Stockholders’ Equity

In addition to common stock, authorized capital includes

1,000,000

shares of “blank check” preferred stock.

None

was outstanding during the

two

years ended

December 31, 2017.

The Board of Directors (“Board”) is authorized to issue such stock in series and to fix the designation, powers, preferences, rights, limitations and restrictions with respect to any series of such shares. Such “blank check” preferred stock

may

rank prior to common stock as to dividend rights, liquidation preferences or both,

may

have full or limited voting rights and

may

be convertible into shares of common stock.

Basic and diluted earnings per share are calculated using the following share data (in thousands):

	201 7		2016
Weighted average shares outstanding for basic calculation		14,236		14,139
Dilutive effect of stock options		-		-
Weighted average shares outstanding for diluted calculation		14,236		14,139

2017

and

2016,

the dilutive effect of stock options and restricted shares was

not

recognized since we had a net loss.

We will repurchase common shares that are tendered by recipients of restricted stock awards to satisfy tax withholding obligations on vested restricted stock.

During

2017

and

2016,

we repurchased

163,214

shares for approximately

$135,000

and

6,862

shares for approximately

$15,000,

respectively.

July 2012,

the Board authorized the purchase of up to

$5.0

million of our common stock.

These repurchases

may

be made from time to time in the open market, in privately negotiated transactions, or otherwise, at prices the Company deems appropriate.

repurchases of our common stock were made in

2017.

During

2016,

we repurchased

400,000

shares of common stock for approximately

$1.0

million. As of

December 31, 2017,

we have approximately

$3.0

million remaining on this authorization to repurchase our common stock.

During

2016,

the Board declared

two

special dividends totaling

$1.50

per share.

The

first

special dividend of

$1.25

per share was distributed to shareholders on

August 19, 2016

and the

second

special dividend of

$.25

per share was distributed to shareholders on

November 18, 2016.

Approximately

$36,000

in dividends payable relate to unvested restricted shares as of

December 31, 2017.

In the

fourth

quarter of

2016,

the Board adopted a Rights Agreement designed to protect the

Company’s substantial net operating loss carryforwards.

Under the Rights Agreement, company stockholders of record as of

December 15, 2016

received

one

preferred share purchase right for each share of common stock they owned on such date. If a person or group acquires beneficial ownership of

4.9%

or more of the Company’s outstanding common stock (subject to certain specified exceptions), the rights will become exercisable. The rights will also become exercisable if a person or group that already owns

4.9%

or more of the Company’s outstanding common stock acquires an additional

or more of the Company’s outstanding common stock. The Company entered into Amendment

No.

dated

January

30,

2017,

to the Rights Agreement. This amendment amends the definition of Acquiring Person in the Rights Agreement to exclude any member of the Hale Group (Hale Partnership Fund, LP and certain affiliates that are parties to the agreement (Hale Agreement) dated

January

30,

2017

with the Company), provided that any purchases made by members of the Hale Group after

December

2016

are made in compliance with Section

(h) of the Hale Agreement.

If the rights become exercisable, all holders of rights, other than the person or group triggering the rights, will be entitled to purchase Company common stock at a

50%

discount. Rights held by the person or group triggering the rights will become void and will

not

be exercisable.

The rights have a de minimis fair value.

The rights trade with the Company

’s common stock. The Rights Agreement and the rights will expire on

December 5, 2019 (

unless the Company’s NOLs are utilized prior to that date). The Board

may

amend the Rights Agreement in any way or redeem the rights at any time unless and until the rights are triggered.

The Rights Agreement includes a procedure for the Board to consider requests to exempt a particular transaction from triggering the exercisability of the rights under the Rights Agreement if the transaction (i) does

not

(

) create a significant risk of the Company

’s NOLs being impaired or (y) constitute a default under the change-in-control covenant included in the Company’s credit facility or (ii) is otherwise in the best interests of the Company.