NOTE

– Share-Based Compensation

May 2013,

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 (“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 previous plan) have been reserved for issuance under the

2013

Plan. All options and SARs 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

June 30, 2019,

the Company had

3,307,485

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 statements of comprehensive income. The following table details the share-based compensation expense by type of award and the total related tax benefit for the periods presented (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Stock options and SARs	$	105	$	121	$	178	$	944
Restricted stock		209		140		397		264
Performance shares		237		177		457		282
Total share-based compensation expense	$	551	$	438	$	1,032	$	1,490

Related income tax benefit	$	67	$	74	$	125	$	185

Stock options and SAR

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 or after a

two

-year period. 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

six

months ended

June 30, 2019

follows:

						Weighted Average
	No. of			Weighted Average		Remaining Life		Aggregate
	Shares			Exercise Price		(in years)		Intrinsic Value
Outstanding, January 1, 2019		676,846		$	15.70		2.99	$	2,230
Granted(1)		142,009			17.68
Exercised		(75,144	)		6.70
Cancelled		(54,148	)		19.36
Outstanding, June 30, 2019		689,563		$	16.80		3.28	$	1,243
Options exercisable, June 30, 2019		517,593		$	16.42		2.75	$	1,239

(

)

The weighted average grant date fair value of stock options granted was

$3.97

per share.

As of

June 30, 2019,

the Company had

$0.6

million in unrecognized compensation related to nonvested stock options to be recognized over the remaining weighted average vesting period of

1.5

years.

A summary of stock-settled SARs transactions during the

six

months ended

June 30, 2019

follows:

						Weighted Average
	No. of			Weighted Average		Remaining Life		Aggregate
	Shares			Exercise Price		(in years)		Intrinsic Value
Outstanding, January 1, 2019		182,894		$	18.99		2.61	$	89
Granted(1)		42,841			17.77
Exercised		-			-
Cancelled		(16,162	)		20.01
Outstanding, June 30, 2019		209,573		$	18.66		2.57	$	40
Options exercisable, June 30, 2019		168,478		$	18.88		2.07	$	40

(

)

The weighted average grant date fair value of SARs granted was

$3.97

per share.

As of

June 30, 2019,

the Company had

$0.1

million in unrecognized compensation related to nonvested SARs to be recognized over the remaining weighted average vesting period of

1.6

years.

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 as outlined in 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.

A summary of restricted stock transactions during the

six

months ended

June 30, 2019

follows:

			Weighted Average
	No. of		Grant Date
	Shares		Fair Value
Outstanding, January 1, 2019		92,032	$	19.46
Granted		48,829		17.41
Vested		-		-
Cancelled		-		-
Outstanding, June 30, 2019		140,861	$	18.75

As of

June 30, 2019,

the Company had

$1.5

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

1.8

years.

Performance Shares

Under the terms of the grants, certain employees received service-based or service-based and performance-based shares, to which we collectively refer to as performance 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 based on the fair value on the date of the grant and are being recognized on a straight-line basis over the respective service period. The awards are subject to accelerated vesting under certain circumstances as outlined in the

2013

Plan.

A summary of performance share transactions during the

six

months ended

June 30, 2019

follows:

				Weighted Average
	No. of			Grant Date
	Shares			Fair Value
Outstanding, January 1, 2019		194,378		$	20.08
Granted		14,068			17.77
Vested		-			-
Cancelled		(1,000	)		17.75
Outstanding, June 30, 2019		207,446		$	19.93

As of

June 30, 2019,

the Company had

$2.5

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

2.3

years.