)
Non-vested Restricted stock outstanding at Beginning of Period		248,418		$	9.34
Granted		77,351			8.49
Cancelled / Forfeited		—			—
Exercised/Released/Vested		(50,296	)		8.96
Non-vested restricted stock outstanding at End of Period		275,473		$	9.17	$	1,928,311	2.94

The weighted average fair value of restricted stock granted during the six months ended June 30, 2023 was $8.49 per share.

As of June 30, 2023, there was $1,539,000 of total unrecognized compensation cost related to non-vested restricted stock. This cost is expected to be recognized over a weighted average period of approximately 2.94 years.

There was $158,000 and $315,000 of recognized compensation cost related to restricted stock awards for the three and six months ended June 30, 2023, respectively.

The Company has an Employee Stock Purchase Plan (“ESPP”). There are 358,911 shares authorized for issuance under the ESPP. The total number of shares authorized has been adjusted to give retroactive effect to stock dividends and stock splits, including the 5% stock dividend declared on January 26, 2023, payable March 24, 2023 to shareholders of record as of February 28, 2023. The ESPP will expire on March 16, 2026.

The ESPP is implemented by participation periods of not more than twenty-seven months each. The Board of Directors determines the commencement date and duration of each participation period. The Board of Directors approved the current participation period of November 24, 2022 to November 23, 2023. An eligible employee is one who has been continually employed for at least 90 days prior to commencement of a participation period. Under the terms of the ESPP, employees can choose to have up to 10 percent of their compensation withheld to purchase the Company’s common stock each participation period. The purchase price of the stock is 85 percent of the lower of the fair value on the last trading day before the date of participation or the fair value on the last trading day during the participation period.

As of June 30, 2023, there was $15,000 of unrecognized compensation cost related to ESPP issuances. This cost is expected to be recognized over a weighted average period of approximately 0.50 years.

There was $8,000 and $16,000 of recognized compensation cost related to ESPP issuances for the three and six months ended June 30, 2023, respectively.

The weighted average fair value option at issuance date during the six months ended June 30, 2023 was $1.83 per share.

A summary of the weighted average assumptions used in valuing ESPP issuances during the three and six months ended June 30, 2023 is presented below.

	Three Months Ended June 30, 2023			Six Months Ended June 30, 2023
Risk Free Interest Rate		4.75	%		4.75	%

Expected Dividend Yield		0.00	%		0.00	%

Expected Life in Years		1.00			1.00

Expected Price Volatility		16.58	%		16.58	%