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Note 12 - Stock-based Compensation Plan | 12 Months Ended
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Dec. 31, 2019
Notes to Financial Statements |
Share-based Payment Arrangement [Text Block] |
( 12 ) | STOCK-BASED COMPENSATION PLAN
As of December 31, 2019, 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 Second Amended and Restated 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 permitted 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. No further grants may be made under the 2007 Stock Plan. The 2014 Stock Plan was originally 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. On June 27, 2018, our stockholders approved the amendment and restatement of the 2014 Stock Plan to increase the number of shares of common stock that may be delivered pursuant to awards granted under the 2014 Stock Plan from 500,000 to 1,000,000 shares. On June 19, 2019, our stockholders approved the amendment and restatement of the 2014 Stock Plan to increase the number of shares of common stock that may be delivered pursuant to awards granted under the 2014 Stock Plan from 1,000,000 to 2,000,000 shares. As of December 31, 2019, there were 1,198,935 aggregate shares available to grant under the 2014 Plan. Our unvested restricted stock awards and stock options are accounted for based on their grant date fair value. As of December 31, 2019, total compensation expense to be recognized in future periods is $1,779. The weighted average period over which this expense is expected to be recognized is 2.7 years. The following table summarizes the compensation expense we recorded during 2019 and 2018, related to unvested shares of restricted stock and stock options.
|  | Years Ended December 31, |
|  | 2019 |  |  | 2018 |
Cost of revenues |  | $ | - |  |  | $ | - |
Selling expense |  |  | 8 |  |  |  | - |
Engineering and product development expense |  |  | 35 |  |  |  | 9 |
General and administrative expense |  |  | 841 |  |  |  | 645 |
|  | $ | 884 |  |  | $ | 654 |
There was no compensation expense capitalized in 2019 or 2018. Stock Options We record compensation expense for stock options based on the fair market value of the options as of the grant date. No 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. The fair value for stock options granted during 2019 and 2018 was estimated at the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions:
|  | 2019 |  |  | 2018 |
Risk-free interest rate |  |  | 2.35 | % |  |  | 2.75 | %
Dividend yield |  |  | 0.00 | % |  |  | 0.00 | %
Expected common stock market price volatility factor |  |  | .42 |  |  |  | .39 |
Weighted average expected life of stock options (years) |  |  | 6.25 |  |  |  | 6.25 |
The per share weighted average fair value of stock options issued during 2019 and 2018 was $2.75 and $3.50, respectively. The following table summarizes the activity related to stock options for the two years ended December 31, 2019:
|  | Number of Shares |  |  | Weighted Average Exercise Price |
Options outstanding, January 1, 2018 |  |  | 76,400 |  |  | $ | 5.98 |
Granted |  |  | 189,800 |  |  |  | 8.14 |
Exercised |  |  | - |  |  |  | - |
Canceled |  |  | (1,800 | ) |  |  | 4.37 |
Options outstanding, December 31, 2018 (21,800 exercisable) |  |  | 264,400 |  |  |  | 7.54 |
Granted |  |  | 249,460 |  |  |  | 6.25 |
Exercised |  |  | - |  |  |  | - |
Canceled |  |  | (7,050 | ) |  |  | 8.45 |
Options outstanding, December 31, 2019 (87,900 exercisable) |  |  | 506,810 |  |  |  | 6.89 |
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, except for restricted stock awards granted to our directors, which vest over one year. The following table summarizes the activity related to unvested shares for the two years ended December 31, 2019:
|  | Number of Shares |  |  | Weighted Average Grant Date Fair Value |
Unvested shares outstanding, January 1, 2018 |  |  | 75,225 |  |  | $ | 5.29 |
Granted |  |  | 95,600 |  |  |  | 8.24 |
Vested |  |  | (56,075 | ) |  |  | 7.18 |
Forfeited |  |  | - |  |  |  | - |
Unvested shares outstanding, December 31, 2018 |  |  | 114,750 |  |  |  | 6.92 |
Granted |  |  | 132,580 |  |  |  | 6.31 |
Vested |  |  | (69,974 | ) |  |  | 6.60 |
Forfeited |  |  | (12,325 | ) |  |  | 7.14 |
Unvested shares outstanding, December 31, 2019 |  |  | 165,031 |  |  |  | 6.55 |
The total fair value of the shares that vested during the years ended December 31, 2019 and 2018 was $426 and $423, respectively, as of the vesting dates of these shares.

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