Note 12 - Share-based Compensation

12 Months Ended

Dec. 31, 2014

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

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

NOTE 12 – Share-Based Compensation:

In 2003, the stockholders of the Company approved the 2003 Incentive Stock and Awards Plan (the “2003 Plan”), authorizing the granting of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, performance stock and other stock based compensation. This plan expired in May of 2013, at which time, the stockholders of the Company approved the 2013 Incentive Stock and Awards Plan (the “2013 Plan”), authorizing the granting of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, performance stock and other stock based compensation. A total of 5,000,000 shares of common stock (subject to adjustment for expirations and cancellations of options outstanding from the 2003 Plan subsequent to its termination) have been reserved for issuance under the 2013 Plan. All awards under both plans have been or will be granted at prices at least equal to the fair market value of the shares on the date of grant. Awards (all of which are exercisable at each respective year end) granted to date under both plans are exercisable in part or in full within five years of grant date with the exception of annual grants to outside directors which are exercisable in part or in full within ten years of grant date. Proceeds from the exercise of awards are credited to common stock to the extent of par value, and the balance is credited to additional paid-in capital. At December 31, 2014, the Company had 4,360,846 shares of common stock authorized for awards of share-based compensation under the 2013 Plan. A summary of option transactions during the two years ended December 31, 2014 follows:

	No. of			Weighted Average
	Shares			Exercise Price
Outstanding December 31, 2012		1,229,834		$	5.62
Granted		405,768			5.72
Exercised		(412,882	)		5.37
Lapsed		(62,300	)		5.34
Cancelled		(46,362	)		5.84
Outstanding December 31, 2013		1,114,058		$	5.76
Granted		397,218			8.30
Exercised		(360,318	)		5.70
Lapsed		(20,400	)		7.92
Cancelled		(12,500	)		6.43
Outstanding December 31, 2014		1,118,058		$	6.63

At December 31, 2014, options outstanding, all of which were fully vested and exercisable, had an intrinsic value of $9,007,000.

Options exercised during the years ended December 31, 2014 and 2013, had intrinsic values of $1,356,000 and $796,000, respectively.

The weighted average fair value of options granted for each of the years ended December 31, 2014 and 2013, was $2.26 and $1.51, respectively.

The following table summarizes information about stock options outstanding as of December 31, 2014:

Range of					Weighted Average Remaining		Weighted Average
Exercise Price			Shares		Contractual Life (Years)		Exercise Price
$3.82	-	$4.90		60,666		3.91	$	4.49
$5.55	-	$7.36		919,292		2.99	$	6.28
$7.96	-	$10.38		138,100		5.50	$	9.89
$3.82	-	$10.38		1,118,058		3.35	$	6.63

A summary of stock-settled stock appreciation rights ("SARS") transactions during the two years ended December 31, 2014 follows:

	No. of			Weighted Average
	Shares			Exercise Price
Outstanding December 31, 2012		352,952		$	5.80
Granted		119,432			5.65
Exercised		(19,572	)		5.87
Lapsed		-			-
Cancelled		-			-
Outstanding December 31, 2013		452,812		$	5.76
Granted		137,382			7.36
Exercised		(68,170	)		5.85
Lapsed		-			-
Cancelled		-			-
Outstanding December 31, 2014		522,024		$	6.17

At December 31, 2014, SARS outstanding, all of which were fully vested and exercisable, had an aggregate intrinsic value of $4,446,000.

SARS exercised during the year ended December 31, 2014 and 2013, respectively, had intrinsic values of $275,000 and $36,000.

The weighted average fair value of SARS granted for each of the years ended December 31, 2014 and 2013 was $2.02 and $1.49, respectively.

The following table summarizes information about SARS outstanding as of December 31, 2014:

Range of					Weighted Average Remaining		Weighted Average
Exercise Price			SARS		Contractual Life (Years)		Exercise Price
	$4.90			33,184		0.08	$	4.90
$5.62	-	$7.36		488,840		2.49	$	6.26
$4.90	-	$7.36		522,024		2.34	$	6.17

At December 31, shares available to issue as awards under the plan were 4,360,846 for 2014 and 4,968,562 for 2013. Options and SARS have never been repriced by the Company in any year.

The following table summarizes significant assumptions utilized to determine the fair value of share-based compensation awards:

	SARS			Options
Exercise price
2014	$	7.36			$7.36-$10.38
2013	$	5.65			$5.65-$5.88
Market price
2014	$	7.36			$7.36-$10.38
2013	$	5.65			$5.65-$5.88
Risk free interest rate (1)
2014		1.5	%		1.5%-2.6	%
2013		0.9	%		0.9%-1.7	%
Expected award life (2) (in years)		5			5-10
Expected volatility (3)
2014		42.5	%		37.3%-42.5	%
2013		46.0	%		36.7%-46.0	%
Expected dividend yield (4)
2014		3.7	%		2.9%-3.7	%
2013		4.8	%		4.6%-4.8	%

(1) The risk-free interest rate is based on the yield of a U.S. treasury bond with a similar maturity as the expected life of the awards.

(2) The expected life in years for awards granted was based on the historical exercise patterns experienced by the Company when the award is made.

(3) The determination of expected stock price volatility for awards granted in each of the two years ended December 31, was based on historical Superior common stock prices over a period commensurate with the expected life.

(4) The dividend yield assumption is based on the history and expectation of the Company’s dividend payouts.

For the years ended December 31, 2014 and 2013, the Company recognized $1,175,000 and $788,000, respectively, of pre-tax share-based compensation expense, related to options and SARs, recorded in selling and administrative expense in the consolidated statements of comprehensive income. These expenses were offset by $120,000 and $72,000, respectively, of deferred tax benefits for non-qualified share–based compensation.

On February 7, 2014, the Compensation Committee of the Board of Directors approved a restricted stock grant under the terms of the 2013 Stock and Awards Plan of the Company to four members of senior management for a total of 100,000 shares. The fair value of the stock on the date of grant was $7.36 per share for a total value of $736,000. These shares are unvested at the time of grant and will vest if the executives are still employed by the Company on February 7, 2017. The shares are subject to accelerated vesting under certain circumstances as outlined in the 2013 Stock and Awards Plan. On November 7, 2014, the Board of Directors approved a restricted stock grant under the terms of the 2013 Stock and Awards Plan to the four independent members of the Board of Directors for a total of 6,016 shares. The fair value of the stock on the date of grant was $11.96 per share for a total value of $72,000. These shares are unvested at the time of grant and will vest if the directors are still serving on the Company’s Board of Directors on November 7, 2017. The shares are subject to accelerated vesting under certain circumstances as outlined in the 2013 Stock and Awards Plan. Expense for each of these grants is being recognized over the service period. In 2014, the Company recognized approximately $229,000 in expense associated with the grants.

As of December 31, 2014, the Company had $579,000 of unrecognized compensation cost expected to be recognized in the future for prior share-based rewards.

During the years ended December 31, 2014 and 2013, the Company received $1,855,000 and $2,216,000, respectively, in cash from stock option exercises. Current tax benefits of $263,000 and $270,000, respectively, were recognized for these exercises. Additionally, during the year ended December 31, 2014, the Company received 20,560 shares of its common stock as payment for the issuance of 40,816 shares of its common stock related to the exercise of stock options.