Stock-Based and Other Long-Term Incentive Compensation

6 Months Ended

Jun. 30, 2024

Share-Based Payment Arrangement [Abstract]

Stock-Based and Other Long-Term Incentive Compensation

Stock Options

A summary of all option activity as of December 31, 2023, and changes during the six months ended June 30, 2024 is presented below:


	Number of Shares Underlying Stock Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (years)	Aggregate Intrinsic Value (in thousands)
Outstanding, December 31, 2023	129,751	$	20.59	4.10	$	274
Granted	44,000	$	23.10	12.46	$	—

Cancelled / Forfeited	(667)	$	10.58	—	$	3
Expired	(29,667)	$	30.41	—	$	—
Outstanding, June 30, 2024	143,417	19.37		6.30	$	476
Exercisable, June 30, 2024	77,584	$	19.73	3.81	$	268

The following table summarizes information about our stock options outstanding at June 30, 2024:


Range of Exercise Prices	Options Outstanding				Options Exercisable
	Shares	Weighted Average Remaining Contractual Life (years)	Weighted Average Exercise Price		Shares	Weighted Average Exercise Price
$0.01-18.00	51,000	7.76	$	10.77	29,167	$	10.93

$18.01-26.00	72,667	6.27	$	23.02	28,667	$	22.90
$26.01-30.00	19,750	2.63	$	28.15	19,750	$	28.15

	143,417	6.30	$	19.37	77,584	$	19.73

The following table summarizes changes in our unvested stock options for the six months ended June 30, 2024:



Unvested Stock Options:	Shares	Weighted Average Grant Date Fair Value Per Share
Unvested at December 31, 2023	24,335	$	5.45
Granted	44,000	$	12.46
Vested, outstanding shares	(2,502)	$	6.57

Cancelled/Forfeited	—	$	—
Unvested at June 30, 2024	65,833	$	10.09

As of June 30, 2024, there was $0.4 million of unrecognized compensation cost related to unvested options. For the six months and three months ended June 30, 2024, there was less than $0.1 million of compensation expense for stock options, respectively. For the six months and three months ended June 30, 2023, there was less than $0.1 million of compensation expense for stock options.

Restricted Shares/Units and Performance Share Units

The following summarizes grants made of equity awards under our 2019 Equity Incentive Plan, as amended, on the dates indicated:

• On April 25, 2023, the Compensation Committee awarded 27,840 shares of restricted stock units to James R. Hazlett, our Chief Technical Officer, that vest ratably over three years, beginning on April 25, 2024.

• Pursuant to the Retirement Agreement dated May 17, 2022, between the Company and Stephen. Taylor, on April 25, 2023, the Compensation Committee awarded 58,790 fully vested shares of common stock to Mr. Taylor.

•On May 9, 2023, the Compensation Committee awarded each of our four independent Board members 9,470 restricted stock units ("RSU"). These RSUs vest one year from the date of grant. With respect to the 9,470 share RSU award received by Justin Jacobs, at the time of grant, he was an employee of Mill Road Capital Management, LLC (“Mill Road”), and was serving on our Board pursuant to a right of appointment held by Mill Road in connection with a Cooperation Agreement between Mill Road and us. Pursuant to a pre-existing contractual obligation, Mill Road has the right to receive the economic benefit of the shares upon vesting of this RSU. On January 29, 2024, Mr. Jacobs terminated his employment with Mill Road and on February 12, 2024, he began employment as our permanent Chief Executive Officer. As a result, since he no longer qualified as an independent member of our Board, Mr. Jacobs relinquished the vesting of 2,252 shares representing the pro-rata number of shares allocable under the award since the beginning his employment in February. Thus, these shares have not been issued and remain in our 2019 Plan for future award grants. In connection with the contractual obligation noted above, 6,856 of the vested shares are in the process of being transferred by Mr. Jacobs to Mill Road for no consideration, and Mr. Jacobs continues to own 362 of the vested shares relating the period between his termination of employment with Mill Road and employment as our CEO.

• On June 30, 2023, Mr. Taylor, in connection with his agreement to continue as our Interim Chief Executive Officer while we finalized our permanent CEO search, was granted RSUs for 10,101 shares of common stock that vested on June 30, 2024. In addition, Mr. Taylor was also issued 10,101 shares of common stock pursuant to his Retirement Agreement.

• On October 8, 2023, the Compensation Committee awarded 6,361 restricted stock units to Brian Tucker, our Chief Operating Officer. These units will vest ratably over three years beginning on October 9, 2024.

• On October 26, 2023, the compensation committee awarded 4,623 restricted stock units to Georganne Hodges upon her appointment as an independent director. These units vest one year from the date of the grant.

• On January 29, 2024, the compensation committee awarded Mr. Jacobs, our Chief Executive Officer, 31,382 restricted stock units and two performance share unit ("PSU") awards, one for 6,494 shares representing a signing bonus and another for 31,382 shares representing an award for 2024 (pro-rated). The restricted stock units vest over three years in equal tranches beginning on the one-year anniversary of the grant date.

•On March 4, 2024, the compensation committee awarded Mr. Tucker our Chief Operating Officer 11,293 restricted stock units and 11,293 performance share units. These restricted stock units vest over three years in equal tranches beginning on the one-year anniversary of the grant date.

•In addition on March 14, 2024, the compensation committee awarded Mr. Hazlett, our Chief Technical Officer, 21,984 restricted stock units. These restricted stock units vest over three years in equal tranches beginning on the one-year anniversary of the grant date. In connection with Mr. Hazlett's recent retirement on August 1, 2024, we adjusted the vesting terms of the RSUs to correspond with the term of his post-retirement consulting agreement.

•On June 13, 2024, the Compensation Committee awarded each of our four independent Board members 5,620 RSUs. These RSUs vest 1 year from the date of grant.

In connection with the performance share unit awards granted to Messrs. Jacobs and Tucker set forth above, potential payout for the PSU award is based upon performance for a three-year period ending December 31, 2026 measured against relative total shareholder return (“TSR”) compared to a peer group as established by the Compensation Committee. The PSU award payout ranges from zero (if the Company ranks below the 30th percentile) and up to 200% for Mr. Jacobs and Mr. Tucker, the CEO and the Chief Operating Officer, respectively, (if the Company ranks first) based upon the Company’s relative TSR performance ranking (subject to certain caps based on absolute TSR).

Total compensation expense related to these and previously granted restricted stock awards was $0.4 million and $1.6 million for the six months ended June 30, 2024, and 2023, respectively. Total compensation expense related to these and previously granted restricted stock awards was $0.2 million and $1.1 million for the three months ended June 30, 2024 and 2023, respectively.

A summary of all restricted stock/units outstanding as of December 31, 2023 and activity during the six months ended June 30, 2024 is presented below:


	Number of Shares	Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Life (years)	Aggregate Intrinsic Value (in thousands)
Outstanding, December 31, 2023	133,898	$	10.66	1.57	$	1,813
Granted	83,294	$	17.58		$	1,464
Vested	(52,505)	$	10.26		$	1,149
Canceled/Forfeited	(21,147)	$	11.12		$	235
Outstanding, June 30, 2024	143,540	$	14.82	5.13	$	2,888