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Note 7 - Share-based Compensation

9 Months Ended

Sep. 30, 2020

Share-based Payment Arrangement [Text Block]

NOTE 7 – Share-Based Compensation:

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,
	2020		2019			2020		2019
Stock options and SARs	$	412	$	108		$	921	$	286
Restricted stock		203		215			566		612
Performance shares(1)		114		(358	)		303		99
Total share-based compensation expense	$	729	$	(35	)	$	1,790	$	997

Related income tax benefit	$	78	$	67		$	207	$	192

(1)	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 Stock Appreciation Rights (“SARs”)

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 either one or 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, 2020 follows:

						Weighted Average		Aggregate
	No. of			Weighted Average		Remaining Life		Intrinsic Value
	Shares			Exercise Price		(in years)		(in thousands)
Outstanding, January 1, 2020		701,131		$	16.82		2.95	$	714
Granted⁽¹⁾		560,125			9.41
Exercised		(124,722	)		13.13
Lapsed or cancelled		(128,549	)		17.64
Outstanding, September 30, 2020		1,007,985			13.05		3.91		11,382
Exercisable, September 30, 2020		310,281			17.48		2.52		1,821

(1)	The weighted average grant date fair value of stock options granted was $2.36 per share.

As of September 30, 2020, the Company had $1.0 million in unrecognized compensation related to nonvested stock options to be recognized over the remaining weighted average vesting period of 1.1 years.

A summary of stock-settled SARs transactions during the nine months ended September 30, 2020 follows:

						Weighted Average		Aggregate
	No. of			Weighted Average		Remaining Life		Intrinsic Value
	Shares			Exercise Price		(in years)		(in thousands)
Outstanding, January 1, 2020		206,700		$	18.67		2.04	$	-
Granted⁽¹⁾		225,625			10.08
Exercised		(31,828	)		16.39
Lapsed or cancelled		(68,501	)		15.97
Outstanding, September 30, 2020		331,996			13.61		3.91		2,128
Exercisable, September 30, 2020		94,240			19.82		1.64		337

(1)	The weighted average grant date fair value of SARs granted was $2.18 per share.

As of September 30, 2020, the Company had $0.3 million in unrecognized compensation related to nonvested SARs to be recognized over the remaining weighted average vesting period of 1.0 years.

Restricted Stock

The Company has granted restricted stock to directors and certain employees 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 Incentive Stock and Awards Plan (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, 2020 follows:

				Weighted Average
	No. of			Grant Date
	Shares			Fair Value
Outstanding, January 1, 2020		151,166		$	18.44
Granted		49,543			10.97
Vested		(34,619	)		16.97
Forfeited		(17,420	)		14.24
Outstanding, September 30, 2020		148,670			16.79

As of September 30, 2020, the Company had $1.1 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

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 to 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. 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, 2020 follows:

				Weighted Average
	No. of			Grant Date
	Shares			Fair Value
Outstanding, January 1, 2020		194,012		$	19.77
Granted		15,000			10.97
Vested		(5,892	)		16.97
Forfeited		(17,904	)		22.70
Outstanding, September 30, 2020		185,216			18.86

As of September 30, 2020, the Company had $1.1 million of unrecognized compensation cost related to nonvested performance share grants expected to be recognized over the remaining weighted average service period of 1.3 years.