STOCK COMPENSATION EXPENSE

12 Months Ended

Dec. 31, 2020

STOCK COMPENSATION EXPENSE [Abstract]

NOTE 14 – STOCK COMPENSATION EXPENSE

From time to time the Company grants stock options to its employees. The Company estimates the fair value of the options at the time they are granted to employees and expenses that fair value over the vesting period of the option grant. In 2012, the Company registered 687,500 shares of its common stock to be reserved for stock-based incentive programs over the subsequent 10 years (“the 2012 Long-term Incentive Plan”).

On March 18, 2020, 74,025 incentive stock options were granted out of the 2012 Long Term Incentive Plan at an exercise price of $8.50, the closing market price of Premier’s common stock on the grant date. These options vest in three equal annual installments ending on March 18, 2023. On March 20, 2019, 72,075 incentive stock options were granted out of the 2012 Long Term Incentive Plan at an exercise price of $15.57, the closing market price of Premier’s common stock on the grant date. These options vest in three equal annual installments ending on March 20, 2022. On March 21, 2018, 67,875 incentive stock options were granted out of the 2012 Long Term Incentive Plan at an exercise price of $15.12, the closing market price of Premier’s common stock on the grant date. These options vest in three equal annual installments ending on March 21, 2021.

The fair value of the Company’s employee stock options granted is estimated at the date of grant using the Black-Scholes option-pricing model. This model requires the input of highly subjective assumptions, changes to which can materially affect the fair value estimate. Additionally, there may be other factors that would otherwise have a significant effect on the value of employee stock options granted but are not considered by the model. The assumptions used in the Black-Scholes option-pricing model are as follows

	2020			2019			2018
Risk-free interest rate		0.79	%		2.34	%		2.69	%
Expected option life (yrs)		5.11			5.48			5.37
Expected stock price volatility		25.45	%		28.45	%		22.47	%
Dividend yield		7.06	%		3.85	%		3.17	%
Weighted average fair value of options granted during the year	$	0.71		$	2.91		$	2.49

The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield in effect at the time of the grant. The expected option life for the 2020, 2019, and 2018 grants were estimated based upon the weighted-average life of options exercised since January 1, 2012. The expected stock price volatility is based on historical volatilities of the Company’s common stock during the three-year period prior to the grant date. The dividend yield was estimated by annualizing the current quarterly dividend on the Company’s common stock at the time of the option grant.

On June 9, 2020, 11,000 shares of Premier’s common stock were granted to President and CEO, Robert W. Walker as stock-based bonus compensation under the 2012 Long-term Incentive Plan. The fair value of the stock at the time of the grant was $14.54 per share based upon the closing price of Premier’s stock on the date of grant and $160 of stock-based compensation was recorded as a result.

On April 17, 2019, 7,500 shares of Premier’s common stock were granted to President and CEO, Robert W. Walker as stock-based bonus compensation under the 2012 Long-term Incentive Plan. The fair value of the stock at the time of the grant was $16.78 per share based upon the closing price of Premier’s stock on the date of grant and $126 of stock-based compensation was recorded as a result.

On April 25, 2018, 7,500 shares of Premier’s common stock were granted to President and CEO, Robert W. Walker as stock-based bonus compensation under the 2012 Long-term Incentive Plan. The fair value of the stock at the time of the grant was $15.82 per share based upon the closing price of Premier’s stock on the date of grant and $119 of stock-based compensation was recorded as a result.

Compensation expense of $280, $301, and $252 was recorded for the years ended December 31, 2020, 2019, and 2018, respectively. Stock-based compensation expense is recognized ratably over the requisite service period for all awards. Unrecognized stock-based compensation expense related to stock options totaled $62 at December 31, 2020. This unrecognized expense is expected to be recognized over the next 26 months based on the vesting periods of the options.

During the year ending December 31, 2020, 6,187 options were exercised while 26,979 options were exercised during the year ending December 31, 2019 and 28,151 options were exercised during the year ending December 31, 2018.

A summary of the Company’s stock option activity is as follows:

	2020					2019					2018
	Options			Weighted Average Exercise Price		Options			Weighted Average Exercise Price		Options			Weighted Average Exercise Price
Outstanding at beginning of year		332,641		$	12.54		298,383		$	11.66		262,811		$	10.63
Grants		74,025			8.50		72,075			15.57		67,875			15.12
Exercises		(6,187	)		6.16		(26,979	)		10.13		(28,151	)		10.12
Forfeitures or expired		(1	)		6.47		(10,838	)		14.21		(4,152	)		13.91
Outstanding at year-end		400,478		$	11.90		332,641		$	12.54		298,383		$	11.66

Exercisable at year-end		257,535		$	11.92		200,123		$	10.67		172,577		$	9.55
Weighted average remaining life		5.0					5.0					5.2

Options outstanding at year-end are expected to fully vest.

Additional information regarding stock options outstanding and exercisable at December 31, 2020 is provided in the following table:

		Outstanding						Currently Exercisable
Range of Exercise Prices		Number		Weighted Average Exercise Price		Aggregate Intrinsic Value		Number		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Aggregate Intrinsic Value

$	4.00 to $6.00		30,901	$	5.29	$	248		30,901		0.82	$	5.29	$	247
$	8.01 to $10.00		89,740		8.46		433		15,715		2.22		8.28		79
$	10.01 to $12.00		96,595		10.70		250		96,595		4.33		10.70		250
$	14.01 to $16.00		183,242		15.32		-		114,323		6.98		15.25		-
Outstanding at Dec 31, 2020			400,478		11.90	$	931		257,534		4.96		11.92	$	576