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Note 12 - Share-based Compensation

12 Months Ended

Dec. 31, 2020

Share-based Payment Arrangement [Text Block]

On May 7, 2014, our shareholders approved the 2014 Omnibus Incentive Plan (the “2014 Plan”). The 2014 Plan includes 500,000 of our common shares that may be granted under various types of awards as described in the 2014 Plan. As of December 31, 2020, we were authorized to issue 94,560 shares under the 2014 Plan.

Stock options

The following table presents the weighted average assumptions used in the option-pricing model at the grant date for options granted during the years ended December 31:

	2020			2019
Assumptions:
Risk-free interest rate		1.61	%		2.84	%
Expected dividend yield		2.00	%		1.81	%
Expected volatility of Rocky's common stock		42.27	%		42.05	%
Expected option term (years)		6.3			6.3
Weighted-average grant date fair value per share	$	9.36		$	8.77

For the years ended December 31, 2020 and 2019, we recognized share-based compensation expense and the corresponding tax benefit as follows:

($ in thousands)	2020		2019
Share-based compensation expense	$	780	$	662
Tax benefit		58		109

The following summarizes stock option activity for the year ended December 31, 2020:

						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
($ amounts are per share)	Shares			Exercise Price		Actual Term		Intrinsic Value
Options outstanding at January 1, 2020		192,000		$	19.46
Issued		78,000			29.43
Exercised		(8,800	)		15.39
Forfeited or expired		(3,800	)		19.96
Options outstanding at December 31, 2020		257,400		$	22.61		5.6	$	1,510,216
Expected to vest		150,500		$	24.91		6.9	$	580,937
Exercisable at December 31, 2020		106,900		$	19.38		3.8	$	929,279

In the first quarter of 2020, our officers and certain employees were granted 42,000 options. The plans generally provided for grants with the exercise price equal to fair value on the date of grant, graduated vesting periods of up to 5 years, and lives not exceeding 10 years. For the years ended 2020 and 2019, cash received for the exercise of stock options was approximately $136,000 and $444,000, respectively.

In the first quarter of 2020, Board of Director members were granted 36,000 stock options that vest over a year and will expire in 5 years.

Restricted stock units

The following table summarizes the status of the Company’s restricted stock units and activity as of December 31, 2020:

	Restricted Stock Units
				Weighted-Average Grant Date
($ amounts are per share)	Quantity			Fair Value Per Share
Nonvested at January 1, 2020		2,500		$	11.35
Granted		-			-
Vested		(2,500	)		11.35
Forfeited		-			-
Nonvested at December 31, 2020		-		$	-

As of December 31, 2020, the total unrecognized compensation cost related to non-vested stock options and restricted stock units was $190,939 with a weighted-average expense recognition period of 3.7 years.

During the years ended December 31, 2020 and 2019, we issued 10,456 and 7,925 shares of common stock to members of our Board of Directors, respectively.