Note 9. Stock-based Compensation 

The Company’s stockholders approved the 2017 Equity Compensation Plan (“the Plan”) on May 23, 2017. The Plan eliminates all remaining issuable shares under previous plans and is the only outstanding plan as of March 31, 2026. On May 30, 2023, the Company's stockholders approved an amendment to the Plan that increased the maximum number of shares issuable to 1,200,000. Grants under the Plan can be in the form of stock options (qualified or non-qualified), restricted shares, deferred stock units or performance units. Shares available for grant and issuance under the Plan as of March 31, 2026 were approximately 64,787. The Company intends to issue all shares under the Plan in the form of newly issued shares.

As of March 31, 2026 and December 31, 2025, the Company had no outstanding stock options. Restricted stock and deferred stock units generally vest over a three-year period, with one-third vesting annually beginning one year after the grant date. These awards also provide for accelerated vesting upon a change in control. Grants to new employees and board members may feature shorter vesting schedules. Performance units typically feature a three-year cliff vesting or accelerate upon a change of control. The Company accounts for forfeitures as they occur by reversing previously recognized compensation expense. Restricted stock grants carry the same dividend and voting rights as common stock, while options, performance units, and deferred stock units do not.

All awards are issued at the fair value of the underlying shares on the grant date. The Company expenses the cost of the awards, which is determined to be the fair market value of the awards at the date of grant, ratably, over the vesting or measurement period. Forfeiture rates are not estimated but are recorded as incurred. Stock-based compensation expense for the three months ended March 31, 2026 and March 31, 2025 was $1.4 million and $1.3 million, respectively. 

Activity in the Company’s restricted stock for the three months ended March 31, 2026 was as follows:

As of March 31, 2026, there was approximately $1.6 million of total unrecognized compensation cost related to nonvested restricted stock granted. The cost is expected to be recognized over a weighted average period of 1.8 years.

A summary of the status of unearned performance unit awards and the change during the period is presented in the table below:

As of March 31, 2026, the specific number of shares related to performance units that were expected to vest was 255,833, determined by actual performance in consideration of the established range of the performance targets, which is consistent with the level of expense currently being recognized over the vesting period. Should this expectation change, additional compensation expense could be recorded in future periods or previously recognized expense could be reversed. As of March 31, 2026, the maximum number of performance units that ultimately could vest if performance targets were exceeded is 382,501. During the three months ended March 31, 2026, 45,746 shares vested. A total of 24,582 shares were netted from the vested shares to satisfy employee tax obligations. The net shares issued from vesting of performance units during the three months ended March 31, 2026 were 21,164 shares. As of March 31, 2026, compensation cost of approximately $3.0 million related to non-vested performance units not yet recognized is expected to be recognized over a weighted average period of 2.1 years.

A summary of the status of unearned deferred stock units and the changes in deferred stock units during the period is presented in the table below:

Forfeitures are recognized as they occur as a reversal of previously recognized compensation expense. A portion of the shares that vest will be netted out to satisfy the tax obligations of the recipient. During the three months ended March 31, 2026, 92,170 shares vested. A total of 48,743 shares were netted from the vested shares to satisfy employee tax obligations. The net shares issued from vesting of deferred stock units during the three months ended March 31, 2026 were 42,849 shares. As of March 31, 2026, compensation cost of approximately $3.6 million related to non-vested deferred stock units, not yet recognized, is expected to be recognized over a weighted average period of 1.9 years.