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Note 4 - Stock-based Compensation

12 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

4.	STOCK-BASED COMPENSATION

Our Third Amended and Restated 2006 Omnibus Incentive Plan, as amended (the "Incentive Plan") governs the issuance of equity awards and other incentive compensation to management and members of the Board of Directors (the "Board"). On May 17, 2023, the stockholders, upon recommendation of the Board, approved the Third Amendment (the “Third Amendment”) to our Third Amended and Restated 2006 Omnibus Incentive Plan (the "Incentive Plan"). The Third Amendment (i) increased the number of shares of Class A common stock available for issuance under the Incentive Plan by an additional 575,000 shares, (ii) re-set the term of the plan to expire on May 1, 2033, and (iii) made other miscellaneous, administrative and conforming changes as necessary. The Incentive Plan includes (i) a fungible share reserve feature, under which shares subject to stock options and stock appreciation rights will be counted as one share for every share granted and shares subject to all other awards will be counted as 1.80 shares for every share granted, (ii) a double-trigger vesting requirement upon a change in control, and (iii) a maximum award granted or payable to any one participant under the Incentive Plan for a calendar year of 500,000 shares of Class A common stock or $4,000,000, in the event the award is paid in cash.

The Incentive Plan permits annual awards of shares of our Class A common stock to executives, other key employees, non-employee directors, and eligible participants under various types of options, restricted share awards, or other equity instruments. At December 31, 2023, 1,271,739 of the 4,775,000 shares noted above were available for award under the Incentive Plan. No awards may be made under the Incentive Plan after May 1, 2033. To the extent available, we have issued treasury stock to satisfy all share-based incentive plans.

Included in salaries, wages, and related expenses within the consolidated statements of operations is stock-based compensation expense of $6.5 million, $6.0 million, and $7.5 million in 2023, 2022, and 2021, respectively. Included in general supplies and expenses within the consolidated statements of operations is stock-based compensation expense for non-employee directors of $0.6 million, $0.6 million, and $0.4 million in 2023, 2022, and 2021, respectively. All the stock compensation expense recorded in 2023, 2022, and 2021 relates to restricted shares granted, other than $3.9 million, $2.2 million, and $2.4 million in 2023, 2022, and 2021, respectively, which relates to stock options. Associated with stock compensation expense was $2.2 million and $0.4 million, of income tax benefit in 2023, 2022, respectively, and $0.3 million of income tax expense in 2021, related to the exercise of restricted share vesting. We received $0.2 million, $0.4 million, and $0.0 million related to the exercise of stock options during 2023, 2022, and 2021. Associated with the exercise of stock options during 2023, 2022, and 2021 was $0.1 million, $0.1 million, and $0.0 million of income tax benefit, respectively. Forfeitures are recognized as they're incurred.

The Incentive Plan allows participants to pay the federal and state minimum statutory tax withholding requirements related to awards that vest or allows the participant to deliver to us shares of Class A common stock having a fair market value equal to the minimum amount of such required withholding taxes. To satisfy withholding requirements for shares that vested, certain participants elected to deliver to us $ 114,828, $ 55,306, and $ 60,752 Class A common stock shares, which were withheld at weighted average per share prices of $41.72, $29.03, and $21.87, respectively, based on the closing prices of our Class A common stock on the dates the shares vested in 2023, 2022, and 2021, respectively, in lieu of the federal and state minimum statutory tax withholding requirements. We remitted $4.8 million, $1.6 million, and $0.5 million in 2023, 2022, and 2021, respectively, to the proper taxing authorities in satisfaction of the employees' minimum statutory withholding requirements. The payment of minimum tax withholdings on stock compensation are reflected within the issuances of restricted shares from treasury stock in the accompanying consolidated statement of stockholders' equity.

The following table summarizes our restricted share award activity for the fiscal years ended December 31, 2023, 2022, and 2021:

		Number of stock awards (in thousands)				Weighted average grant date fair value

Unvested at December 31, 2020			645			$	16.25

Granted			252			$	21.34
Vested			(218	)		$	16.57
Forfeited			(117	)		$	15.31
Unvested at December 31, 2021			562			$	18.12

Granted			155			$	22.08
Vested			(223	)		$	18.79
Forfeited			(5	)		$	13.94
Unvested at December 31, 2022			489			$	19.12

Granted			98			$	38.71
Vested			(353	)		$	18.47
Forfeited			-			$	-
Unvested at December 31, 2023			234			$	29.20

The unvested shares at December 31, 2023 will vest based on when and if the related vesting criteria are met for each award. All awards require continued service to vest. Unrecognized compensation expense for outstanding shares was $4.7 million as of December 31, 2023, which is probable to be recognized over a weighted average period of approximately 2.1 years. The fair value of restricted share awards that vested in 2023, 2022, and 2021 was approximately $6.3 million, $3.4 million, and $4.9 million respectively.

The following table summarizes our stock option activity for the fiscal year ended December 31, 2023, 2022, and 2021:

		Number of options (in thousands)				Weighted average exercise price				Weighted average grant date fair value			Weighted average remaining contractual term		Aggregate intrinsic value (in thousands)

Outstanding at December 31, 2020			721			$	15.77			$	7.26		9.8 years		$	(692	)

Options granted			450			$	21.24			$	9.85
Options exercised			-			$	-			$	-
Options forfeited			(60	)		$	15.77			$	7.26
Outstanding at December 31, 2021			1,111			$	17.99			$	8.31		9.0 years		$	9,382

Options granted			-			$	-			$	-
Options exercised			(24	)		$	15.77			$	4.90
Options forfeited			-			$	-			$	-
Outstanding at December 31, 2022			1,087			$	18.04			$	8.39		8.0 years		$	17,968

Options granted			-			$	-			$	-
Options exercised			(15	)		$	15.77			$	4.90
Options forfeited			-			$	-			$	-
Outstanding at December 31, 2023			1,072			$	18.07			$	8.43		7.0 years		$	29,978

Exercisable at December 31, 2023			238			$	18.35			$	5.52		7.1 years		$	6,600

Unrecognized compensation cost for outstanding options was $0.6 million at December 31, 2023 which is probable to be recognized over a weighted average period of approximately 0.2 years.