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

September 30, 2019

, the Company had

3,320,743

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 September 30,					Nine Months Ended September 30,
	2019			2018		2019		2018
Stock options and SARs	$	108		$	16	$	286	$	960
Restricted stock		215			140		612		404
Performance shares(1)		(358	)		221		99		503
Total share-based compensation expense	$	(35	)	$	377	$	997	$	1,867

Related income tax benefit	$	67		$	44	$	192	$	229

(

)

During the

three

and

nine

months ended

September 30, 2019,

the Company reversed

$0.5

million of previously recognized expense for certain performance awards after determining that the performance conditions are

not

expected to be met.

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. 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 stock options and SARs granted prior to

August 3, 2018

vested immediately when granted. Awards issued thereafter vest

two

years after the grant date. Employee awards expire

five

years after the grant date, and those issued to directors expire

ten

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

A summary of stock option transactions during the

nine

months ended

September 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)		184,994			17.22
Exercised		(75,444	)		6.71
Cancelled		(80,005	)		17.71
Outstanding, September 30, 2019		706,391		$	16.83		3.20	$	984
Options exercisable, September 30, 2019		497,993		$	16.56		2.58	$	967

(

)

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

$3.96

per share.

As of

September 30, 2019

, the Company had

$0.4

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

1.3

years.

A summary of stock-settled SARs transactions during the

nine

months ended

September 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		(19,035	)		19.67
Outstanding, September 30, 2019		206,700		$	18.67		2.29	$	-
Options exercisable, September 30, 2019		168,478		$	18.88		1.82	$	-

(

)

The weighted average grant date fair value of SARs granted was

$3.97

per share.

As of

September 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

1.3

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

nine

months ended

September 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, September 30, 2019		140,861	$	18.75

As of

September 30, 2019

, the Company had

$1.3

million of unrecognized compensation cost related to nonvested restricted stock grants expected to be recognized over the remaining weighted average vesting period of

1.6

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. During the

three

and

nine

months ended

September 30, 2019,

the Company reversed

$0.5

million of previously recognized expense for certain awards after determining that the performance conditions are

not

expected to be met. Expenses for grants of performance shares are recognized on a straight-line basis over the respective service period based on the grant date fair value and expected number of shares to be issued. The awards are subject to accelerated vesting under certain circumstances as outlined in the

2013

Plan.

A summary of performance share transactions during the

nine

months ended

September 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		(14,434	)		22.03
Outstanding, September 30, 2019		194,012		$	19.77

As of

September 30, 2019

, the Company had

$1.5

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

2.1

years.