Stock-Based Compensation

12 Months Ended

Dec. 31, 2022

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

15.Stock-Based Compensation

The Compensation Committee of the Company’s Board of Directors is responsible for the administration of the Company’s stock incentive plans, which include the balance of shares remaining under the 2022 Long Term Incentive Plan (the “2022 LTIP”), which was approved by shareholders in May of 2022 and authorized 2,175,000 shares, the maximum aggregate number to be issued, plus any shares available for grant under prior long term incentive plans as of the date the 2022 LTIP was approved, and any shares subject to awards granted under the prior plans that expire or are cancelled, forfeited, exchanged, settled in cash or otherwise terminated. In general, the Company’s 2022 LTIP provides for grants of restricted stock, performance based awards and stock options to be issued with a per-share price not less than the fair market value of a share of common stock on the date of grant. Option terms are specified at each grant date but generally are 10 years from the date of issuance. Options generally vest over a three to five-year period.

Restricted Stock

The following table summarizes the restricted stock activity under the Company’s equity incentive plans:

		Weighted
	Number	Average
	of	Fair Value
	Shares	Per Share
Nonvested at January 1, 2020	516,572	$	4.29
Granted	1,038,044	$	2.76
Vested	(496,797)	$	2.87
Forfeited shares	(107,383)	$	7.13
Nonvested at December 31, 2020	950,436	$	3.04
Granted	916,531	$	4.58
Vested	(690,676)	$	3.43
Forfeited shares	(234,232)	$	4.22
Nonvested at December 31, 2021	942,059	$	3.97
Granted	1,603,434	$	2.73
Vested	(806,241)	$	2.90
Forfeited shares	(382,480)	$	4.60
Nonvested at December 31, 2022	1,356,772	$	2.96

In January 2022, the Company granted an independent director 8,929 shares of restricted common stock, which vested immediately on the date of grant and had a fair value on the date of grant of $3.36 per share.

In May 2022, independent directors as well as Mr. Austin J. Shanfelter, the Company’s Executive Chairman, Interim Chief Executive Officer and Interim Chief Financial Officer, were awarded an aggregate of 623,655 shares of restricted common stock. The total number included 193,548 shares, which were awarded to the six independent directors and vested immediately on the date of the grant, as well as 430,107 shares of time-vested restricted stock units awarded to Mr. Shanfelter. In September 2022, 179,211 of the time-vested restricted stock units cliff vested and were settled in stock as a result of Mr. Shanfelter fulfilling his term as Interim Chief Executive Officer. In March 2023, the remaining 250,896 time-vested restricted stock units cliff vested and were settled in stock as a result of Mr. Shanfelter fulfilling his term as Executive Chairman. The fair value on the date of the grant of all shares awarded in May 2022 was $2.79 per share.

In August 2022, the Company granted an executive 446,097 shares of restricted common stock with a vesting period of three years. In addition, the Company granted the executive 241,636 performance-based units. The performance-based units will potentially vest 100% if the target is met, with 100% of the units to be earned based on the achievement of an objective, tiered return on invested capital, measured over a three-year performance period. The Company evaluates the probability of achieving this each reporting period. The fair value of all grants awarded in August 2022 was $2.69 per unit.

In September 2022, the Company granted an executive 130,909 shares of restricted common stock with a vesting period of three years. In addition, the Company granted the executive 87,273 performance-based units. The performance-based units will potentially vest 100% if the target is met, with 100% of the units to be earned based on the achievement of an objective, tiered return on invested capital, measured over a three-year performance period. The Company evaluates the probability of achieving this each reporting period. The fair value of all grants awarded in September 2022 was $2.75 per unit.

In November 2022, the Company granted an executive of the Company 64,935 shares of restricted common stock, which vested immediately on the date of grant. The fair value of all shares awarded on the date of grant was $2.31 per share.

In May 2021, the Company’s six independent directors each received equity compensation grants of 14,975 shares, with a fair value of $6.01 per share. In September 2021, the Company granted an independent director 18,215 shares of restricted common stock, which vested immediately on the date of grant. The fair value of all shares awarded on the date of grant was $5.49.

In May 2021, certain officers and executives of the Company were awarded 160,000 shares of restricted common stock with a vesting period of three years and a fair value of $6.01 per share. In September 2021, the Company granted an executive of the Company 9,901 shares of restricted common stock with a vesting period of three years and a fair value of $5.05 per share.

In May 2021, the Company awarded certain executives 240,000 performance-based units. The performance-based units will potentially vest 100% if the target is met, with 100% of the units to be earned based on the achievement of an objective, tiered return on invested capital, measured over a three-year performance period. The Company evaluates the probability of achieving this each reporting period. The fair value of all units awarded on the date of the grant was $6.01 per unit.

In December 2021, certain officers and executives of the Company were awarded 139,000 shares of restricted common stock with a vesting period of three years and a fair value of $3.75 per share.

In February 2020, the Company granted an executive of the Company 15,121 shares of restricted common stock, which vested immediately on the date of grant. The fair value of all shares awarded on the date of grant was $4.96 per share.

In March 2020, certain officers and executives of the Company were awarded 170,235 shares of restricted common stock with a vesting period of three years and a fair value of $3.73 per share.

In May 2020, the Company’s six independent directors each received equity compensation grants of 39,823 shares, with a fair value of $2.26 per share.

In May 2020, certain officers and executives of the Company were awarded 100,000 shares of restricted common stock with a vesting period of three years and a fair value of $2.26 per share. In September 2020, the Company granted an executive of the Company 25,000 shares of restricted common stock with a vesting period of three years and a fair value of $2.58 per share.

In May 2020, the Company awarded certain executives 300,000 performance-based units. The performance-based units will potentially vest 50% if the target is met, with 25% each vesting on the second and third anniversary of the determination that the target was met, with 100% of the units to be earned based on the achievement of an objective, tiered return on invested capital, measured over a one-year performance period ending June 30,2021. The Company evaluates the probability of achieving this each reporting period. The fair value of all units awarded on the date of the grant was $2.26 per unit.

In August 2021, the Company determined the performance-based units awarded in May 2020 vested near the outperformance level established above the target set based on the achievement of an objective, tiered return on invested capital, measured over a one-year performance period ending June 30, 2021. As a result, the executives earned an additional 259,565 performance-based units with a fair value of $2.26, of which 50% vested immediately on the date of determination and 25% each will vest on the first and second anniversary of the date of determination.

In August 2020, the Company determined the performance-based units awarded in May 2019 vested at the outperformance level established above the target set based on the achievement of an objective, tiered return on invested capital, measured over a one-year performance period ending June 30, 2020. As a result, the executives earned an additional 93,750 performance-based units with a fair value of $1.96, of which 50% vested immediately on the date of determination and 25% each will vest on the first and second anniversary of the date of determination.

In December 2020, certain officers and executives of the Company were awarded 95,000 shares with a vesting period of three years and a fair value of $4.92 per share.

Stock Options

The following table summarizes the stock option activity under the Company’s equity incentive plans:

		Weighted		Weighted
		Average		Average
	Number	Exercise		Contractual	Aggregate
	of	Price		Life	Intrinsic
	Shares	Per Share		(Years)	Value
Outstanding at January 1, 2020	1,464,766	$	7.41
Forfeited	(542,151)	$	7.94
Outstanding at December 31, 2020	922,615	$	7.10
Exercised	(28,546)		3.86
Forfeited	(169,365)	$	6.32
Outstanding at December 31, 2021	724,704	$	7.41
Forfeited	(421,375)	$	7.49
Outstanding at December 31, 2022	303,329	$	7.29
Vested and expected to vest at December 31, 2022	303,329	$	7.29	3.18	$	—
Exercisable at December 31, 2022	303,329	$	7.29	3.18	$	—

For years ended December 31, 2022, 2021 and 2020, compensation expense related to stock based awards outstanding for the periods was $2.8 million, $2.4 million and $2.0 million, respectively. The Company applies a 3.2% and 5.5% forfeiture rate, which gets compounded over the vesting terms of the individual award, to its restricted stock and option grants, respectively, based on historical analysis. For the years ended December 31, 2022, 2021 and 2020, payments related to tax withholding for share-based compensation for certain officers of the Company were approximately $0.4 million, $0.9 million and $0.2 million, respectively.

In the year ended December 31, 2021, the Company received proceeds of approximately $0.1 million upon the exercise of 28,546 options. In the years ended December 31, 2022 and December 31, 2020, no stock options were exercised.

As of December 31, 2022, total unrecognized compensation expense related to unvested stock was approximately $3.1 million, which is expected to be recognized over a period of approximately 2.3 years.

	2022		2021		2020
Total intrinsic value of options exercised	$	—	$	50	$	—
Total fair value of shares vested	$	—	$	93	$	329