Stock Compensation

12 Months Ended

Dec. 31, 2022

Stock Compensation

Stock Compensation

6. STOCK COMPENSATION

On October 13, 2016, the Board of Directors of the Company adopted the 2016 Equity Incentive Plan, which allows the Company to grant up to 400,000 shares of restricted common stock of the Company to employees, officers, directors and consultants. The grants may be in the form of restricted or performance shares of common stock of the Company. The total intrinsic value (in thousands) of the outstanding shares of restricted stock at December 31, 2022 and 2021 is $608 and $1,027, respectively.

The fair value of restricted stock awards is estimated to be the market price of the Company's common stock at the close of date of grant. The Company assumes no forfeitures as they are granted to key executives and board members.

Restricted stock activity during the years ended December 31, 2021 and 2022 is as follows:

	Number of Shares		Weighted Average Grant Date Fair Value per Share
Non-vested, December 31, 2020		36,336	$	8.98
Granted		73,684		13.94
Vested		27,500		11.84
Non-vested, December 31, 2021		82,520		12.45
Vested		26,755		12.01
Forfeited		7,906		12.50
Non-vested, December 31, 2022		47,859	$	12.70

The actual number of performance-based shares of common stock of the Company, if any, to be earned by the award recipients is determined over a three year performance measurement period based on measures that include Earnings Before Interest Taxes Depreciation and Amortization (“EBITDA”) margin, revenue growth, and free cash flow. The EBITDA margin and revenue growth performance targets have been set for each of the Minimum, Target, and Maximum levels. The actual performance amount received is determined by the Compensation Committee and may be adjusted for items determined to be unusual in nature or infrequent in occurrence. A smaller portion is also earned based on Board discretion and continued service. The stock compensation cost is recognized over the requisite performance/service period using the straight-line method and can be periodically adjusted for the probable number of shares to be awarded.

Awards are being amortized to expense ratably, based upon the vesting schedule. Stock compensation (in thousands) for the years ended December 31, 2022 and 2021 were approximately $505 and $531, respectively, based upon the value at the date of grant. There was $316 of unrecognized compensation cost related to the non-vested restricted stock as of December 31, 2022.