NOTE

– Share-Based Compensation:

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 (“SARS”), restricted stock, performance stock and other stock based compensation. This plan expired in

May

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, SARS, restricted stock, performance shares 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 options and SARS under both plans have been or will be granted with exercise prices at least equal to the fair market value of the shares on the date of grant. At

December 31, 2017,

the Company had

3,667,577

shares of common stock available for grant of share-based compensation under the

2013

Plan.

Share-based compensation is recorded in selling and administrative expense in the

consolidated statements of comprehensive income. The following table details the share-based compensation expense by plan and the total related tax benefit for the periods presented:

	Year Ended December 31 ,
	(In thousands )
	201 7		201 6		201 5
Stock options and SAR S	$	1,093	$	1,071	$	1,079
Restricted stoc k		331		317		282
Performance share s		240		250		-
Total share-based compensation expens e	$	1,664	$	1,638	$	1,361

Related income tax benefi t	$	229	$	325	$	203

Stock options and SARS

The Company grants stock options and stock settled

SARS to employees that allow them to purchase shares of the Company’s common stock. Options are also granted to outside members of the Board of Directors of the Company. The Company determines the fair value of stock options and SARS at the date of grant using the Black-Scholes valuation model.

All options and SARS vest immediately at the date of grant. Awards generally expire

five

years after the date of grant with the exception of options granted to outside directors, which expire

ten

years after the date of grant. The Company issues new shares upon the exercise of stock options and SARS.

A summary of stock option transactions during the

two

years ended

December 31, 2017

follows:

	No. o f			Weighted Averag e
	Share s			Exercise Pric e
Outstanding December 31, 201 5		946,546		$	8.39
Grante d		172,862			16.53
Exercise d		(279,766	)		7.31
Lapse d		(11,131	)		5.92
Cancelle d		(3,260	)		17.53
Outstanding December 31, 201 6		825,251		$	10.46
Grante d		155,142		$	18.67
Exercise d		(336,726	)		8.71
Lapse d		(1,100	)		5.86
Cancelle d		(8,690	)		15.82
Outstanding December 31, 201 7		633,877		$	13.33

December 31,

201

options outstanding, all of which were fully vested and exercisable, had an intrinsic value of

$8.5

million. The weighted-average remaining contractual term was

months.

Options exercised during

the years ended

December 31, 2017,

2016

and

2015,

had intrinsic values of

$4.2

million,

$3.1

million and

$3.5

million respectively.

The weighted average fair value

s of the Company’s

155,142,

172,862

and

153,618

options granted during the years ended

December 31, 2017,

2016

and

2015

were

$5.56

and

$4.69

and

$5.22,

respectively.

During the ye

ars ended

December 31, 2017,

2016

and

2015,

respectively, the Company received

$1.9

million,

$1.5

million and

$1.8

million in cash from stock option exercises. Current tax benefits of

$0.8

million,

$0.4

million and

$0.6

million, respectively, were recognized for these exercises. Additionally, during the years ended

December 31, 2017,

2016

and

2015,

respectively, the Company received

50,981,

27,770

and

14,571

shares of its common stock as payment of the exercise price in the exercise of stock options for

144,443,

81,608

and

50,224

shares of its common stock related to the exercise of stock options.

The following table summarizes information about stock options out

standing as of

December 31, 2017:

Range o f					Weighted Average Remainin g		Weighted Averag e
Exercise Pric e			Share s		Contractual Life (Years )		Exercise Pric e
$3.82	-	$5.5 5		59,000		2.08	$	4.81
$5.65	-	$7.3 6		151,995		1.96	$	6.65
$7.96	-	$10.3 8		45,100		4.53	$	8.87
$16.35	-	$21.6 3		377,782		4.79	$	17.88
$3.82	-	$21.6 3		633,877		3.84	$	13.33

A summary of stock-settled SARS transactions during the

two

years ended

December 31, 2017

follows

	No. o f			Weighted Averag e
	Share s			Exercise Pric e
Outstanding December 31, 201 5		381,566		$	8.14
Grante d		58,108			16.35
Exercise d		(114,168	)		6.27
Lapse d		-			-
Cancelle d		-			-
Outstanding December 31, 201 6		325,506		$	10.26
Grante d		43,988			16.97
Exercise d		(222,990	)		6.90
Lapse d		-
Cancelle d		-
Outstanding December 31, 201 7		146,504		$	17.38

December 31, 2017,

SARS outstanding, all of which were fully vested and exercisable, had an aggregate intrinsic value of

$1.4

million. The weighted-average remaining contractual term was

months.

SARS exer

cised during the years ended

December 31, 2017,

2016

and

2015,

respectively, had intrinsic values of

$3.5

million,

$1.5

million and

$2.6

million respectively. Current tax benefits of

$1.3

million,

$0.5

million and

$1.0

million respectively, were recognized for these exercises. The weighted average grant date fair values of the Company’s SARS granted during the years ended

December 31, 2017,

2016

and

2015

was

$4.83,

$4.49

and

$5.20,

respectively.

The following table summarizes information about

SARS outstanding as of

December 31, 2017:

Range o f					Weighted Average Remainin g		Weighted Averag e
Exercise Pric e			SAR S		Contractual Life (Years )		Exercise Pric e

$16.35	-	$18.66		146,504		2.92	$	17.38

December 31,

2017

shares available for grant as awards under the plan were

3,667,577.

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

options and SARS:

Years ende d
December 31 ,	SAR S	Option s
Exercise pric e
201 7	$16.97	$16.97	-	$21.6 3
201 6	$16.35	$16.35	-	$18.5 5
201 5	$18.66	$16.78	-	$18.6 6

Market pric e
201 7	$16.97	$16.97	-	$21.6 3
201 6	$16.35	$16.35	-	$18.5 5
201 5	$18.66	$16.78	-	$18.6 6
Risk free interest rate 1
201 7	1.9%	1.8%	-	2.4%
201 6	1.3%	1.1%	-	1.8%
201 5	1.5%	1.5%	-	2.1%
Expected award life (years) 2	5	5	-	10

Expected volatility 3
201 7	36.6%	36.6%	-	41.4%
201 6	36.5%	36.5%	-	40.3%
201 5	34.9%	34.9%	-	39.0%
Expected dividend yield 4
201 7	2.1%	1.8%	-	2.1%
201 6	2.0%	1.8%	-	2.1%
201 5	1.6%	1.6%	-	1.9%

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.

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

The determination of expected stock price volatility for awards granted in each of the

three

years ended

December 31, 2017,

2016

and

2015

was based on historical Superior common stock prices over a period commensurate with the expected life.

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

Restricted Stock

The Company has

granted restricted stock to directors and certain employees under the terms of the

2013

Plan which vest at a specified future date, generally after

three

years, or when certain conditions are met. The shares are subject to accelerated vesting under certain circumstances pursuant to the

2013

Plan. Expense for each of these grants is based on the fair value at the date of the grant and is being recognized on a straight-line basis over the respective service period. As of

December 31, 2017,

the Company had

$0.7

million of unrecognized compensation cost related to nonvested grants expected to be recognized over the weighted average service period of

2.01

years.

A summary of restricted stock transactions during the years ended

December 31, 2017

follows

	No. o f			Weighted Averag e
	Share s			Grant Date Fair Valu e
Outstanding December 31, 201 5		114,342		$	8.39
Grante d		10,396			16.35
Veste d		-			-
Forfeite d		(1,050	)		21.92
Outstanding December 31, 201 6		123,688		$	8.94
Grante d		43,706			18.30
Veste d		(106,016	)		7.62
Forfeite d		-			-
Outstanding December 31, 201 7		61,378		$	17.89

Performance Shares

2016,

the Compensation Committee of the Board of Directors approved grants of performance shares under the terms of the

2013

Plan. Under the terms of the

grants, certain employees received service-based or service-based and performance-based shares. The service-based awards vest after the service period is met, which is generally

three

five

years. Expense for these grants is based on the fair value on the date of the grant and is being recognized on a straight-line basis over the respective service period. The performance-based shares generally vest after

five

years if the performance and service targets are met. The Company evaluates the performance conditions associated with these grants each reporting period to determine the expected number of shares to be issued. Based upon this evaluation, expected expenses for these grants are being recognized based on the fair value on the date of the grant on a straight-line basis over the respective service period. The shares are subject to accelerated vesting under certain circumstances as outlined in the

2013

Plan. As of

December 31, 2017,

the Company had

$1.6

million of unrecognized compensation cost related to nonvested grants expected to be recognized over the weighted average service period of

3.25

years.

A summary of performance share transactions during the year ended

December 31, 2017

follows

	No. o f			Weighted Averag e
	Share s			Grant Date Fair Valu e
Outstanding December 31, 201 6		101,000		$	16.36
Grante d		50,826			18.39
Veste d		-			-
Forfeite d		(33,334	)		16.35
Outstanding December 31, 201 7		118,492		$	17.24