STOCK COMPENSATION

12 Months Ended

Dec. 31, 2023

STOCK COMPENSATION

STOCK COMPENSATION

8. 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 and 89,303 share remain available to be granted as of December 31, 2023. 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, 2023 and 2022 is $510 and $608, 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, 2023 is as follows:

	Number of Shares		Weighted Average Grant Date Fair Value per Share
Non-vested, December 31, 2022		47,859		12.70
Granted		4,410		19.15
Vested		9,991		18.19
Non-vested, December 31, 2023		42,278	$	12.07

In 2021, the Compensation Committee and Board of Directors approved a Long-Term Incentive Plan with respect to the grant of stock pursuant to the 2016 Equity Incentive Plan. The final equity amount earned is based on continued service through the three-year performance period ending on December 31, 2023, Board discretion, and performance results. The actual number of performance-based shares of common stock of the Company, if any, earned by the award recipients is determined 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. As of the date of these financial statements, the final awarded amount has not been determined, however the stock compensation cost was recognized over the requisite performance/service period using the straight-line method and based on the probable number of shares to be awarded

Awards are being amortized to expense ratably, based upon the vesting schedule. Stock compensation expense (in thousands) for the years ended December 31, 2023 and 2022 was approximately $375 and $505, respectively, based upon the value at the date of grant. The Company recognized tax benefits (in thousands) of $9 and $53 related to stock compensation expense for the years ended December 31, 2023 and 2022, respectively. The fair value of the shares vested (in thousands) for the years ended December 31, 2023 and 2022 was $221 and $570, respectively, based upon the value at the date of vesting. There was $34 thousand of unrecognized compensation cost related to the non-vested restricted stock as of December 31, 2023 and will be recognized ratably over a 21 month period. All non-vested restricted vests and is earned based on continued service of the award recipients.